10 ms·

Uber will be a dead Unicorn in the medium future. They've got too many legal pressures, competitors with native advantages (i.e. the automakers), and their expa

by animex 10y ago

Uber will be a dead Unicorn in the medium future. They've got too many legal pressures, competitors with native advantages (i.e. the automakers), and their expansion plans have them overextended. Here in Edmonton, AB, Canada, regulatory changes have pushed the Uber prices to almost 2x during non-surge times over regular taxis. Taxi's have stepped up. Local competitors have sprouted. Carshares are abounding. It's all too much for them to compete effectively and the drivers are realizing they are making nothing. The driver pool has significantly dwindled here. The Uber model has no barrier to entry and they've lost their first-to-market advantage. Doesn't paint a pretty picture.

paulddraper 10y ago
They still have the momentum. This isn't a start up trying to figure out how to make money (Twitter) or a company that can't/won't change (Blackberry). This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.
- danielpatrick 10y ago
  The question is whether they will just be able to sit back and take in the billions one day. I have always looked forward to self-driving car networks because of what I perceived to be their ultra-competitive and ultra-low margin nature. Then two years ago everyone started talking about an Uber monopoly and I got super upset. Are we seriously seeing another industry ultra centralize due to technology? But I'm beginning to suspect that this may be a massive miscalculation on the part of Uber and its investors. Maybe it is a low margin, highly competitive industry and Uber will be remembered as that one company that subsidized everybody's rides for a few years until it just faded into the background.
  - paulddraper 10y ago
    > I have always looked forward to self-driving car networks As great as that would be, those are still a decade away from common use, probably much more.
- JonFish85 10y ago
  > They can sit back any day and rake in billions I don't know if this is accurate. They're fending off lawsuits pushing them to recognize their drivers as employees, their prices are artificially low (in the sense that it's subsidized by VC money), and they're racing both cab companies and car companies at once (if Tesla/GM/Ford gets autonomous cars first, who needs Uber?). At a ~$70B valuation, they have no margin for error. Their only realistic positive option at this point is to IPO. Right now, they're valued higher than Ford ($50B), GM ($55B) and Tesla ($33B), and currently Uber is reliant upon them (and others) to manufacture the cars they rent to people; if they are beaten to autonomous cars, they have no reason to exist. This is why I think Uber is in a tough spot; they've raised a ton of money at an enormous valuation, and have to somehow convince the public markets that they're worth it. Whether they can do it, who knows? I've been wrong on these things before (Zynga and KING seemed like obvious flops, but the public bought into them).
- kmonsen 10y ago
  The thing is once they stop subsidizing the rides, will people stop using them?
  - user5994461 10y ago
    Yes. It's too practical to stop using it. Plus, many places don't have a viable alternatives to Uber/Lyft.
- lsc 10y ago
  >This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage. The problem here is that ridership at current prices is rather higher than ridership at 2x current prices... and 2x current prices only brings you up to break-even. you want to bring that up to the point where Uber is making billions? ridership is going to fall off a cliff. I use uber a lot mostly because it's really cheap; For five bucks? yeah, for five bucks, I'll have someone drive me to work. if that goes to $10 or $20? Yeah, I'll still use it when I go to the bar or when my car is broken or something, but for that kinda scratch I'm probably taking a shuttle, driving myself, or using a bicycle to go to work. The point here is that Uber's competition isn't really lyft or the cab companies, it's the car I have sitting in my own driveway.
- rimantas 10y ago
  In my rather small city (~600k) there are already like 5 different uber-like options. And at least three of them were before the uber came. Dislcaimer: I've never used uber and I hope I never will. I dislike them as a company and that dislike grows over time.
  - paulddraper 10y ago
    Not that it matters, but 600k is not a small city, at least by US standards. Only four of 50 state capitals (Austin, Columbus, Indianapolis, Phoenix) have a population that large.
cstejerean 10y ago
What I love about Uber is that I can use the same service pretty much everywhere I travel. I don't see them dying anytime soon. They have huge mind share at the moment and are better funded than any competitor. At a minimum Uber can pivot into being a front-end for these other players, providing a unified booking and payment experience.
- deleted 10y ago
  [deleted]
TheSageMage 10y ago
... and that exactly what the Taxi industry should do, step up. Not just in price, but in technology. IMO the best feature of Uber is the app and transparency like features of taking a trip. If I can pull the app up, input where I am and where I want to go, how much it will cost, and when my driver will be here, I'm happy. The few experiences I've had with local Taxi systems, coming from a everyone-drives-a-car suburban background, have been awful. Overcharging, credit card machine breakdown, and unreliability of driver arrival estimation have made me seek out more expensive alternatives, just to avoid the hassle. I now live in a city where I take public transport 90% of the time. But that 10% has been made so much easier by Uber and Lyft(they offer the "same" features, so they are the same in my book). They tell me; How long until the driver is here(often incorrect, but only by a small factor), how long the trip will take(often incorrect, by only by a small factor), and how much it will cost(often correct or guaranteed). None of the features above sound unique to Uber/Lyft, the only difference between them and Taxi's are subsidization by Capitalization. I've heard of Flywheel offering the same app features Uber/Lyft do, but Uber's are often under ~$10 where I am, which a Taxi can take anywhere from $25-$45. But if Uber's subsidization goes dry, as long as there's an feature-like alternative, I'd still pay for that.
- henrikschroder 10y ago
  Some have already done it, Taxi Stockholm has a very nice app; enter pickup and destination, book it, track it, pay through it, etc. And they're marketing themselves by stressing all the things they provide that Uber doesn't. You get a licensed, properly insured taxi driver in a nice car.
  - mjevans 10y ago
    One advantage Uber has over the app you mention is that it's in many (most) cities. You only need /one/ app and one place to go to get fulfillment. The network effect is not insubstantial.
    - toomuchtodo 10y ago
      How terrible. Having to spend 1-2 minutes downloading an app. Expect Austin to occur elsewhere (Uber and Lyft leaving due to local regulation, and competitors filling the void).
nimchimpsky 10y ago
conversely uber is much cheaper in uk and sydney, compared to taxis. Much more convenient, and no competitors.
- ntlk 10y ago
  There are competitors in the UK, Addison Lee and Hailo to just mention two. Plus some taxi companies make their own apps.
  - antihero 10y ago
    Hailo is still metered fares IIRC. Gett, however gets you a Black Cab quote, I think.
  - nimchimpsky 10y ago
    There are no competitors in australia (that I'm aware of). And in the UK the competitors must be much smaller, everyone I knew there always used uber.
zouhair 10y ago
As much as I hated and still hate the Uber tactics and way of business, I have to give to them, they managed to shake things up and force taxi companies to get on with the times or suffer hard ones. All in all it will be good for consumers and workers as long as Uber is forced to pay its dues where it wants to do business.
- XJOKOLAT 10y ago
  Agreed. I took a local company cab recently and was really impressed and I was wondering if that would have been the story had the market not changed. Have still never taken an Uber and don't feel the need to.
letterthief 10y ago
> The Uber model has no barrier to entry If uber has no barrier to entry, neither does facebook.
- czep 10y ago
  I think that says more about Facebook than it does about Uber. Not to derail the conversation but it's entirely possible that FB will be gone in ten years. They already have a demographic problem: far lower penetration among younger cohorts than in years past. And engagement metrics among new younger users show that they are using FB differently than older cohorts. Thus, I think one could easily argue that FB could be supplanted very quickly by a new service that offers many of its features but is more attuned to the use cases of the younger generation. In Uber's case, the situation is much different because their only appeal (low fares) is unsustainable.
  - obstinate 10y ago
    People have been gabbing about Facebook's demographic problems almost since Facebook debuted public access. Not that you couldn't be right, but people are going to keep making this statement until someday it becomes true, then congratulate themselves that they're great prognosticators.
- automatwon 10y ago
  Facebook has network effects. I use it because my friends use it. I don't care if my friends use Uber, if a different Taxi company offers me the same service for cheaper.
  - letterthief 10y ago
    So you start a competitor to uber, where are all of your drivers?
  - MarkMc 10y ago
    Uber has network effects too. Facebook has friends, Uber has drivers. You certainly care how many drivers the Taxi company has because it affects the time you have to wait to be picked up.
tn13 10y ago
I am happy if Uber dies as long as that death comes because of other competitors doing a better job of helping us travel, faster cheaper and by making lesser impact on climate. It will however be horrible if Uber dies because of government's protectionist (Trump like) regime trying to protect inefficient taxies. Uber has helped us bring more fuel efficient vehicles as rides, helped us pool rides etc. making travel cheaper yet causing less pollution.
michaelbuckbee 10y ago
I think this is like arguing that Amazon would never be worth a Billion dollars because there aren't enough book buyers. If we were talking about Uber's current model then you're 100% correct. But if we look at all to where they're going there's tremendous potential. They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore? I'm skeptical of the notion that the big auto manufacturers (who had a conniption fit at the mere notion of Tesla selling cars direct, instead of through a dealership) nimbly setting up autonomous, on demand fleets of vehicles which destroy their dealership network and also cost them half of their revenue. Yes, they are losing money, but they're playing a very different game than the local taxi company.
- PinguTS 10y ago
  You are missing some points: > They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. Otto until now is not a truck company. They are not producing any truck. They are just retrofitting their technology in existing trucks. It is like what Google does and what I told everybody and laughed at me. Google had and has no interest in building cars. They have a very bad track record in building hardware for consumers. That said, Google is a software company. Google wants to sell their Software knowhow to the car industry. The very same seems to be true for Otto. Otto is just a technology company that does retrofitting. But all the truck manufacturers are building their technology directly into the trucks. Remember, that Freightliner and other Brands are a Daimler company. Daimler has self-driving technology for their cars and are integrating them into the trucks. The future for Otto would be a partnership with at least one big truck manufacturer, which is not in sight. Otto will become obsolete, when it does not get such a partnership. So for Uber that is a high risk investment. > They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore? You forget, that in the case of self-driving cars, then Uber has to buy (or lease) those cars. Today, they pay the drivers only for the work done, while the driver has to pay for the car and the service. So the risk and costs are distributed to the drivers. But with self-driving cars these costs are becoming Uber's costs. But Uber has until know no knowledge on handling own property. What about Car2Go, Zipcar, and alike? They can easily exchange their existing car fleets. They have knowledge and experiences on handle car fleets. Think about that.
aaroninsf 10y ago
I've got $5 that says their death will result from the first human one(s) at the hands of their self-driving cars. Comparisons to Icarus will be legion among former admirers.
DannyBee 10y ago
This all seems to assume their long term plan has anything to do with providing car service for people, which seems ... strange. Uber really wants to be a logistics company.
puranjay 10y ago
As I was reading this, I just got a text message from Uber promoting a new offer - Just Rs. 100 for any trip of 15km or less between 12pm to 4pm. Rs. 100 works out to under $1.5. Or effectively, $0.10/km if you take a 15km trip. How the hell is that ever going to be profitable?
- msane 10y ago
  It's introducing people to the service and acquiring market. Better prices come later.
  - dagw 10y ago
    But will people continue to use Uber when the price goes up to market levels. Anecdotally, when Uber entered the market where I live they offered steep discounts and everybody I knew started to use them. Today they cost basically the same as most taxis and I don't know anybody who still primarily uses Uber.
  - varjag 10y ago
    Sounds like Groupon all over again.
  - forgetsusername 10y ago
    >It's introducing people to the service and acquiring market. Better prices come later. You say this as if 75% of the reason people take Uber isn't price, and that one day Uber will simply be able to jack up all their prices and make money. Demand doesn't work that way.
    - msane 10y ago
      Demand does work that way. Why does a drug dealer give free samples at first? ... Creating demand. What they will not have for long though is a monopoly on supply in India.
    - deleted 10y ago
      [deleted]
mrweasel 10y ago
I think Uber is learning that there aren't actually that much money to be made by driving people around. Regardless to the taxi business being heavily control be special interests groups and taxi lobby, medalion systems and what-not, taxi drivers aren't exactly millionaires. I believe that Uber miscalculated the total sum of money in the "taxi-ride"-pool.
kriro 10y ago
"""The Uber model has no barrier to entry""" I don't know how many potential competitors are willing to blatantly ignore existing laws (I guess this is the mythical ethics barrier). Ability to raise money given there's Uber (and Lyft etc.) is also a strong barrier since the model only works with massive VC money to keep cost artificially low. Brand recognition is another one. At the end of the day Uber seems to prefer the classical (as in 5 forces) cost leadership strategy, currently powered by VC funding. Which means long term the play has to be autonomous vehicles. Since the chain of operations requires vehicles in some way I agree with the many posters in this thread who have said their real competition will be the Teslas of the world. Which would worry me a great deal as an investor. I think they should push to IPO quickly while joe doe still thinks yeah Uber sure I use them every now and then take my moneyz (if that's ethical...I won't judge).
ivan_gammel 10y ago
In Russia Uber will definitely die from the competition. Not only many Taxi companies have good apps today and offer better services (and licensed cars allowed to use bus lanes), but there are strong competitors with similar business model (Yandex, Gett, Maxim etc etc), which are better represented in regions. The only good thing it has done, it helped to lower prices in Moscow, but I'm not sure if it's really a good thing - you must be very desperate to become Uber driver here today.
sah2ed 10y ago
> The Uber model has no barrier to entry and they've lost their first-to-market advantage. Doesn't paint a pretty picture. Agree. Steve Blank argues that the first-mover or second-mover strategy has never worked [1]. Uber is a second mover, Lyft was first. [1] https://shift.newco.co/why-startup-pioneers-have-arrows-in-their-backs-cf5fc42a8454 https://shift.newco.co/why-startup-pioneers-have-arrows-in-t...
michaelmachine 10y ago
I agree that Uber has resulted in more competition from local competitors which is great, but this information about Uber pricing is not correct. Uber prices have gone down overall since the regulatory changes were made to allow Uber and other "ride shares" in Edmonton and put in place insurance requirements. The base cost per trip has gone up but the per distance and per time cost has gone down. Before the regulatory change my trip home from work averaged ~ $10. Example: Base fare: $2.75, Distance: $3.56, Time: $2.32, Safe ride fee: $1.00, Total: $9.63 After the change my trips average the same. Example: Base fair: $2.25, distance $3.46, time: $1.58, booking fee: $2.15, per trip fee (for insurance): $0.06. The total base cost before was $3.75 and after is $4.46, but the per minute and per km costs have gone down. So very short trips cost more than before, but long trips cost less than before. The regulatory change resulted in a cost of $0.06 per trip for insurance.

by animex 10y ago

paulddraper 10y ago

They still have the momentum. This isn't a start up trying to figure out how to make money (Twitter) or a company that can't/won't change (Blackberry). This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.

danielpatrick 10y ago
The question is whether they will just be able to sit back and take in the billions one day. I have always looked forward to self-driving car networks because of what I perceived to be their ultra-competitive and ultra-low margin nature. Then two years ago everyone started talking about an Uber monopoly and I got super upset. Are we seriously seeing another industry ultra centralize due to technology? But I'm beginning to suspect that this may be a massive miscalculation on the part of Uber and its investors. Maybe it is a low margin, highly competitive industry and Uber will be remembered as that one company that subsidized everybody's rides for a few years until it just faded into the background.
- paulddraper 10y ago
  > I have always looked forward to self-driving car networks As great as that would be, those are still a decade away from common use, probably much more.
JonFish85 10y ago
> They can sit back any day and rake in billions I don't know if this is accurate. They're fending off lawsuits pushing them to recognize their drivers as employees, their prices are artificially low (in the sense that it's subsidized by VC money), and they're racing both cab companies and car companies at once (if Tesla/GM/Ford gets autonomous cars first, who needs Uber?). At a ~$70B valuation, they have no margin for error. Their only realistic positive option at this point is to IPO. Right now, they're valued higher than Ford ($50B), GM ($55B) and Tesla ($33B), and currently Uber is reliant upon them (and others) to manufacture the cars they rent to people; if they are beaten to autonomous cars, they have no reason to exist. This is why I think Uber is in a tough spot; they've raised a ton of money at an enormous valuation, and have to somehow convince the public markets that they're worth it. Whether they can do it, who knows? I've been wrong on these things before (Zynga and KING seemed like obvious flops, but the public bought into them).
kmonsen 10y ago
The thing is once they stop subsidizing the rides, will people stop using them?
- user5994461 10y ago
  Yes. It's too practical to stop using it. Plus, many places don't have a viable alternatives to Uber/Lyft.
lsc 10y ago
>This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage. The problem here is that ridership at current prices is rather higher than ridership at 2x current prices... and 2x current prices only brings you up to break-even. you want to bring that up to the point where Uber is making billions? ridership is going to fall off a cliff. I use uber a lot mostly because it's really cheap; For five bucks? yeah, for five bucks, I'll have someone drive me to work. if that goes to $10 or $20? Yeah, I'll still use it when I go to the bar or when my car is broken or something, but for that kinda scratch I'm probably taking a shuttle, driving myself, or using a bicycle to go to work. The point here is that Uber's competition isn't really lyft or the cab companies, it's the car I have sitting in my own driveway.
rimantas 10y ago
In my rather small city (~600k) there are already like 5 different uber-like options. And at least three of them were before the uber came. Dislcaimer: I've never used uber and I hope I never will. I dislike them as a company and that dislike grows over time.
- paulddraper 10y ago
  Not that it matters, but 600k is not a small city, at least by US standards. Only four of 50 state capitals (Austin, Columbus, Indianapolis, Phoenix) have a population that large.

cstejerean 10y ago

What I love about Uber is that I can use the same service pretty much everywhere I travel. I don't see them dying anytime soon. They have huge mind share at the moment and are better funded than any competitor. At a minimum Uber can pivot into being a front-end for these other players, providing a unified booking and payment experience.

deleted 10y ago
[deleted]

TheSageMage 10y ago

... and that exactly what the Taxi industry should do, step up. Not just in price, but in technology. IMO the best feature of Uber is the app and transparency like features of taking a trip. If I can pull the app up, input where I am and where I want to go, how much it will cost, and when my driver will be here, I'm happy. The few experiences I've had with local Taxi systems, coming from a everyone-drives-a-car suburban background, have been awful. Overcharging, credit card machine breakdown, and unreliability of driver arrival estimation have made me seek out more expensive alternatives, just to avoid the hassle. I now live in a city where I take public transport 90% of the time. But that 10% has been made so much easier by Uber and Lyft(they offer the "same" features, so they are the same in my book). They tell me; How long until the driver is here(often incorrect, but only by a small factor), how long the trip will take(often incorrect, by only by a small factor), and how much it will cost(often correct or guaranteed). None of the features above sound unique to Uber/Lyft, the only difference between them and Taxi's are subsidization by Capitalization. I've heard of Flywheel offering the same app features Uber/Lyft do, but Uber's are often under ~$10 where I am, which a Taxi can take anywhere from $25-$45. But if Uber's subsidization goes dry, as long as there's an feature-like alternative, I'd still pay for that.

henrikschroder 10y ago
Some have already done it, Taxi Stockholm has a very nice app; enter pickup and destination, book it, track it, pay through it, etc. And they're marketing themselves by stressing all the things they provide that Uber doesn't. You get a licensed, properly insured taxi driver in a nice car.
- mjevans 10y ago
  One advantage Uber has over the app you mention is that it's in many (most) cities. You only need /one/ app and one place to go to get fulfillment. The network effect is not insubstantial.
  - toomuchtodo 10y ago
    How terrible. Having to spend 1-2 minutes downloading an app. Expect Austin to occur elsewhere (Uber and Lyft leaving due to local regulation, and competitors filling the void).

nimchimpsky 10y ago

conversely uber is much cheaper in uk and sydney, compared to taxis. Much more convenient, and no competitors.

ntlk 10y ago
There are competitors in the UK, Addison Lee and Hailo to just mention two. Plus some taxi companies make their own apps.
- antihero 10y ago
  Hailo is still metered fares IIRC. Gett, however gets you a Black Cab quote, I think.
- nimchimpsky 10y ago
  There are no competitors in australia (that I'm aware of). And in the UK the competitors must be much smaller, everyone I knew there always used uber.

zouhair 10y ago

As much as I hated and still hate the Uber tactics and way of business, I have to give to them, they managed to shake things up and force taxi companies to get on with the times or suffer hard ones. All in all it will be good for consumers and workers as long as Uber is forced to pay its dues where it wants to do business.

XJOKOLAT 10y ago
Agreed. I took a local company cab recently and was really impressed and I was wondering if that would have been the story had the market not changed. Have still never taken an Uber and don't feel the need to.

letterthief 10y ago

> The Uber model has no barrier to entry If uber has no barrier to entry, neither does facebook.

czep 10y ago
I think that says more about Facebook than it does about Uber. Not to derail the conversation but it's entirely possible that FB will be gone in ten years. They already have a demographic problem: far lower penetration among younger cohorts than in years past. And engagement metrics among new younger users show that they are using FB differently than older cohorts. Thus, I think one could easily argue that FB could be supplanted very quickly by a new service that offers many of its features but is more attuned to the use cases of the younger generation. In Uber's case, the situation is much different because their only appeal (low fares) is unsustainable.
- obstinate 10y ago
  People have been gabbing about Facebook's demographic problems almost since Facebook debuted public access. Not that you couldn't be right, but people are going to keep making this statement until someday it becomes true, then congratulate themselves that they're great prognosticators.
automatwon 10y ago
Facebook has network effects. I use it because my friends use it. I don't care if my friends use Uber, if a different Taxi company offers me the same service for cheaper.
- letterthief 10y ago
  So you start a competitor to uber, where are all of your drivers?
- MarkMc 10y ago
  Uber has network effects too. Facebook has friends, Uber has drivers. You certainly care how many drivers the Taxi company has because it affects the time you have to wait to be picked up.

tn13 10y ago

I am happy if Uber dies as long as that death comes because of other competitors doing a better job of helping us travel, faster cheaper and by making lesser impact on climate. It will however be horrible if Uber dies because of government's protectionist (Trump like) regime trying to protect inefficient taxies. Uber has helped us bring more fuel efficient vehicles as rides, helped us pool rides etc. making travel cheaper yet causing less pollution.

michaelbuckbee 10y ago

I think this is like arguing that Amazon would never be worth a Billion dollars because there aren't enough book buyers. If we were talking about Uber's current model then you're 100% correct. But if we look at all to where they're going there's tremendous potential. They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore? I'm skeptical of the notion that the big auto manufacturers (who had a conniption fit at the mere notion of Tesla selling cars direct, instead of through a dealership) nimbly setting up autonomous, on demand fleets of vehicles which destroy their dealership network and also cost them half of their revenue. Yes, they are losing money, but they're playing a very different game than the local taxi company.

PinguTS 10y ago
You are missing some points: > They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. Otto until now is not a truck company. They are not producing any truck. They are just retrofitting their technology in existing trucks. It is like what Google does and what I told everybody and laughed at me. Google had and has no interest in building cars. They have a very bad track record in building hardware for consumers. That said, Google is a software company. Google wants to sell their Software knowhow to the car industry. The very same seems to be true for Otto. Otto is just a technology company that does retrofitting. But all the truck manufacturers are building their technology directly into the trucks. Remember, that Freightliner and other Brands are a Daimler company. Daimler has self-driving technology for their cars and are integrating them into the trucks. The future for Otto would be a partnership with at least one big truck manufacturer, which is not in sight. Otto will become obsolete, when it does not get such a partnership. So for Uber that is a high risk investment. > They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore? You forget, that in the case of self-driving cars, then Uber has to buy (or lease) those cars. Today, they pay the drivers only for the work done, while the driver has to pay for the car and the service. So the risk and costs are distributed to the drivers. But with self-driving cars these costs are becoming Uber's costs. But Uber has until know no knowledge on handling own property. What about Car2Go, Zipcar, and alike? They can easily exchange their existing car fleets. They have knowledge and experiences on handle car fleets. Think about that.

aaroninsf 10y ago

I've got $5 that says their death will result from the first human one(s) at the hands of their self-driving cars. Comparisons to Icarus will be legion among former admirers.

DannyBee 10y ago

This all seems to assume their long term plan has anything to do with providing car service for people, which seems ... strange. Uber really wants to be a logistics company.

puranjay 10y ago

As I was reading this, I just got a text message from Uber promoting a new offer - Just Rs. 100 for any trip of 15km or less between 12pm to 4pm. Rs. 100 works out to under $1.5. Or effectively, $0.10/km if you take a 15km trip. How the hell is that ever going to be profitable?

msane 10y ago
It's introducing people to the service and acquiring market. Better prices come later.
- dagw 10y ago
  But will people continue to use Uber when the price goes up to market levels. Anecdotally, when Uber entered the market where I live they offered steep discounts and everybody I knew started to use them. Today they cost basically the same as most taxis and I don't know anybody who still primarily uses Uber.
- varjag 10y ago
  Sounds like Groupon all over again.
- forgetsusername 10y ago
  >It's introducing people to the service and acquiring market. Better prices come later. You say this as if 75% of the reason people take Uber isn't price, and that one day Uber will simply be able to jack up all their prices and make money. Demand doesn't work that way.
  - msane 10y ago
    Demand does work that way. Why does a drug dealer give free samples at first? ... Creating demand. What they will not have for long though is a monopoly on supply in India.
  - deleted 10y ago
    [deleted]

mrweasel 10y ago

I think Uber is learning that there aren't actually that much money to be made by driving people around. Regardless to the taxi business being heavily control be special interests groups and taxi lobby, medalion systems and what-not, taxi drivers aren't exactly millionaires. I believe that Uber miscalculated the total sum of money in the "taxi-ride"-pool.

kriro 10y ago

"""The Uber model has no barrier to entry""" I don't know how many potential competitors are willing to blatantly ignore existing laws (I guess this is the mythical ethics barrier). Ability to raise money given there's Uber (and Lyft etc.) is also a strong barrier since the model only works with massive VC money to keep cost artificially low. Brand recognition is another one. At the end of the day Uber seems to prefer the classical (as in 5 forces) cost leadership strategy, currently powered by VC funding. Which means long term the play has to be autonomous vehicles. Since the chain of operations requires vehicles in some way I agree with the many posters in this thread who have said their real competition will be the Teslas of the world. Which would worry me a great deal as an investor. I think they should push to IPO quickly while joe doe still thinks yeah Uber sure I use them every now and then take my moneyz (if that's ethical...I won't judge).

ivan_gammel 10y ago

In Russia Uber will definitely die from the competition. Not only many Taxi companies have good apps today and offer better services (and licensed cars allowed to use bus lanes), but there are strong competitors with similar business model (Yandex, Gett, Maxim etc etc), which are better represented in regions. The only good thing it has done, it helped to lower prices in Moscow, but I'm not sure if it's really a good thing - you must be very desperate to become Uber driver here today.

sah2ed 10y ago

> The Uber model has no barrier to entry and they've lost their first-to-market advantage. Doesn't paint a pretty picture. Agree. Steve Blank argues that the first-mover or second-mover strategy has never worked [1]. Uber is a second mover, Lyft was first. [1] https://shift.newco.co/why-startup-pioneers-have-arrows-in-their-backs-cf5fc42a8454 https://shift.newco.co/why-startup-pioneers-have-arrows-in-t...

michaelmachine 10y ago

I agree that Uber has resulted in more competition from local competitors which is great, but this information about Uber pricing is not correct. Uber prices have gone down overall since the regulatory changes were made to allow Uber and other "ride shares" in Edmonton and put in place insurance requirements. The base cost per trip has gone up but the per distance and per time cost has gone down. Before the regulatory change my trip home from work averaged ~ $10. Example: Base fare: $2.75, Distance: $3.56, Time: $2.32, Safe ride fee: $1.00, Total: $9.63 After the change my trips average the same. Example: Base fair: $2.25, distance $3.46, time: $1.58, booking fee: $2.15, per trip fee (for insurance): $0.06. The total base cost before was $3.75 and after is $4.46, but the per minute and per km costs have gone down. So very short trips cost more than before, but long trips cost less than before. The regulatory change resulted in a cost of $0.06 per trip for insurance.