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Uber launches flat fares in San Francisco through subscription

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Re: Uber launches flat fares in San Francisco through subscription

#121

Post by ethanbond »

foobarqux wrote: post #89
ethanbond wrote: post #75

Earlier quoted context omitted.

Okay and then one of the 13 other startups doing this suddenly become able to undercut Uber because they have VCs who are willing to gouge the actual balance sheet in order to put Uber out of business. Crucially, Uber doesn't own the cars nor the drivers. Anyone willing to throw more cash to drivers and take less cash from riders (with the infusion of VC funding) can instantly steal both the supply and the demand fro…

Why would Uber let a competitor undercut them?

Because they have a finite pile of VC cash to burn through.

Re: Uber launches flat fares in San Francisco through subscription

#122

Post by llamataboot »

serge2k wrote: post #113
ianferrel wrote: post #88

Earlier quoted context omitted.

Because Uber is outcompeting them on VC subsidies. The point of the parent is: How does Uber turn all these subsidies into an actual profit someday? It's easy to undersell your competitors when you're burning money. Once the VC dries up, how does Uber compete with any other entrant?

If Uber grows to a point where they can set their prices to get a reasonable profit margin. If their competitors can't really undercut and make money then they have to rely on VCs who are willing to burn cash to help a competitor grow. But why a VC do that? `

True sometimes, not at all other times. Or else we would all still be using Friendster. I agree in this case there are significant barriers to entry and that once Uber captures the market they will likely have it all the way through to self-driving taxis (10 years?), but there's some VCs out there that like to fund the underdog under hopes that it can leapfrog and then got the overpour of an already existing market that has learned that a technology exists (whether that be the technology of logging on and seeing what all your friends did today or the expectation that you could press a button on your phone and have a driver show up at your door in 5 minutes)

Re: Uber launches flat fares in San Francisco through subscription

#123

Post by maerF0x0 »

capkutay wrote: post #116
the_watcher wrote: post #97

Earlier quoted context omitted.

> but now there seems to be no barrier to entry for any competing service except writing an app. Except network of drivers, network of riders with the app installed, name recognition, capital to run the backend systems and delve into mapping algorithms, etc.

Yeah I think barrier to entry is misunderstood as a technical attribute of a company. Of course it's possible to build some app that tells people nearby to pick them up with metering/billing services built in. From a business standpoint, it would almost be impossible to duplicate what they have today.

at least not without a 10x improvement in some area.

If someone can get the cost down to 1/10th or speed it up 10x etc, then uber may find itself down and out (or racing to catchup).

Re: Uber launches flat fares in San Francisco through subscription

#124

Post by maerF0x0 »

r00fus wrote: post #107
Analemma_ wrote: post #10

Earlier quoted context omitted.

Margaret Thatcher once said "The problem with socialism is, you eventually run out of other people's money", which makes it ironic and humorous that Uber, the poster child of Valley Objectivism, has basically the same problem with their "price dumping funded by VCs" model.

Price dumping is the precursor to monopoly/cartel which then results in unassailable market barriers to entry and consequently large premiums. If you're paying too little, you've got to expect that situation is not sustainable - either that good deal withers, or the vendor's lock on their customers means they can raise prices arbitrarily.

It might not be the customer they squeeze though. Could be the drivers.

Re: Uber launches flat fares in San Francisco through subscription

#125

Post by rdl »

maerF0x0 wrote: post #123
capkutay wrote: post #116

Earlier quoted context omitted.

Yeah I think barrier to entry is misunderstood as a technical attribute of a company. Of course it's possible to build some app that tells people nearby to pick them up with metering/billing services built in. From a business standpoint, it would almost be impossible to duplicate what they have today.

at least not without a 10x improvement in some area. If someone can get the cost down to 1/10th or speed it up 10x etc, then uber may find itself down and out (or racing to catchup).

If you're talking about scale: Just build an app which cherry-picks part of the market -- either specific users or specific locations or specific use cases -- and then fails back to Uber (automatically, or manually) when unavailable.

i.e. I could build "the Uber for when you want to go out on a date and impress someone in the car" as an overlay service.

Re: Uber launches flat fares in San Francisco through subscription

#126

Post by ricardobeat »

vwcx wrote: post #77
gogopuppygogo wrote: post #74

Earlier quoted context omitted.

All electric vehicles that drive themselves will make it sustainable. They can afford to burn cash while they get the fleet going and then they replace all their expensive and error prone human labor with cars that drive themselves and don't need to sleep.

The word "sustainable" in your reply is a joke when you consider the unsustainability of the automobile for single rider transit. Electric or not, it's a tough sell compared to mass transit.

Not if one car serves, let's say, 200 people a day instead of a single owner.

Re: Uber launches flat fares in San Francisco through subscription

#127

Post by methehack »

capkutay wrote: post #116
the_watcher wrote: post #97

Earlier quoted context omitted.

> but now there seems to be no barrier to entry for any competing service except writing an app. Except network of drivers, network of riders with the app installed, name recognition, capital to run the backend systems and delve into mapping algorithms, etc.

Yeah I think barrier to entry is misunderstood as a technical attribute of a company. Of course it's possible to build some app that tells people nearby to pick them up with metering/billing services built in. From a business standpoint, it would almost be impossible to duplicate what they have today.

I entirely disagree. I don't see proprietary technology that can't be duplicated or bought. I see _some_ network effects but ultimately the drivers will go to the highest bidder and the riders will go to the lowest price. I see _some_ brand equity, but not much. Maybe a little economy of scale, but not much. Yes, they have a head start, but they are far from enthroned.

Ultimately, this space will operationalize out to the company that can manufacture safe and reliable self-driving cars most efficiently. That's kind of how you can tell uber hasn't won yet: if a company came along that was doing that, it would eat their lunch.

Further, faced with the awesome self-driving car company, uber's hungry huge capital needs thus far will be nothing but a burden.

I believe they timed this all wrong -- they are myspace and in the wrong business.

Re: Uber launches flat fares in San Francisco through subscription

#128

Post by rhizome »

mmanfrin wrote: post #7

I used Pool last night in the city. Took me from the Fidi to Inner Richmond. $2.37. It was almost cheaper than Muni. I can't imagine the drivers are making much at all .

I can't imagine the drivers are making much at all.

Thing is, how many people does it take to run a medallion/dispatcher cab company? Aside from the drivers, maybe 10-20 people? An app-aided service could flourish with many fewer employees, so when you have Uberlikes trying to define a market they're doing so at a chosen price point. There's nothing that says that a sustainable price point can't be (much, much) lower. If a service can do 80% of Uber functionality/reliability/satisfaction, they might be able to easily undercut them on price and still have everybody be happy.

Re: Uber launches flat fares in San Francisco through subscription

#129

Post by rhizome »

the_watcher wrote: post #99
SilasX wrote: post #61

Earlier quoted context omitted.

They only guarantee gross pay -- that figure doesn't include Uber's cut or operating expenses[1][2]. Together, that would make your taxable income something like 60% of the figure. [1] http://therideshareguy.com/what-to-make-of-the-2016-uber-hou... [2] And seriously, phrasing the guarantee as before their own cut? Come on, guys.

> And seriously, phrasing the guarantee as before their own cut? Come on, guys. I see your point here and am annoyed by this tendency, but to be fair, in the US, this is pretty common. After all, salaries are reported pre-tax, despite a $100K salary meaning wildly different post-tax nets depending on where in the country you live.

It's like saying the income of a waiter is equal to the check totals they serve.

Re: Uber launches flat fares in San Francisco through subscription

#130

Post by BinaryIdiot »

sickrumbear wrote: post #49
jeffjose wrote: post #31

Earlier quoted context omitted.

I thought that was clear. What were you confusing that with? I'm trying to understand what you initially thought it was.

not op, but i assumed the 'upfront' would fund the rides as well, vs. just 'unlocking' them. i read it as more of an initial prepayment.

Same; this is how it read to me. I was confused seeing this in the comments.
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