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I still believe that Uber artificially creates a market by subsidizing a price point that is attractive to the drivers.
by jsemrau 10y ago
I still believe that Uber artificially creates a market by subsidizing a price point that is attractive to the drivers.
- Hydraulix989 10y agoDefinitely. Even as a consumer, I am able to order food from UberEats, and the total costs less than the cost of the food on the menu at the restaurant because of Uber's promotions.
- zaroth 10y agoKey word, promotions. CAC is a thing, so is CLTV. But negative gross margins are something different.
- Hydraulix989 10y agoWell, that was a rather condescending explanation of concepts of which my post didn't necessarily imply I didn't already know about.
- zaroth 10y agoIf their unit economics are positive than this is not true. If their unit economics are negative then it will be a spectacular show when the music stops. This is aside from promotional costs for the first few months when they enter a new market, as long as those costs actually decrease within the first year in a new market.
- corin_ 10y agoThat view doesn't look at the big picture - it's very possible that they are allowing for, and happy with, losing money to grow market share for many more years, maybe even until they can offer driverless rides to turn market share into profit.
- Frondo 10y agoWaiting for driverless cars to make them profitable seems like one of the worst bets you could make. Even if they were content to wait, say, 20 years, when driverless cars hit the market, what's to stop anyone from buying a small fleet of them and tossing their own uber-like app up on the store? Heck, I can even see it in the distant future, turnkey Uber-like businesses, you get your choice of franchise to buy into. You supply the cash for the cars, they supply you an app and a little branding. Saying "Uber's playing a long game by waiting for driverless cars and THEN..." just seems totally implausible.
- stale2002 10y agoIts not playing the long game. Its playing the short game. Self driving cars are going to be here for consumers by 2020. What protects Uber is the network effect. Even if I had a million self driving cars right now, nobody has my app installed, and I don't have an optimized pricing and logistics set up yet. And if you have your own fleet of self driving cars, why would you build the whole setup yourself? Why not just rent them to Uber?
- _delirium 10y ago> Self driving cars are going to be here for consumers by 2020. I doubt this is true, at least if you're talking about all-weather driving. Not even the optimistic researchers I've chatted with are that optimistic; this timeframe would require all-weather driving to be basically solid at the research level by 2018 or so, which is not totally impossible but unlikely. Maybe if it's limited to Uber Phoenix, though.
- stale2002 10y agoAll weather no. But a partial roll-out still makes Uber a lot of money. Self driving cars that work 90% of the day means Uber gets 90% of potential profits, and continues to use human drivers for the other 10% "surge" time period.
- 10y ago
- amelius 10y agoYes. Unfair competition.
- bigheadpercoli 10y agoWouldn't it be more than competition since the market would not exist in the first place?