Why I don't believe in Uber's Success • Hacker News Board

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

#131

Post by discodave » Thu, Jan 19, 2017, 7:34 PM UTC

dageshi wrote: post #95

vannevar wrote: post #80

Earlier quoted context omitted.

This is a good point, but it doesn't change the prognosis. Uber will run out of runway long before that vision can be realized. And even if by some miracle it doesn't, it will find itself in a low-margin commodity business. Unless it can muscle its way into a monopoly, it can't win. Which explains the company's aggressiveness and anti-competitive nature.

Amazon is in a low margin commodity business with massive amounts of competition, but they're still massive and becoming even bigger because they do what everyone else can do just that little bit better that there's no real reason to switch away.

Amazon actually didn't have much competition at a key point in it's growth, i.e. just after the dot com crash. Amazon survived, many did not and Amazon then had a few years to cement their dominance in the online shopping space.

Amazon is also very different from Uber in that it a) went public earlier and b) didn't need huge outside cash injections like Uber and c) Wasn't making a huge gross loss on sales like people claim Uber is.

I believe Uber has already lost more money than Amazon has in it's entire existence!

http://s1.ibtimes.com/sites/www.ibtimes.com/files/styles/emb...

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

#132

Post by lg » Thu, Jan 19, 2017, 7:35 PM UTC

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…

southwest is profitable. anyway uber does not have to deal with pilots' unions and the faa regulations: http://philip.greenspun.com/flying/unions-and-airlines

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

#133

Post by gph » Thu, Jan 19, 2017, 7:35 PM UTC

iamcasen wrote: post #112

What OP, and everyone in this thread don't seem to understand is that Uber has waaaay more up it's sleeve than a mere taxi app. Uber has more data about traffic patterns in every major city they operate in, than any other entity, including the cities themselves. Uber can use that data as leverage in so many ways. They have an API, they are a logistics platform in a sense. Uber's endgame will be allowing people to plu…

Good point, but to play devil's advocate the same general things were said about Twitter and other tech startups. Their main product doesn't have long term profitability, but just think of all that data they have! Surely they must be able to get tons of value out of that right?

Easier said than done.

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

#134

Post by erispoe » Thu, Jan 19, 2017, 7:35 PM UTC

cody3222 wrote: post #102

The network effects are pretty obvious actually: as the number of people on the platform increases, the amount of time a driver has to drive to pick you up becomes increasingly shorter, thus enabling the drivers to spend more of their time with a passenger in their car (which is when they are earning money). If drivers are making more money, Uber can pay them less (reduce the subsidy). Old taxi cab companies can't co…

Yes but how much are you ready to pay to divide your waiting time from 3min to 1min?

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

#135

Post by sonotwhat » Thu, Jan 19, 2017, 7:36 PM UTC

ahuja_s wrote: post #21

I 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…

I have lived in both the states and in Singapore (current). I've taken approximately the same amount of Ubers as you but it's also because its prohibitively expensive to own a car here. For the benefit of others: it can cost upwards of $100k to own a car, and that's for a cheap ass car and you've a maximum tenure of 10 years on that.

I've to agree with you on the other points however, traditional cab companies have shitty drivers who would mostly refuse to take you to your destination. Grab car drivers are usually rude (relatively) and unpleasant to deal with. I seriously wonder why this is so, in an island as small as ours and with both companies marketing to the same pool of potential drivers.

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

#136

Post by jerf » Thu, Jan 19, 2017, 7:36 PM UTC

iamcasen wrote: post #112

What OP, and everyone in this thread don't seem to understand is that Uber has waaaay more up it's sleeve than a mere taxi app. Uber has more data about traffic patterns in every major city they operate in, than any other entity, including the cities themselves. Uber can use that data as leverage in so many ways. They have an API, they are a logistics platform in a sense. Uber's endgame will be allowing people to plu…

"Uber has more data about traffic patterns in every major city they operate in, than any other entity, including the cities themselves."

I imagine Google has approximately two to three orders of magnitude more data from cellphones and maps usage. Pull open your Uber app, zoom out until you see, say, 20 Uber drivers. They make a point here, a point there. The Android phones in cars would just make lines on your display. So does Apple, probably, or whoever gets the Apple Maps data.

I think Google won't be all that interested in packing that up and making it available... but then again, if Uber's worth 68 billion on the back of that data they may well change their mind.

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

#137

Post by secabeen » Thu, Jan 19, 2017, 7:36 PM UTC

Keyframe wrote: post #61

ithinkinstereo wrote: post #49

Earlier quoted context omitted.

> Question is, who are competitors with same scope as them? I don't know any. Presumably traditional car manufacturers (GM, Ford, Toyota, BMW, etc.), upstart car manufacturers (Tesla), and even other large tech conglomerates (Google, Baidu, etc.). > 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. Ube…

Why aren't car manufacturers already in logistics business? Or are they? I'm trying to find sources. I see VW has its own logistics group, but only for their own use.

They have been. Between 1987 and 2005, Hertz was owned by Ford and Volvo. They spun it off to private equity in 2005, but it has happened in the past.

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

#138

Post by abalone » Thu, Jan 19, 2017, 7:36 PM UTC

tl;dr He thinks UberPool is a viable business with network effects, but Uber's valuation is too high.

He didn't really support that well though. If everybody uses UberPool because the economy of scale tied to the network size is unbeatable, that's a lot of riders. It doesn't seem impossible on its face that owning the future replacement for public transport for like half the world wouldn't justify a high valuation.

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

#139

Post by LordHumungous » Thu, Jan 19, 2017, 7:37 PM UTC

metaphorm wrote: post #126

LordHumungous wrote: post #115

Earlier quoted context omitted.

>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 ...which is exactly what cabs are. In major cities cabs exist because it's cheaper and easier to hire a cab than to drive yourself. That cabs only really exist in densely populated urban areas should tell us something about the economics of this business model.

> That cabs only really exist in densely populated urban areas should tell us something about the economics of this business model. yes, it tells us that human cab drivers are prohibitively expensive. robot drivers don't need to paid by the hour though. the real disruption to your car isn't a ride-hailing app on your phone. it's robot driven cars. ride hailing apps are necessary piece of predecessor infrastructure fo…

In my opinion self driving cars are a shiny object to distract VC's from Uber's massive operating losses. When they start making money with self-driving cars on a large scale then I'll take notice.

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

#140

Post by Namrog84 » Thu, Jan 19, 2017, 7:39 PM UTC

rnernento wrote: post #64

onion2k wrote: post #60

Earlier quoted context omitted.

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…

How is it possible to get to profit with the subsidies?

The same way that free mobile games make most of their money from 1‰ of the 'whales'.

Nom mobile games. Let's say team fortress 2 or other games subsidized to make game free for all. When a small portion are buying crates and skins.

Uber could do same with black car. Delivery services. Etc.. And then offer discount /free for the (multiple independent ride share or other) to those that want to be cheaper.