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I hear that argument in favor of Uber a lot, but what barriers to entry exist for potential competitors when there are autonomous vehicles? Currently, you can

by ssharp 10y ago

I hear that argument in favor of Uber a lot, but what barriers to entry exist for potential competitors when there are autonomous vehicles? Currently, you can argue that Uber's competitive advantage and big barrier to entry is the driver network. When you don't need a pool of humans and software that makes the human's job easier, why would Uber be better suited than another company to utilize self-driving vehicles?

aetherson 10y ago
Also note that in this hypothetical world, Uber suddenly has to make gigantic capital investments in fleets of automobiles, whereas now they don't have that limiter on their growth. I find that a LOT of people go from "I envision a world in which rides-on-demand serves massively more rides" to "and thus Uber does very well as a for-profit company" with no steps in between. Since 1970, the number of passenger miles traveled by air in the US has grown about 6-fold [1]. And airlines have, as an entire industry, overall run a loss. There's a cautionary tale in there for Uber bulls. (BTW: Driverless cars don't necessarily mean that rides-on-demand becomes the dominant car transportation model, either, though it's certainly within the realm of the possible). [1] http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_40.html http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pub...
- fossuser 10y ago
  That's one model, but you could also have owners of autonomous cars allow Uber to use their car in the fleet. Basically you can pay people a lot less to be 'drivers' if they don't need to be driving.
  - aetherson 10y ago
    But then Uber has to share the profits with the owners of the cars. Also: if very large numbers of people are buying autonomous cars, then there's probably not a lot of increase in the rides-for-hire market.
smt88 10y ago
> why would Uber be better suited than another company to utilize self-driving vehicles? People used to say the same about Amazon. Amazon was leading a race to the bottom in terms of prices, and they were selling the same products as everyone else. Amazon succeeds today because they embraced their competitors and they're aggressively pro-consumer (even to the detriment of their own employees). They're also way ahead of the curve in terms of operational investments. For example, Target can't match the Prime service even if it tries. Is that exactly the model Uber will follow? I doubt it. My point is just that even in commoditized industries, there can be a dominant player.

by ssharp 10y ago

aetherson 10y ago

Also note that in this hypothetical world, Uber suddenly has to make gigantic capital investments in fleets of automobiles, whereas now they don't have that limiter on their growth. I find that a LOT of people go from "I envision a world in which rides-on-demand serves massively more rides" to "and thus Uber does very well as a for-profit company" with no steps in between. Since 1970, the number of passenger miles traveled by air in the US has grown about 6-fold [1]. And airlines have, as an entire industry, overall run a loss. There's a cautionary tale in there for Uber bulls. (BTW: Driverless cars don't necessarily mean that rides-on-demand becomes the dominant car transportation model, either, though it's certainly within the realm of the possible). [1] http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_40.html http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pub...

fossuser 10y ago
That's one model, but you could also have owners of autonomous cars allow Uber to use their car in the fleet. Basically you can pay people a lot less to be 'drivers' if they don't need to be driving.
- aetherson 10y ago
  But then Uber has to share the profits with the owners of the cars. Also: if very large numbers of people are buying autonomous cars, then there's probably not a lot of increase in the rides-for-hire market.

smt88 10y ago

> why would Uber be better suited than another company to utilize self-driving vehicles? People used to say the same about Amazon. Amazon was leading a race to the bottom in terms of prices, and they were selling the same products as everyone else. Amazon succeeds today because they embraced their competitors and they're aggressively pro-consumer (even to the detriment of their own employees). They're also way ahead of the curve in terms of operational investments. For example, Target can't match the Prime service even if it tries. Is that exactly the model Uber will follow? I doubt it. My point is just that even in commoditized industries, there can be a dominant player.