Reader comments on Uber and Lyft; People Who Went to Harvard

1) In Thursday's e-mail, I shared how and why I've greatly reduced my usage of Uber (UBER) and Lyft (LYFT) and concluded:

If I represent a typical customer, Uber and Lyft are in big trouble... That said, I am hesitant to draw any firm conclusions from my own experiences and observations because I'm a sample size of one (remember, the plural of anecdote is not data).

So I'd be curious to hear from my readers – please let me know what you think by e-mailing me at WTDfeedback@empirefinancialresearch.com.

More than a dozen readers weighed in... And not a single one wrote favorably about the ride-hailing giants, which make me even more bearish about their prospects. Below are some of the responses, which I've grouped into different categories:

Similar experiences to mine

• "My wife and I were coming back from Puerto Rico last night by way of JFK airport, and we were eager to jump in an Uber or Lyft and get home to 25th Street in Manhattan.

"Normally this would be a $75 cab ride including tip and tolls.

"Shockingly (or, frankly, not so shockingly as this continues to happen), surge pricing drove the quoted ride-hailing prices up to a little over $150 (not including tip).

"Two weekends ago, we were returning from a wedding in Tampa on Sunday night and the same exact thing happened.

"I thought of your piece on Uber and Lyft's surge pricing and their relative value to taxis and I think you are spot in – this is just getting ridiculous. The value proposition has become quite terrible. Perhaps they are going to make a fortune this way (more earnings for fewer trips), but the brands are being severely tarnished." – Mark M.

• "Agree wholeheartedly. Uber prices and wait times at our St. Augustine, Florida home (to/from the Jacksonville airport) are up significantly over local limos.

"Same true to/from Midway Airport in Chicago, so we're back to old, reliable taxis, with their flat rates and now even luxury cars to compete with Uber.

"P.S. – No sooner had I hit the send button, my daughter texts me that Uber just cancelled her from downtown Jacksonville to the airport." – John B.

• "I normally take Uber or Lyft, but last week I took a taxi from Midway airport to downtown Chicago and it was $25 cheaper." – Anthony C.

• "I'm on board with you. Same experience here in D.C." – Howard L.

• "I gave up on both of these services quite some time ago. In the San Francisco Bay Area, their prices are now up to THREE times that of a licensed taxi. The illusion that disruptive ideas are 'better' is sometimes just that, an illusion." – Ramona R.

• "Regarding the cost of Uber rides, here in the SF Bay Area we have seen the increase in prices and it has affected how much we now use Uber (have never used Lyft).

"Typical for us on the mid-peninsula has been a round trip to either San Francisco or San Jose (SJC) airports for our travels. After checking Uber prices to get to SJC and back for a recent four-day trip to Colorado, we found it was far more affordable to drive our own car to the airport and park it nearby. A local large hotel within a mile of the airport offers very inexpensive daily rates to park in their parking lot and take their shuttle to the terminal, and of course they pick us up on the return. Very convenient.

"You are absolutely correct in your conclusions. As of late, I use a taxi or an independent. The cost is always much less, which I parlay into a tip." – Sam P.

• "Ditto in Charleston, South Carolina. Lack of drivers during the day and the surge prices can be 10X the normal pricing." – Burk H.

• "Some Uber feedback from someone who lives in Puerto Vallarta, Mexico.

"Taxis here are ubiquitous and very easy to hail and are surprisingly clean, but always one fears getting ripped off. Really hated the experience.

"Uber came along and we moved to only Ubers. What a change, what a relief!

"But lately they've been unreliable – can't get one at all. If our housekeeper works late, we often get her a Uber, but the past two times we had to hail her a cab because Ubers were so far away or not available at all.

"Big change. We know we can't count on Uber anymore, at least for the time being." – Sarah J.

• "We live in Philadelphia and have kids in New York and Los Angeles, and all six of have had the same situation you are describing... very unreliable and ridiculous pricing. We are doing everything we can to avoid Uber and Lyft for now." – Jim S.

• "My experience has been similar to yours. I live in New York City and used to take several Ubers a day. The price and service were great.

"I didn't use Lyft, but its prices sometimes seemed so low as to defy logic. I remember a friend taking a Lyft from my apartment to his late one evening for only $1.60 – far less than a bus or subway ($2.75), which, of course, are not a nice a way to travel.

"When the pandemic hit, I pretty much stopped using both Uber and cabs, but in recent months I have started getting around again. However, Uber is now so expensive – and the waits are so long – that I don't use it. I always take a cab.

"I was coming uptown from the Village one recent evening around midnight, and Uber's price was something like $48. So I walked a few blocks and got a cab, which cost about $20." – David S.

• "I use Uber much less, but that's because I'm not traveling as much anymore. Back in 2018, I stopped renting cars on business trips and started using Uber instead because it was more convenient. And sometimes taxis take forever to arrive at locations in smaller cities/towns.

"We've taken Uber to the airport before, but on our most recent trip we just took our car. It was a combination of the pandemic and surge pricing." – Frank K.

• "I haven't used Uber for a few months now but the service in London was getting MUCH worse even before COVID and continued to get worse through COVID – very long wait times, drivers driving towards you but then cancelling randomly, following very weird and long routes that their GPS would give them, and impossible to get through to customer service if something went wrong." – Khurrum M.

Regulatory issues

• "I would never try to use them in Europe because taxi drivers are regulated and Uber divers are not." – Pietro B. (from Italy)

• "I agree with you 100% on Uber and Lyft, but this is only half the story. Bigger is the beating they have been taking in European Union markets with government crackdowns and regulations such as that imposed in the UK. The only chance for Uber and Lyft to break through is via autonomous vehicles, which are a long way off.

"Last but not least, the most talented people in the firm are gone or on the way out. I see the LinkedIn updates on a regular basis from those I knew at the firm. The exit of talent is a huge loss and the replacement costs are very high. Markets will do what markets do but the picture is bleak." – Andy

The world has changed

• "How many business travelers have stopped traveling? So that volume has dissipated for both ride sharing and taxis alike. It will probably never go back to 100%, even after COVID is conquered." – Bill O.

Skepticism about Uber Eats

• "Uber was able to lean on the food delivery side, without which they would have gone belly up. This too is under big-time margin pressure from consumers and their restaurant partners." – Andy

• "I was a chef for many years and was approached about using these food delivery services like Uber Eats several times (long before 2020). In a business with slim profit margins to start with, to discount my prices even more so they can then mark them up and charge a delivery fee, just to hand the food off to some guy I don't know, for him to drop it off whenever they get there and then possibly get calls and complaints about it being cold and having to do refunds, yeah, that's a hard pass.

"It just didn't sound appealing to me at all. It may work for low-price-point restaurants that can do volume from it, but not for anything a little more upscale. As we come out of the pandemic even more, I think a lot more restaurants will either drop them completely as their dining rooms fill, or people will slow down using them. Doing takeout with a full dining room can be a nightmare, even for places that are set up for it. They both had their time and I don't seeing it lasting much longer." – Jim L.

The threat from e-bikes

• "In the five years or so leading up to the Dark Times that started in March of 2020, rideshare acted as a second car for my wife and me. We've been a single car household for over a decade, which is pretty rare here in Los Angeles but a good fit for us. We don't drive a lot in general, have short commutes, and I'm an avid cyclist and prefer to get around by bike whenever possible so a vehicle for each of us doesn't make much sense from a financial or practical standpoint.

"And that's where Uber/Lyft come in. Over those five years, I averaged around $2,000 a year on rideshare. Most rides were under $15 but they filled the gap where a car would have been convenient, such as attending a meeting where arriving sweaty from biking across town wouldn't be the best look.

"The last time I used rideshare was on March 4, 2020 when I took a Lyft to and from a KISS concert at Staples Center. Even with daily life back to as normal as it can be, I still haven't taken an Uber or Lyft because I used the money I saved on rideshare in 2020 to purchase an electric cargo bike which instantly became our second car.

"In yesterday's newsletter, I saw someone mention that you have an e-bike yourself. We purchased a Rad Wagon 4 from Rad Power Bikes. Its one-size-fits-most design means my wife and I can both ride it and we use it almost daily, from picking up dinner to making full-fledged grocery runs to effortlessly lugging home 100+ pounds of potting soil from our neighborhood nursery. Most importantly, our Rad Wagon allows me to ride to meetings that are 10 miles away faster than driving and have me arriving as winded as if I left our car with the valet.

"I feel the potential for e-bikes to completely transform the way people in the U.S. get around can not be understated and really fits into the concept of transportation as a service. (If Enrique were writing this, he'd be dropping a string of F-Bombs right now.)

"A Tesla-like tax credit for e-bike purchases called the E-BIKE Act was recently introduced in the Senate. If passed, it will surely kickstart more e-bike adoption which could very theoretically lead to less demand for Uber and Lyft. Perhaps the strongest sign that e-bikes will be here to stay is the fact that Harley Davidson is now offering a line of e-bikes at their dealerships. Major bike brands like Trek, Specialized, and Cannondale have really missed the ball on the coming tsunami of e-bikes.

"Hope this was some useful insight and I'm glad you and your wife had a nice time at Yosemite. We went there back in June for our anniversary and we squeezed in a hike to Mariposa Grove on our way out of the park. Good times.

"And on that note, I really enjoy reading about your travels. It doesn't come off as elitist at all and is very fascinating. If it wasn't for your newsletter I don't think I'd have ever taken the time to learn about Uzbekistan." – Todd M.

2) There's an old saying that the best humor is rooted in truth... In yesterday's e-mail, I shared the following joke:

Question: How do you know if someone went to Harvard?
Answer: Don't worry, they'll tell you!

One of the reasons I find it so funny is because it's so true, as this one-minute mash-up of video clips by comedian John Oliver makes clear: People Who Went to Harvard.

Best regards,

Whitney