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There are significant differences between Uber and FB. Two very important ones: 1) Moat - barriers for entry in the ride-"sharing" space are low. See Austin fo
by ithinkinstereo 10y ago
There are significant differences between Uber and FB. Two very important ones:
1) Moat - barriers for entry in the ride-"sharing" space are low. See Austin for example.
2) Economies of scale - the costs for FB to add each incremental user got increasingly cheaper due to cost savings at scale. Not so much for Uber.
- beambot 10y ago1) People said the same about FB wrt Myspace. 2) Even if Uber's CAC doesn't decrease, it could have a vastly-higher CLV to justify the crazy spending to capture market share now. It's a calculated strategic decision -- and it's impossible to say if it's "wrong"; only time will tell.
- ithinkinstereo 10y ago2) CLV depends on customer loyalty. In the case of the ride-sharing market, this ultimately comes down to the cost of service. Plus remember that Uber has to satisfy both sides of the coin here: drivers + riders. AND they have to be profitable. Tall order here.