Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why I don't believe in Uber's Success

blog.benjamin-encz.de

Post reply on HN
Print view View original

151–160 of 413 posts

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

#151

Post by diminoten »

falloutx wrote: post #25

In 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…

Investors, early stage in particular, are optimizing for exits, not profitability. I know that's not what's on their mind when they're advising (I assume the best of intentions), and they do provide the best of what they have, but if that's what gets rewarded, that's what'll get optimized for, and there's nothing the "Good ones" can do about it if they want to be/remain successful.

Very few people other than those pesky customers, seem to care if a business is actually making money on its own these days.

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

#152

Post by metaphorm »

LordHumungous wrote: post #139
metaphorm wrote: post #126

Earlier quoted context omitted.

> 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.

wait 5-10 years? there aren't any self-driving cars in commercial use right now. VC investors often have long term timelines (depends on the fund and it's objectives). It's not exactly a distraction tactic to say "our timeline projects out for a decade and we expect to be operating in the red until the technology and politics aligns and comes to fruition, at which point we make infinite money forever."

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

#153

Post by frankc »

rm_-rf_slash wrote: post #147
notahacker wrote: post #117

Earlier quoted context omitted.

I can believe that's their goal: I see little reason to believe they'll succeed in it, beyond making the market a bit bigger than the current taxi/minicab market. Just because they're very good at supplying an unlicensed minicab service (apparently subsidised by VC money in many areas) doesn't mean they can (i) run a minicab business at a profit so much more efficiently than every other minicab business in history th…

Can't say I speak for everyone but I mostly walk to get to places and drive when I have to. I live close enough to an ALDI to get most of my groceries by walking and I can walk to work too. Owning a car means always needing a parking space, going out to get gas, paying for insurance, inspections, etc, having to be capable of driving (because when I'm sauced on a Saturday night I really want to get greasy food, but I…

The thing is that this is really only true for people in dense urban environments. For instance, parking is not an issue in suburbia. There are use cases, like getting from your home to the train station, but it's not nearly as universal as it is for people who can currently get by with no car at all.

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

#154

Post by ahuja_s »

mcguire wrote: post #83
vadym909 wrote: post #62

Earlier quoted context omitted.

So then Amazon is not a success either?

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

It's customers are fucking g happy. What's the end game you're talking about? Have you invested into them? As a customer I LOVE them. As a student, I studied them in HBX.

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

#155

Post by midnitewarrior »

The author forgot another significant problem Uber faces.

When self driving fleets can be deployed for ride sharing, a new startup, one without the hundred of millions / billions in losses that Uber will have accumulated, will come on the scene.

How can Uber, a company with massive losses to recover from, compete with a new, nimble and well-funded startup that doesn't have those legacy losses weighing down their ability to raise capital and pay back investors?

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

#156

Post by xux »

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…

Airline is a classic case of an industry that has too much competition. All these airlines cause inefficient routing, and they're continuously forced to cut prices to compete. This results in bad margins and bad service. Literally no body wins.

Uber / Lyft could be profitable as duopolies though. As in the case of Pepsi and Coke, both can happily carve out their niche and don't rock the boat too much.

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

#157

Post by sfifs »

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…

Warren Buffett's famous lesson is that in a competitive commodity business, any cost savings will get passed on to the consumer and investing in such a business is value destroying in the long term.

Monopolization doesn't seem to be happening really in the business Uber is competing in and it seems as likely that any of the half a dozen other players in self driving car business will succeed as Uber.

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

#158

Post by notahacker »

rm_-rf_slash wrote: post #147
notahacker wrote: post #117

Earlier quoted context omitted.

I can believe that's their goal: I see little reason to believe they'll succeed in it, beyond making the market a bit bigger than the current taxi/minicab market. Just because they're very good at supplying an unlicensed minicab service (apparently subsidised by VC money in many areas) doesn't mean they can (i) run a minicab business at a profit so much more efficiently than every other minicab business in history th…

Can't say I speak for everyone but I mostly walk to get to places and drive when I have to. I live close enough to an ALDI to get most of my groceries by walking and I can walk to work too. Owning a car means always needing a parking space, going out to get gas, paying for insurance, inspections, etc, having to be capable of driving (because when I'm sauced on a Saturday night I really want to get greasy food, but I…

New cars and executive cars and ludicrously thirsty sporty models sell well enough and secondhand Korean superminis badly enough to suggest manufacturers don't have too much to fear from people switching to alternative modes of car use on the ground of price. (I'm sure you could find a cheaper-to-run vehicle if you really wanted to too)

And for commuters that need a car to get them to work at 8-9am and home around 5-6pm, the chance of a car sharing scheme working out cheaper than ownership is minimal, whether the cars drive themselves or not.

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

#159

Post by petra »

abalone wrote: post #138

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.

This dismisal of UberPool is something we from many people who discuss Uber's business. I wonder why.

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

#160

Post by _Codemonkeyism »

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.

Since Amazon seems to have shifted to generate profit instead of subsidizing prices, it went downhill (at least in Berlin). Amazon Logistics is a huge pain (several lost packages, Saturday and 8pm delivery to business) and the prices of most goods at Amazon is mediocre.

As a very good and Amazon customer for a very long time, I've reached the point to jump to something else should it materialize.

Post reply on HN