I was visiting my father six or seven years ago, the first time I ever experienced the world of ride sharing, as they call it. For one reason or another, a lot of Uber clones began operating in the big cities, and people rushed to take part in this emerging gig economy.
My father at the time had bought three vehicles. The initial investment was steep for him—the cars being brand new—but the returns suggested he had made a good choice. Like many “new shiny things,” the business was booming. That would change, and rather quickly.
The reasons were many, but to be honest, not surprising. These things are bubbles of a kind, at least in my view. The hype wasn’t rational from the start. Looking back, it seems obvious, but hindsight is always 20/20.
When I moved to Ecuador, part of the plan was to help my dad with his business.
“Do you know about cars?” he asked one day.
“The basics. I’m not really a car guy,” I answered.
“Well,” he said, “you’re going to learn with me.”
The following months became an emotional roller coaster for us, especially for me. I wasn’t equipped to deal with this world—the world of taxis. The dishonest mechanics, the shady drivers, the inevitable brushes with the authorities. Everything about this business screamed “cut your losses.” But there we were, stubborn, determined to be the ones who cracked the code, the ones who could actually make it work.
Not everything was bad, of course. I ended up learning a lot about cars. I had to. Getting ripped off by mechanics pushed me to learn, so I started watching videos, buying tools, and teaching myself. I still have those tools today, and the knowledge remains fresh.
The spell of stubbornness held me so tightly that not only was I helping my dad with his cars—which at one point grew to ten taxis—but I also bought three of my own. “I’m already doing this 24/7,” I thought. “Might as well get my own cars and make some income for myself.”
I don’t think there’s a punchline here. Everyone can guess what happened next. We lost. I lost. The business deteriorated until I finally had to cut off a few fingers to save my hand, so to speak. Things got so bad, and funds ran so low, that I built an engine lift from scratch to replace the motor in a Kia that a drunk driver had destroyed—and that insurance refused to cover. My choice was to spend $4,000 at a shop or buy a motor for $800 and do it myself.
By then, I was running low on money, patience, and hope.
My older brother José—yes, the developer who’s a Hivean now—found me a short-term coding job for iOS. In between being a taxi manager and mechanic, I was trying to code a food delivery app on a laptop. That gig only lasted a few months, and though I made some good money, you can probably guess what I did with it. Right—I spent it on the cars.
Why am I sharing this story? Because now I know exactly what I was living through. I have a name for it: the sunk cost fallacy. A very real thing, and one we would all do well to recognize.
Some lessons in life come quickly, like not touching a candle flame with your bare finger. Others take months or even years before we really understand them.
I’m not saying I’m immune to this trap today. But at least I’m aware. And in my opinion, I’ve been doing a little better.
—MenO
Versión en español
Hace seis o siete años visité a mi padre, la primera vez que experimenté el mundo del ride sharing, como lo llaman. Por una u otra razón, empezaron a operar muchos clones de Uber en las principales ciudades, y la gente se lanzó a participar en esta naciente economía de “gig jobs”.
Mi padre, en ese entonces, había comprado tres vehículos. La inversión inicial fue bastante alta para él—los carros eran nuevos—pero las ganancias parecían indicar que había tomado una buena decisión. Como suele pasar con las “cosas nuevas y brillantes”, el negocio estaba en auge. Pero eso cambiaría, y bastante rápido.
Las razones fueron varias, pero siendo honestos, nada inesperado. Estas cosas son burbujas, al menos así lo veo yo. El entusiasmo no era racional desde el inicio. Viéndolo ahora parece obvio, pero ya sabes, dicen que todo es más claro en retrospectiva.
Cuando me mudé a Ecuador, parte del plan era ayudar a mi padre con el negocio.
“¿Sabes de carros?”, me preguntó un día.
“Lo básico. No soy un tipo de autos”, respondí.
“Pues vas a aprender conmigo”, dijo.
Los meses siguientes fueron una montaña rusa emocional para nosotros, y sobre todo para mí. Yo no estaba preparado para lidiar con este mundo: el mundo de los taxis. Los mecánicos deshonestos, los choferes poco confiables, los inevitables roces con las autoridades. Todo gritaba “corta tus pérdidas”, pero ahí estábamos, tercos, convencidos de que seríamos los que descifraríamos el código, los que sí podrían hacerlo funcionar.
No todo fue malo, claro. Terminé aprendiendo muchísimo sobre autos. Tenía que hacerlo. Haber sido estafado tantas veces por mecánicos fue toda la motivación que necesité para ponerme a aprender. Empecé a ver videos, comprar herramientas, y enseñarme a mí mismo. Aún conservo esas herramientas hoy, y el conocimiento sigue fresco en mi mente.
La terquedad me tenía tan atrapado que no solo ayudaba a mi papá con sus carros—que en un momento llegaron a ser diez taxis—sino que también compré tres propios. “Ya estoy en esto 24/7”, pensé. “Bien podría tener mis propios autos y generar ingresos para mí.”
No hay un remate aquí, porque creo que todos esperan lo que viene después. Perdimos. Yo perdí. El negocio se deterioró hasta el punto en que tuve que cortar algunos dedos para salvar la mano, por decirlo así. La situación llegó a ser tan grave, y los fondos tan escasos, que terminé construyendo un gato para motores desde cero, con tal de reemplazar el de un Kia que un borracho había destrozado—y que el seguro se negó a cubrir. La opción era gastar $4000 en un taller o comprar un motor por $800 y hacerlo yo mismo.
A esas alturas estaba quedándome sin dinero, sin paciencia, y sin esperanza.
Mi hermano mayor José—sí, el desarrollador que ahora es hiveano—me consiguió un trabajo temporal programando para iOS. Entre ser administrador y mecánico de taxis, intentaba sentarme en la laptop a programar una app de reparto de comida. Ese trabajo duró solo unos meses, y aunque logré ganar buen dinero, seguro puedes adivinar en qué lo gasté. Exacto, en los autos.
¿Por qué comparto esta historia? Porque ahora sé exactamente lo que estaba viviendo. Ahora tengo un nombre para ello: la falacia del costo hundido. Una realidad muy concreta, y algo con lo que todos deberíamos familiarizarnos.
Hay lecciones en la vida que aprendemos rápido, como no tocar una vela encendida con el dedo. Pero hay otras que toman meses, incluso años, en entenderse del todo.
No digo que hoy sea inmune a esto, claro que no. Pero al menos soy consciente. Y en mi opinión, lo estoy haciendo un poco mejor.
—MenO
Some lessons in life are hard earned, but they define us.
precisely... we wouldn't be us otherwise.
This was a really thoughtful read. It’s not easy to admit when something isn’t working, especially after putting in so much effort. I like how you turned the experience into a life lesson about awareness and knowing when to move on.
Hi,
Your positive accent on my blog brought me here. Then I saw Ecuador. I just appreciated an account named Hive Ecuador a few minutes ago.
To this write-up, I must say you are a fantastic writer. It's very engaging. You got me a bit worried when I read,"..cut off a few fingers to save my hand..", until I saw it was figurative.
Well, I admire your doggedness in learning a new biz via your Dad. Knowledge they say, is never wasted. You have indeed gained a lot in that field.
You have such a great command of English that I was lost in the third to last paragraph wherein is contained, "the sunk cost fallacy" which I don't understand. I think I have to enrol to learn of thee sir.
So are you still into the taxi biz?
Thanks again for visiting my most recent blog.
Best regards.
Sadly my father remains "in the biz" although I try to convince him to abandon it for good weekly. I doubt I will ever touch that industry again, but I'm glad I get to keep the knowledge.
Thanks for the kind words.
Oh ok just your father now. I wish you explained the phrase I referred to as I rounded off.
My pleasure, it's only normal when you see a great writer.
Cheers