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Amazon had a structural advantage built into their more efficient online operations vs. a traditional brick and mortar store. Regarding your point about probab

Amazon had a structural advantage built into their more efficient online operations vs. a traditional brick and mortar store. Regarding your point about probability of creating a monopoly: "Brishen Rogers, an associate professor at Temple University’s Beasley School of Law who has studied Uber’s effects on the taxi market, said traditional cab companies are clearly threatened by newer competitors, and he expects many more will go out of business as a result. [Many] lenders, including Citibank, expressed concerns about the effects that “nontraditional ride-sharing companies” would have on the city’s traditional medallion-based business model. " http://www.wsj.com/articles/san-franciscos-biggest-taxi-operator-seeks-bankruptcy-protection-1453677177 http://www.wsj.com/articles/san-franciscos-biggest-taxi-oper...

dx034 10y ago
Traditional taxis are threatened by new competitors, but the plural here is important. It's not just Uber, it's Uber, Lyft, and all the others that can come up. Here in London we already have a large number of minicab companies. Uber is very successful because they're cheapest. But as soon as they'd raise prices someone else will take the crown. Developing a basic app for taxis (calling a cab, paying, ETA) will probably not cost more than a few millions. Getting people to drive for you (in addition to other companies) is also very easy at the moment. That makes barriers to entry extremely low in the market. It's not an Amazon with huge warehouses and not a Google with a highly sophisticated search algorithm. Uber just competes by price, they have no real technical advantage here.
SamPhillips 10y ago
The lack of medallion rent-seeking could be Uber's structural advantage against taxis. The framing I see sometimes of Big Mean Uber vs 'poor little guy cab driver' seems wholly out of touch with my experience. At least in Boston the taxi system is/was rife with corruption and cronyism. Neither riders or drivers get a good deal, just medallion owners and the regulators they captured[0]. The money isn't staying in the 'local economy', to 'small business owners', it is, by and large, going to rent-seeking medallion owners, many of whom live out of state to monopoly holders who use that power to prevent competition through regulation. I'd happily pay the same to take an Uber driven by someone who wasn't being exploited and who was accountable for the quality of the ride than a crappy medallion cab with a driver who is on the phone, the whole time being forced to watch ads on their "entertainment screen" with no off button. Uber isn't a monopoly (yet), but they are breaking a monopoly, and that's a good thing. [0] http://www.bostonglobe.com/metro/specials/taxi http://www.bostonglobe.com/metro/specials/taxi

dx034 10y ago

Traditional taxis are threatened by new competitors, but the plural here is important. It's not just Uber, it's Uber, Lyft, and all the others that can come up. Here in London we already have a large number of minicab companies. Uber is very successful because they're cheapest. But as soon as they'd raise prices someone else will take the crown. Developing a basic app for taxis (calling a cab, paying, ETA) will probably not cost more than a few millions. Getting people to drive for you (in addition to other companies) is also very easy at the moment. That makes barriers to entry extremely low in the market. It's not an Amazon with huge warehouses and not a Google with a highly sophisticated search algorithm. Uber just competes by price, they have no real technical advantage here.

SamPhillips 10y ago

The lack of medallion rent-seeking could be Uber's structural advantage against taxis. The framing I see sometimes of Big Mean Uber vs 'poor little guy cab driver' seems wholly out of touch with my experience. At least in Boston the taxi system is/was rife with corruption and cronyism. Neither riders or drivers get a good deal, just medallion owners and the regulators they captured[0]. The money isn't staying in the 'local economy', to 'small business owners', it is, by and large, going to rent-seeking medallion owners, many of whom live out of state to monopoly holders who use that power to prevent competition through regulation. I'd happily pay the same to take an Uber driven by someone who wasn't being exploited and who was accountable for the quality of the ride than a crappy medallion cab with a driver who is on the phone, the whole time being forced to watch ads on their "entertainment screen" with no off button. Uber isn't a monopoly (yet), but they are breaking a monopoly, and that's a good thing. [0] http://www.bostonglobe.com/metro/specials/taxi http://www.bostonglobe.com/metro/specials/taxi