4 ms·
In my opinion, yes, definitely yes, and probably not, or at least not automatically. The network effect alone is a huge barrier to entry. Second, the only obvi
by akamaka 11y ago
In my opinion, yes, definitely yes, and probably not, or at least not automatically.
The network effect alone is a huge barrier to entry. Second, the only obvious way to undercut Uber on prices would be by being bigger. There are significant fixed costs in software and analytics, and with Uber's profit margin being quite thin (compared to the fat economic rents imposed by the incumbents), it would be near suicidal to compete directly. Even if you could be twice as efficient as Uber, the price difference for the customer might be measured in pennies for each ride.
- merpnderp 11y agoYour posts have been very insightful. So I wonder if you think Uber will functionally have maximum utility for this market? It will be as efficient as possible without some major change in the business? And won't that be a great thing for people needing cheap rides to get around town, especially in places underserved by public transportation? This good quite probably outweighing the reduction loss of wages to taxi drivers. The way I envision it is the wages to the taxi drivers have been reallocated to provide dirt cheap transportation to the public at large, multiplying the utility of those wages. But I haven't seen the inside of an economics classroom since high school :)
- akamaka 11y agoThe part that excites me the most is the potential for reducing car ownership. The utlization rate for both cars and parking spaces is extremely low (something like 5% for cars and 15% for parking spaces), so it's not hard to imagine hundreds of billions of dollars in savings. As for low wages for the drivers, I think that won't be a problem that disappears on its own, but I'm strongly against solving social problems by trying to keep wages up artificially.