Saikat Bhadra

A more realistic #uber vs. car ownership comparison

YC’s head, Sam Altman, posted an interesting blog post on how Uber is now cheaper than his car and it hit the front page of Hacker News on Monday. However, his scenario is pretty unique in that he drives a Tesla Roadster with a cost of ownership quite different from the average car.

How does Uber compare to the cost of ownership for someone driving a “normal” car? AAA has a handy estimate of the cost of ownership for different car classes.

I took the base class, a small sedan, and adjusted the numbers for someone living in San Francisco. Specifically, I adjusted the gas numbers and added in a line for parking costs since most people who live in the city have to pay for a parking spot. On Uber’s side, I estimated an average of $2.08 cost per mile. This assumes a $1.75 base cost per mile and hitting a surge of 1.75X 25% of the time.

You can play with the spreadsheet here: https://docs.google.com/spreadsheets/d/13Enl89qImK3WSBWX2hp57d4eqaH-L9jOcyI03hn8ttY/edit#gid=0

Key takeaways:

  • The break-even point for Uber is around 4K miles. This is a no-brainer; if you rarely use your car, you should alternative services such as Uber, Lyft, & Zipcar.
  • Uber is not priced competitively for those who commute regularly. Specifically, when you estimate a yearly mileage of 15K miles (which can easily be reached for those who work in the Valley) the cost of Uber is over $20K more than car ownership. Uber would need to drastically cut fares to capture this market as car ownership is around $0.68 per mile. This number is already on the high end of the scale since the AAA estimates come from 2013 models. For those who own older cars, the cost of ownership is even cheaper as depreciation & financing costs are significantly less.

So for the majority of Americans, Uber probably isn’t cheaper than owning a car. A self-driving taxi, however, could change the equation since labor is the biggest cost driver for car services.

DMV Hack: Getting an early appointment to the DMV

After walking by the California DMV this week and seeing a harrowing 3 hour line, I turned to online appointment system and saw that appointments had been booked a month in advance:

Luckily, once a blue moon you can snag an early appointment if someone manages to cancel their appointment. So I wrote a small script to automatically book an appointment with mechanize & BeautifulSoup. I was able to score an appointment 3 weeks earlier with a few lines of code.

You can also do this for cooler stuff like building a bot to get a restaurant reservation like this Square engineer did.. My code is here: https://gist.github.com/saikatbhadra/6629031

Crossing my fingers that you get an early appointment!

Yelp! Does Houston have the most racist nightlife out of major US cities?

This is a follow-up on my earlier post on racism in Houston bars & clubs. 


Update: This made the front page of Hacker News! You can add to the discussion here.

A few weeks ago I ranted about racism in Houston nightlife. I’ve personally faced this, and  there’s been a lot of press on this. But again, press & personal experience doesn’t equal reality. 

So how do you find out if racism is a big problem in Houston nightlife? The problem with tackling thorny issues like this, is it’s hard to separate anecdotes & emotion from data. Specifically, getting data on actual incidents of racism is hard because most people don’t report them. But people do love to do one thing when they frustrated: people love to rant.

So where is a place where people rant about issues at businesses? Yelp! In fact, you are one Yelp search away from easily finding where people have complained about racism in Houston businesses: http://www.yelp.com/search?find_desc=racist&find_loc=houston%2C+tx

Using Yelp, you can easily find the number of comments mentioning the word “racist” at bars & clubs and compare this to the total comments in these businesses. After doing some number crunching across similar cities[1], I got a pretty clear result:

imageHouston Yelpers mention the word “racist” at over 4 times the frequency of Yelpers at similar cities in their reviews of bars and clubs.

I wanted to dig a bit further and find the businesses that have the highest % of Yelp comments mentioning the term “racist”. In order to filter out statistically insignificant scenarios, I only looked at businesses that have at least 3 comments mentioning the word “racist” and have at least 5% of their comments mentioning the term. There are only 23 businesses that fit this criteria out of the cities I chose. Guess where most of these bars & clubs belong?

image

You can find the raw data here. Or you can view the top 10 here:

  1. Vintage Lounge - Houston - http://www.yelp.com/biz/vintage-lounge-houston
  2. Roosevelt Lounge - Houston - http://www.yelp.com/biz/roosevelt-lounge-houston
  3. 4500 Washingon Avenue - Houston - http://www.yelp.com/biz/4500-washingon-avenue-houston
  4. Brunos Lounge - Los Angeles -  http://www.yelp.com/biz/brunos-lounge-chicago
  5. Estate Lounge - Houston -   http://www.yelp.com/biz/estate-lounge-houston
  6. Roak on Kirby - Houston -  http://www.yelp.com/biz/roak-on-kirby-houston
  7. The Circle Nightclub - New York -   http://www.yelp.com/biz/the-circle-nightclub-new-york
  8. Midtown Drinkery -  Houston, TX -  http://www.yelp.com/biz/midtown-drinkery-houston
  9. The Drake -  Houston, TX -  http://www.yelp.com/biz/the-drake-houston
  10. Bronx Bar - Houston, TX -  http://www.yelp.com/biz/bronx-bar-houston

There’s no way to connect comments mentioning the word “racist” to incidents of actual discrimination (anyone can leave a Yelp review), but there does to be some very extreme anomalies in Houston.

Looks like Houston might have a problem after all.

[1]  I chose similar sized cities by combining the list of the top 11 cities by population and metro areas by population. Yes, I picked the top 11 so I could sneak two of my favorite cities: Austin & my current home, San Francisco.  Here’s the list of metros that made the cut:

  • New York, NY
  • Los Angeles, CA
  • Chicago, IL
  • Dallas, TX
  • Houston, TX
  • Philadelphia, PA
  • Washington, DC
  • Miami, FL
  • Atlanta, GA
  • Boston, MA
  • San Francisco, CA
  • Phoenix, AZ
  • San Antonio, TX
  • San Diego, CA
  • San Jose, CA
  • Austin, TX

Offer: I will screen your resume for free as a Googler would

I get a bunch of questions about Google on Quora. A lot of these questions are from prospects who are trying to learn more about the tech giant and are considering applying there. My career has benefited from a lot of generous help from others so since I have a bit of free time, I wanted to give back a little.

So I’m promising to screen resumes to the first 15 people who send me their resumes exactly as I would if I was at Google (or any similar big tech company). Please e-mail at sbhadra.mail+screen@gmail.com

Rules

  • I will spend approximately 15 minutes on each resume I see; which is a bit more than I would do at Google (5-10 minutes)
  • Iterations count as a new submission; any re-reviews will count towards the 15 freebies I’m giving out
  • I will not review technical prospects as I have no Google experience in screening these candidates (and the interview process is fairly different)
  • If you are looking for roles in a specific area (business analyst, BD, product, etc.) please let me know so I can tailor my advice

My credentials

  • My linked in profile: http://www.linkedin.com/in/saikatbhadra
  • Relevant experience - I worked 2 years at a boutique consultancy as a strategy consultant, worked at an inner consulting group at Google, and then was part of founding team at Google Offers, where I worked in sales operations. I’m now in the startup world, which is a whole different ballgame for hiring.
  • Interview experience - I wasa heavy interviewer for the commerce & sales strategy teams at Google since I was part of the founding team that built those teams. I estimate that I led 50+ interviews in my time there. Here are the roles I’ve interviewed people for: Sales Strategy, Sales Operations, Biz Analyst, Research Analyst, and Product Management. I’ve had about 10 people join Google after interviewing through me.

If I have time, I’m happy to review past the 15 freebies for the small price of a coffee / beer to pay for the beverage that I’ll drink as I screen your resume :).

What the city feels like during Burning Man

whilstinsf:

image

Submission by: <SOMArts>

(Reblogged from whilstinsf)

Healthcare: Why does America spend so much, for so little?

America spends a lot on healthcare. In fact, with 18% of our GDP dedicated to healthcare expenditures, we spend over double the 8% the average developed nation spends [1]. 

As an entrepreneur, this pain really hits home, as I have to pay healthcare costs out of pocket. Once you start paying for costs from your wallet instead having a large employer shield you, you really feel the pain of healthcare pricing nightmares, like paying a 1000% markup on a generic Tylenol pill.

So how does our spending stack among peers? Here’s a selected view of how our spend looks among “highly developed” countries (as rated by the UN HDI report):

image

It’s clear that we spend significantly more than the developed world. But it could make sense, right? Perhaps our medical care is significantly better than the rest of the world. But, how do you measure quality of our healthcare? As any successful entrepreneur will tell you, the best way to measure the efficacy of a program is through ROI (i.e. results). For most, life expectancy is one of the best metrics of measuring our healthcare system[2]. After all, what’s the point of new drugs & treatments if they don’t actually help us live longer?

Does spending more on healthcare give Americans better results? Not really. When we compare healthcare expenditures vs. life expectancy in the same peer group, our ROI on healthcare expenditure doesn’t look too great:

image

Comparatively, the US has one of the most inefficient healthcare expenditures. America spends more than double most of our peers and yet our life expectancy rates are below their average. But this doesn’t make sense - US healthcare is largely free market (comparatively) and a free market should reach economic equilibrium. Shouldn’t the “invisible hand” produce better results?

Well let’s review the key assumptions required by a perfect free market which healthcare may lack [3]:

  1. Zero entry and exit barriers – A lack of entry and exit barriers makes it extremely easy to enter or exit a perfectly competitive market.
  2. Perfect factor mobility – In the long run factors of production are perfectly mobile, allowing free long term adjustments to changing market conditions.
  3. Perfect information - All consumers and producers are assumed to have perfect knowledge of price, utility, quality and production methods of products.
  4. Homogenous products - The qualities and characteristics of a market good or service do not vary between different suppliers.
  5. Non-increasing returns to scale - The lack of increasing returns to scale (or economies of scale) ensures that there will always be a sufficient number of firms in the industry.

In fact, the healthcare market strays pretty far from most of the free market assumptions. When’s the last time you knew the price or quality of most healthcare products? Furthermore, the underlying objective of free markets & the healthcare market are completely different. A free market markets maximizes economic surplus while a proper healthcare system should maximize the health ROI (health of the population vs. $) rather than the economic surplus of the system.

This isn’t exactly a new conclusion. Economist Paul Krugman points out the competition fallacies that make the free market fail to work for the US healthcare system [4]:

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care.

The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. (“I hear they’ve got a real deal on stents over at St. Mary’s!”).

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don’t trust them — they’re profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn’t work as a standard market story.

Kenneth Arrow has a much more detailed paper on the subject [5].

So what are some reasons on what’s to our heavy cost of healthcare?  [6]

  • Higher prices for the same goods and services (likely stemming from gaps in the free market assumptions)
  • Significantly higher administrative costs due to our HMO/PPO system
  • Higher treatment costs by American tort laws

Well at the very least, we haven’t become commie crazies right? Actually, the US has more government healthcare expenditures than almost every country in our peer group that provides “socialist” universal healthcare:

image

In some ways, our healthcare system resembles the exact Soviet systems that we fought so hard to avoid; lots of government pork with little results or efficiency and arbitrary pricing. The only difference is there is plenty of private pork too.

I don’t know what a better solution looks like, although it’s clear there are some good ideas across the globe. Many solutions don’t need to be as rigidly socialist as some of our European peers. For example, healthcare tourism startups could exploit arbitrage off pricing differences across different countries and introduce more pricing competition (leading to lower US costs over time). 

However, it’s clear that the current healthcare debate has descended into dogmatic arguments that are largely useless (capitalist vs socialist, left vs right, Democrats vs. Republican). Until we shift the dialogue back into the rational and  explore solutions that are aimed at improving our healthcare expenditure ROI, our wallets will still pouring out way too much for healthcare.

[1] 2011 WHO NHA Indicators; average of non-US countries % of GDP spent on healthcare expenditure in the HDI class “Very Highly Developed”. Globally the US ranks 3rd in healthcare expenditures as a % of GDP, just behind Sierra Leone & Liberia; two countries that must spend a disproportionate amount on healthcare due to having some of the weakest economies & highest mortality rates in the world.

[2] A better metric would be life expectancy calculated by segmenting out violence from mortality rates since violence is mostly outside of the medical realm, but I couldn’t find any clear sources for this metric.

[3] http://en.wikipedia.org/wiki/Perfect_competition

[4] http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

[5] http://www.who.int/bulletin/volumes/82/2/PHCBP.pdf

[6] http://economix.blogs.nytimes.com/2008/11/14/why-does-us-health-care-cost-so-much-part-i/

(Reblogged from chimeracoder)