81–90 of 95 posts
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Its bubbled up to the New York Times. Otherwise, if fails my "mom test", so its still a niche service IMO.
A trillion dollar niche!
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This business is a natural monopoly, which is exactly what the VCs understand. There won't be competition, because whoever has the most customers can offer the best prices to customers, and the most earnings to drivers. The winner can suffocate the competition. It's basic game theory, if I run an operation that does 10,000 rides a day, and my competitor does 5000 rides per day, I can tweak prices and wait times such…
By that logic, all businesses with economies of scale are "natural monopolies". That's nonsense, because it assumes that everything else (particularly income per ride and cost per ride) are the same, or at least that they can be the same at a whim. And in practice, we see smaller companies competing successfully with larger ones all the time.
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We already have a ridesharing system which is much cheaper than car ownership and that system is called Public transport. I'm not entirely sure how Uber could turn into a system cheaper than London's tube or Delhi's metro. Plus, these systems are raising far bigger rounds than the $1.2 billion Uber just raised. Was Uber designed to be the cheapest form of transport? I doubt it. You have pure convenience on one end (c…
Ridesharing has the potential to be cheaper than car ownership while still being as fast and convenient -- or even more fast and convenient. The same can't be said for public transit, except for trips that happen to follow a major train line.
So I purchased a nice toyota for about $15,000 about 4 years back. 600 miles per month, 25 mpg, about $100 on gas every month, about $1200 every year. Assuming that I use this car for another year, I paid out $3000 for every year + $1200 on gas=$4200 /year (I'm sure my car will last far more than 5 years). Uber is about a dollar per mile. So every month I would have to pay $600, every year about $7200. You could try and hook me up with another person traveling the exact same route, but that is going to be a very uncertain thing even if you have the relevant technology. Even a small degree of uncertainty will lead me to buy a car.
Now if I used public transport, I would pay less than $1000/year. Plus, there wouldn't be much uncertainty. I think the world would be a much more efficient place if we tried to make the $1000 ride more convenient/efficient, than if we tried to bring down the cost of a $7200 ride (although I hope they can do it, would love to see how they do it).
I never said ride sharing is all doom and gloom, I'm just saying it will have a smaller space in terms of number of people traveling.
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By that logic, all businesses with economies of scale are "natural monopolies". That's nonsense, because it assumes that everything else (particularly income per ride and cost per ride) are the same, or at least that they can be the same at a whim. And in practice, we see smaller companies competing successfully with larger ones all the time.
Indeed, a lot of businesses with economies of scale and network effects can become monopolies. If we want to experience the benefits of free-market and competition, from a consumer point of view, we need to implement it through regulations. Peter Thiel explains it quite well, businesses want monopolies because they can reap a higher share of the value. Competition redistributes value to the customers. Once we recogni…
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By that logic, all businesses with economies of scale are "natural monopolies". That's nonsense, because it assumes that everything else (particularly income per ride and cost per ride) are the same, or at least that they can be the same at a whim. And in practice, we see smaller companies competing successfully with larger ones all the time.
Indeed, a lot of businesses with economies of scale and network effects can become monopolies. If we want to experience the benefits of free-market and competition, from a consumer point of view, we need to implement it through regulations. Peter Thiel explains it quite well, businesses want monopolies because they can reap a higher share of the value. Competition redistributes value to the customers. Once we recogni…
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Disagree with almost everything you've written. It's a winner-take-most/all, trillion plus dollar market. Investors getting in at $40b, besides having little downside due to preferences, will almost certainly make a reasonable return. Uber is already on track for $1b in revenue and continues to grow very rapidly. Governments have in fact shown no ability to stop Uber (only a very few instances in the entire world). P…
Uber is already on track for $1b in revenue * *gross revenue. Big difference.
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Disagree with almost everything you've written. It's a winner-take-most/all, trillion plus dollar market. Investors getting in at $40b, besides having little downside due to preferences, will almost certainly make a reasonable return. Uber is already on track for $1b in revenue and continues to grow very rapidly. Governments have in fact shown no ability to stop Uber (only a very few instances in the entire world). P…
I can't think of anything that would stop governments destroying Uber - is there anything? They've already started getting banned in various places, and it's not hard to write laws to enforce a taxi monopoly. They're doing well but I don't see anything that would stop government regulating them out of existence. They're no, say, Bitcoin in that regard for sure.
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A trillion dollar niche!
That trillion dollars is forward-looking, and not based on current revenue. It may well end up being a mainstream, household name before too long, but not yet.
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Presuming you can block your drivers from working for rival services simultaneuosly.
Hardly difficult. Once you have a monopoly position you just add a clause to the terms and conditions that you may only use Uber if it's the only service you're signed into at the time.
This figure might be wrong but the entire US taxi industry makes a revenue of $11 billion per year. Since US forms about 20% of the world's economy, we can assume the global taxi revenue to be $50 billion. Even if Uber takes in 20% from every ride, I can't imagine them possibly having more than $10 billion in revenue. Assuming Uber forms a 60% monopoly, they won't be making more than $6 billion in revenue. Kindly cor…
Consider the fact that just last year, Uber had more than $10 billion in transaction (keeping 20% of that as revenue)