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Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

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Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#281

Post by cylinder »

aianus wrote: post #198
nsp wrote: post #191

Earlier quoted context omitted.

To some degree, Juno's stated differentiator is being the best ride hail app from the drivers perspective by: - 50% of founder equity goes to drivers - 10% vs 20-25% cut of fares - no pooled concept (this may be purely because they're too small to support it, though it is also unpopular with drivers

Why do I care what the drivers like? I don't buy any other products or services based on the happiness of the workers. Uber still has the most drivers and the cheapest prices.

Are you really trying to argue that service doesn't matter? You're OK with a horrible grumpy waiter at your favorite restaurant?

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#282

Post by MarkMc »

automatwon wrote: post #276
letterthief wrote: post #268

Earlier quoted context omitted.

> The Uber model has no barrier to entry If uber has no barrier to entry, neither does facebook.

Facebook has network effects. I use it because my friends use it. I don't care if my friends use Uber, if a different Taxi company offers me the same service for cheaper.

Uber has network effects too. Facebook has friends, Uber has drivers. You certainly care how many drivers the Taxi company has because it affects the time you have to wait to be picked up.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#283

Post by surfmike »

deepnotderp wrote: post #259
jeffdavis wrote: post #253

Sincere question: what protects Uber from competition enough to imply huge profits in the future? Network effects don't seem that strong. People will download an app to save money, and drivers will download an app to make money. It doesn't cause any major inconvenience. In fact, it seems like a market that may approach perfect competition in a matter of years. There are only two companies now because there are only t…

Self driving cars change everything.

If Google and Tesla get self driving cars too, don't network effects suddenly disappear? The ebay analogy stops holding since the "sellers" (drivers) are a pool of self driving cars.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#284

Post by xapata »

jeffdavis wrote: post #253

Sincere question: what protects Uber from competition enough to imply huge profits in the future? Network effects don't seem that strong. People will download an app to save money, and drivers will download an app to make money. It doesn't cause any major inconvenience. In fact, it seems like a market that may approach perfect competition in a matter of years. There are only two companies now because there are only t…

Compare this with the airline industry. What protects Delta from competition enough to allow profits? Not very much. In fact, airlines have historically struggled to show profit since deregulation. In the last few years they've finally had some profits, but a tiny amount in comparison to the decades of taking on debt. Still, the airlines keep going.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#285

Post by surfmike »

MarkMc wrote: post #278
jeffdavis wrote: post #253

Sincere question: what protects Uber from competition enough to imply huge profits in the future? Network effects don't seem that strong. People will download an app to save money, and drivers will download an app to make money. It doesn't cause any major inconvenience. In fact, it seems like a market that may approach perfect competition in a matter of years. There are only two companies now because there are only t…

There is most certainly a network effect. It's similar to eBay: Buyers and sellers can switch to another eBay clone, but they don't because there are no buyers or sellers on the clone. Similarly, nobody will download another app if it doesn't have any drivers, and drivers will not install another app if there are no riders.

Doesn't this analogy stop holding with self-driving cars?

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#286

Post by morgante »

cylinder wrote: post #280
morgante wrote: post #246

Earlier quoted context omitted.

Juno is totally non-viable. Being "better for drivers" is not a competitive differentiator. 99% (including me) don't choose services based on which is "better for drivers."

Why not? The drivers are more pleasant and of much higher quality so I'm getting better service.

So then the competitive differentiator is "better drivers" and "better service" which are of course classic and common differentiators.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#287

Post by xapata »

bogomipz wrote: post #270
msoad wrote: post #263

Earlier quoted context omitted.

Yes, that's correct. The taxi business (now they called "ride sharing" for some reason!) is just like air travel. Price matters the most but brand and quality of service is important as well. It's a very low margin business and has a low barrier to entry. This makes Uber a risky investment in my opinion. Once Uber decides to make money, the real game will start. You'll see lots of competition and not much appetite fo…

>"Price matters the most but brand and quality of service is important as well." Many drivers drive for both Lyft and Uber so what exactly is that brand? The app? I don't see a lot of brand to be loyal to.

Perhaps that differs by city. Some cities have more competition among rideshare apps than others.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#288

Post by adventured »

MarkMc wrote: post #278
jeffdavis wrote: post #253

Sincere question: what protects Uber from competition enough to imply huge profits in the future? Network effects don't seem that strong. People will download an app to save money, and drivers will download an app to make money. It doesn't cause any major inconvenience. In fact, it seems like a market that may approach perfect competition in a matter of years. There are only two companies now because there are only t…

There is most certainly a network effect. It's similar to eBay: Buyers and sellers can switch to another eBay clone, but they don't because there are no buyers or sellers on the clone. Similarly, nobody will download another app if it doesn't have any drivers, and drivers will not install another app if there are no riders.

That's spot on. The massive moat is that Uber has captured the market, which requires both drivers and customers (not to mention the billions of dollars of global infrastructure & deployment, people talent, accumulated knowledge, brand & user trust, etc).

To compete you need a very large amount of capital and nobody is going to give you that money now that there is an Uber. You don't just have to replicate Uber, you have to then steal their drivers & customers, which is drastically more difficult than just replicating Uber (extremely difficult unto itself despite what the MVP crowd pretends). See: try raising large sums of money to go after Google's search business in the last decade.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#289

Post by xapata »

function_seven wrote: post #267
Bombthecat wrote: post #264

Earlier quoted context omitted.

You could say the same about chat app. One person downloads the app to chat. The other downloads to reply. And here we are. Still using WhatsApp:)

You really can’t. I can use any taxi company I want to get from A to B. I can’t use any chat app I want to talk to my cousin Alice or my brother Bob. I have to choose one that they’re already on. That’s the network effect. In transportation, all these taxi companies are using the same roads; the same network. I don’t have to make sure AcmeRideShare has permission at both the pickup and drop off points. And I can chan…

In the chat app comparison, your cousin Alice is the driver. Saying that the roads are the network is like saying the internet is the network.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#290

Post by xapata »

surfmike wrote: post #283
deepnotderp wrote: post #259

Earlier quoted context omitted.

Self driving cars change everything.

If Google and Tesla get self driving cars too, don't network effects suddenly disappear? The ebay analogy stops holding since the "sellers" (drivers) are a pool of self driving cars.

> suddenly disappear

No, they also need to spend an enormous amount on marketing.

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