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Why I don't believe in Uber's Success

blog.benjamin-encz.de

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Re: Why I don't believe in Uber's Success

#81

Post by avn2109 »

SatvikBeri wrote: post #79
avn2109 wrote: post #68

Earlier quoted context omitted.

TFA and a lot of commenters here don't seem to understand that Uber doesn't want to compete with taxi services, which are a niche business to be disrupted en route to the real prize. It wants to compete with your car - imagine 12 lanes of L.A. traffic composed mostly of Ubers. That's their dream. They even admit this in public. [0] The day they can get cost per mile one penny below what you'd spend owning a Toyota Ca…

I agree that Uber is trying to replace private car ownership, and I expect ride-sharing services like Uber/Lyft to succeed at this. But given those assumptions, is there any reason to expect them to be massively profitable? The current market seems to involve Uber & Lyft (& other competitors in different locations) competing on price, do you expect that to stop?

Presumably the (publicly) unacknowledged plan is to severely wound private car ownership and then collude with Lyft to fix prices, similar to how it worked with Didi in China [0].

There will likely be some regulatory capture on the side to discourage other competitors.

[0] http://www.wsj.com/articles/china-opens-antitrust-investigat...

Re: Why I don't believe in Uber's Success

#82

Post by chasing »

avn2109 wrote: post #68
CoffeeDregs wrote: post #52

The 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 th…

TFA and a lot of commenters here don't seem to understand that Uber doesn't want to compete with taxi services, which are a niche business to be disrupted en route to the real prize. It wants to compete with your car - imagine 12 lanes of L.A. traffic composed mostly of Ubers. That's their dream. They even admit this in public. [0] The day they can get cost per mile one penny below what you'd spend owning a Toyota Ca…

I believe the argument, though, is that transportation is a commodity product and, therefore, pricing is a race to the bottom.

Say all cars are autonomous and on-demand. You need a car. Uber costs $20. Lyft costs $15. Who do you go with? What happens to overall pricing over time?

Re: Why I don't believe in Uber's Success

#83

Post by mcguire »

vadym909 wrote: post #62
earthtolazlo wrote: post #53

Earlier quoted context omitted.

It lost 2-3 billion dollars last year and shows no signs of improving its margins anytime soon. How is that a success?

So then Amazon is not a success either?

Can you explain what Amazon's end game will be?

Re: Why I don't believe in Uber's Success

#84

Post by hx87 »

dajohnson89 wrote: post #34
matthewaveryusa wrote: post #8

Earlier quoted context omitted.

The question then becomes: Is a global taxi dispatcher worth 70 billion dollars? Maybe. Probably not.

My hunch is yes. I decided to do some quick math. -NYC has ~13,605 licensed taxicabs. -The average annual net income for a NYC taxi (in 2015, probably a bit lower now) was $58,555. -$58,555 * 13,605 = $796,640,775 This figure is for taxis only, in one (big) city. It leads me to think that $70 billion is not an absurd number, globally. edit: sources: https://www.yellowcabnyctaxi.com/blog/new-york-city-taxi-rev... http…

I doubt even a monopoly dispatcher will get all $800 million of the revenue though.

Re: Why I don't believe in Uber's Success

#85

Post by mcguire »

Keyframe wrote: post #22

I 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…

Does Uber have a competitive advantage over its competitors?

Re: Why I don't believe in Uber's Success

#86

Post by Keyframe »

mcguire wrote: post #85
Keyframe wrote: post #22

I 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…

Does Uber have a competitive advantage over its competitors?

Existing user base?

Re: Why I don't believe in Uber's Success

#87

Post by mcguire »

Tl;dr: Uber is using rule 1 of Monopoly 101: Subsidize your customers until you drive your competitors out of business. However, it does not appear they have a competitive advantage to prevent new competitors.

Edit: damn you, android keyboard!

Re: Why I don't believe in Uber's Success

#88

Post by AJ007 »

CoffeeDregs wrote: post #52

The 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 th…

I'm not sure why a Level 3 needs to be a person in the vehicle?

Uber may time their IPO just before they start having growth problems. That seems to have a high probability.

The contrarian side of me thinks that the more negative people become about a tech company the more likely it is to succeed (assuming a real product and not elaborate fraud.) Markets become far more favorable when all of your competitors believe what you are doing is a joke. The paradox being, perhaps the more people become convinced Uber will fail, the more likely it is they can pull this off.

It definitely is not as clear cut as starting an airline -- and it is a dynamic game. Is Uber/Lyft the starting point for calling a car or is it Android/iOS ; or is it Google Maps/Apple Maps ; or may be it is Siri/Alexa/etc.

I've suggested in other posts a ride sharing company may be able to get exclusivity contracts for a large metro area. This would be a step towards a lock in/monopoly. Earlier gen self driving vehicles may actually even need this.

Whatever behaviors Uber has created, I think they are going to survive in some form for a long time. Whether Uber goes belly up may be more about how carefully they hedged their financial risks.

Re: Why I don't believe in Uber's Success

#90

Post by bobbytherobot »

vadym909 wrote: post #62
earthtolazlo wrote: post #53

Earlier quoted context omitted.

It lost 2-3 billion dollars last year and shows no signs of improving its margins anytime soon. How is that a success?

So then Amazon is not a success either?

First off, Amazon never lost a billion dollars in a single year.

More importantly, Amazon could have been profitable for much of the time. Amazon was losing money because they were taking the profits from they successful ventures and pouring it into new ventures.

With Uber, what change do they make right now to switch to a very profitable company? Amazon had that option, Uber does not.

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