Why everyone assumes that Uber could be allowed to become a monopoly? There are anti-monopoly laws. I understand that so far Uber was allowed to break lots of laws - but this cannot go on indefinitely.
Why I don't believe in Uber's Success
51–60 of 413 posts
Re: Why I don't believe in Uber's Success
#52The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs).
I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost those regulations under Reagan.
To wit, I had dinner with a few friends in SF and it was raining when we left: "I'll call an Uber and we can share. ewww... 250% surge pricing or $90. Lemme check Lyft. Sweet, Lyft is about $50. Our Lyft will be here in 3 minutes." There was zero friction switching from Uber to Lyft.
Winning in this market seems to require a Level 4+ autonomous car [1] monopoly. Level 4+ autonomous cars are not going to be here anytime soon and Uber's not going to have a monopoly. So it's going to continue to be a gnarly pricewar, made worse by Level 3 (in which the "driver"/pilot is a student doing his homework for $5/hour, taking over driving once or twice per hour).
Not sure I agree so much with the body of TFA but I certainly agree with its conclusion.
[1] http://www.techrepublic.com/article/autonomous-driving-level...
Re: Why I don't believe in Uber's Success
#53I live in Singapore and Uber is a little cheaper than the excellent cab services which operated here even before Uber. There is a big competitor to Uber here called Grab. I switched to Uber because their service is good, drivers are gracious and cars are nice and they give me good offers. Last year I took 300 Uber rides, never once taking the usual Comfort Delgro Cab because their drivers suck. If prices were the sam…
It lost 2-3 billion dollars last year and shows no signs of improving its margins anytime soon. How is that a success?
Re: Why I don't believe in Uber's Success
#54I don't understand his point. Maybe I'm dense (today, ha). If Uber has a (simplified) split cost per drive consisting of vehicle (+maintenance) and/or fuel & driver. If subsidised part is generally covering the driver part. When you replace driver with autonomous vehicle and you remove subsidies, you're left with a sustainable (presumably) model on a certain margin that is already rolling. Rolling in a sense that it…
The Uber we know right now will probably transition into the self-driving car-based company for freight, passenger transport and ride sharing. It'll be a bit unsettling to see what'll happen to the drivers they're using right now.
I personally think that Uber is not an ethical company (I do live in Europe). They are exploiting tax and legal loopholes to profit off of both drivers and countries, simply because regulation for a taxi company that would be set up like Uber is does not exist yet and most countries take their time to regulate.
When Uber is put up to the same scrutiny as taxi companies are (to ensure their drivers are up to the same standard), they refuse to compete and instead of paying the same tax everyone else does and abiding by the same regulations everyone else does, they just leave the market.
Don't misunderstand me, taxi service in my country is horrible, they're useless and rude and service is generally bad, but just because that's the situation, we should try and improve that, instead of allowing companies like Uber to exploit the situation.
Re: Why I don't believe in Uber's Success
#55Earlier quoted context omitted.
The author's not making the point that there is no margin, but rather that with self-driving cars it'll be a quick race to the bottom against competitors, thus eroding whatever margins Uber is left with after replacing human drivers.
Question is, who are competitors with same scope as them? I don't know any. They are already in position to just switch over. Others would have to build their network first. It's a running start that depends on them playing their cards right.
What is scope for Uber-likes? What is network? They're simply leveraging a brand - it is almost no moat versus a competitor, especially if they have a structural advantage.
An example advantage would be an autonomous car manufacturer entering the market - they can simply blow Uber out of the water on cost alone.
Re: Why I don't believe in Uber's Success
#56In my opinion, giving large scale subsidies to customers seems like a business anti-pattern, and is surely gonna kill a lot of startups in near future. I have been sold to the Idea that Investors are killing any Internet "Business" by advising Founders against simple & straight-forward business plans. They constantly ask founders not to monetize earlier and wait until founders have no choice but to trash out the comp…
Bing might be 90% as good as google, but when people are trying to search for something they are just going to use google. I really started to realize how useful Uber was when i was traveling internationally I just pulled out my phone and a car came. I didn't have to worry about what the rate was going to be. It might have even been above what a taxi might charge, but at least I knew what the cost was going to be. It…
I'm not sure how usefulness-when-traveling-internationally is relevant when the vast majority of the market for Uber, Lyft, etc will never board a plane more than a handful of times in their lives...
EDIT: typo ("irrelevant" -> "relevant")
Re: Why I don't believe in Uber's Success
#57> Uber’s growth is fueled by subsidies A lot of people think if their Uber/Lyft ride is cheaper than their traditional taxi because it's subsidized. The lower fare for the most part is due to extreme efficiency difference between a taxi company and Uber/Lyft. 1. Uber/Lyft don't own the cars. They are leveraging car owners capital 2. Uber/Lyft drivers are more efficient because they don't have to roam around the city…
"Subsidies for Uber's drivers are responsible for the majority of the company's losses globally, [head of finance] Gupta told investors"
https://www.bloomberg.com/news/articles/2016-08-25/uber-lose...
Re: Why I don't believe in Uber's Success
#58Earlier quoted context omitted.
How would one short a pre-IPO company. Betting sites?
There's a startup, dotblu I believe, that allowed you to bet on anything. It was with fake blupoints, but I think their plan was to then transform the site into a general purpose betting platform where folks like you would shell out real money on a well defined bet. I think they pivoted to do esport betting.
According to Crunchbase, DotBlu has closed.
Re: Why I don't believe in Uber's Success
#59> Uber’s growth is fueled by subsidies A lot of people think if their Uber/Lyft ride is cheaper than their traditional taxi because it's subsidized. The lower fare for the most part is due to extreme efficiency difference between a taxi company and Uber/Lyft. 1. Uber/Lyft don't own the cars. They are leveraging car owners capital 2. Uber/Lyft drivers are more efficient because they don't have to roam around the city…
Uber is fueled heavily by subsidies. I took an Uber pool to work, set price of $25. I was the only one picked up, but due to traffic it took ~1hr. The total price that the driver saw was ~60. Someone paid that driver the $35, and it wasn't me, it was Uber (venture capital). That is purely subsidizing and artificially lowering prices.
Re: Why I don't believe in Uber's Success
#60In my opinion, giving large scale subsidies to customers seems like a business anti-pattern, and is surely gonna kill a lot of startups in near future. I have been sold to the Idea that Investors are killing any Internet "Business" by advising Founders against simple & straight-forward business plans. They constantly ask founders not to monetize earlier and wait until founders have no choice but to trash out the comp…
I think a lot of investors and founders try to replicate the model that worked for Paypal. By accepting a high customer acquisition cost (in the form of literally giving away money) at the start you can scale up phenomenally quickly. It's a proven model. The problem is that it's hard to know if you can still attract new customers without that artificial appeal, so actually stopping is a huge risk. Your growth figures could collapse. Uber have managed to amass such a ridiculous warchest of cash that they won't need to stop for a really long time. And I suppose that's the point - if they can get to profit even with the subsidies before they run out of money they won't ever have to stop giving away money to new customers.