Who in their right mind would pay good money for stock in Uber or Lyft?
I was away much of March despite the broken ankle I’ve been dealing with. And BTW, thanks to those who expressed good wishes over the past month. It is appreciated.
So while I was away I missed every one of the new round of taxi industry consultations. I likely was not going to be able to attend any anyway as I have a tough time getting around. To give you an idea, while I was away I used crutches, a walker and a wheelchair at various times to do various things. Even taking a shower is a problem, particularly as I don’t want to slip in the bathtub and do myself further injury. Early in April the doctor will look at me and we’ll decide what to do. The big question is will he leave the plate and screws in or take them out. Another surgery will lead to a longer healing time.
This said, I am going to have to rely on the comments and opinions of others about the value of this latest round of taxi consultations.
On another matter, have you seen the news stories about the upcoming IPO’s (Initial Public Offerings) from both Lyft and Uber? I find them utterly fascinating.
In their bitter competition for market share, both companies are heavily subsidizing every single ride cars using their systems provide. I’ve seen estimates of subsidies of up to $2 per ride. As a result, neither company is making a dime. The latest I’ve seen is that Lyft is losing about $800 million a quarter! That translates into $3.2 billion a year!
Uber’s numbers could well be worse.
In fact, both companies are telling potential investors they may never make money.
So would someone please tell me why any rational human being would put their hard-earned money into the stocks of either company? Uber apparently plans to “reward” some of its drivers with stock issues. I could well be missing something here but my first thought is, “Gee, thanks for the wallpaper.”
Another quick thought arises. Isn’t there a name for the practice of entering a market, lowballing prices to drive out competition and then when you get a dominant position you raise prices through the roof? Isn’t that precisely what Uber and Lyft are doing? Is it legal? It may be, in that neither company has jacked up its prices. Yet. Will consumer advocates chime in on this now, soon or ever? How about governments? Who knows?
In some jurisdictions some of the better known tech giants (i.e. Google) are being looked at as being possible targets for anti-trust legislation or prosecution as some authorities consider them to be anti-competitive. I wonder if Uber, Lyft, etc might fit under the same umbrella?
Meanwhile I understand the consultants hired by the City to assist in the latest round of consultations, WSP Global Inc., has been ordered to pay a $4 million fine for bid-rigging on municipal infrastructure contracts in Quebec between 2002 and 2011. Shades of SNC-Lavalin, perhaps? I’m not saying these consultants are corrupt, but their parent company sure has been found guilty. I wonder how much due diligence the City did before hiring these folks. I’ve already heard cynical speculation they were hired because they’d recommend what the City told them to recommend, and to heck with fact and/or truth.
I do note in March City of Toronto inspectors ticketed taxicabs for not having snow tires on. I wonder, did a single Uber or Lyft or other app-based dispatch company’s cars get a single ticket? Of course not. The reason for snow tires on taxis is ostensibly for passenger safety. So I guess the City cares about the passenger safety of taxi customers but couldn’t give a hoot about the safety of app-based riders one iota.
I also wonder if inspectors are checking app dispatched cars for proper insurance coverage. I bet they aren’t.
Despite the clear intent of the provincial legislation covering service to the disabled, my understanding is app-based dispatchers are farming out accessible work to other companies and not doing it themselves. I wonder if this is problematic for the City or the province.
Driver safety and training for everyone is a huge issue that must be dealt with.
I submit the continuing abdication of its enforcement responsibilities towards app-based dispatchers is a huge stain on the reputation and integrity of the City.
It is blatantly obvious the City is giving preferential treatment (illegally?) to app-based companies. It is also blatantly obvious the City still salivates over the extra revenues flooding into its coffers from these rides. It is also illegal, in my opinion, under the Municipal Act for the City to use money collected from a business category for any use other than to regulate that business category.
But why would anyone expect the City of Toronto to act legally, morally or ethically? I don’t.
As a very interesting contrast, the City of Mississauga is at least examining the possibility of compensating its legal taxicab owners for their losses, like the Province of Quebec and other jurisdictions world-wide.
I’d dearly love to have a judge (or judges) weigh in on these questions. I have seen the Certification Motion Record for the ATOOL group now filed with the courts. It makes interesting reading. I am not a lawyer so I won’t comment on the case other than to say I do hope the judge(s) looking at the issues understand the depth of the betrayal the City visited on the taxi industry over the past five years, and both the real and potential consumer harm the City is allowing to develop. The certification hearing is anticipated sometime in October of this year.