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"It seems like in reality such monopolies are limited geographically." Yes - they will be won 'city by city'. It's entirely possible that Lyft gets Houston, U

"It seems like in reality such monopolies are limited geographically." Yes - they will be won 'city by city'. It's entirely possible that Lyft gets Houston, Uber gets Dallas - i.e. once the critical mass is established, it's hard to push out the incumbent. The funny thing is, they are all planning on 'self driving cars' and at that point, I see so many shifts in the landscape. The advantage of Uber was the drivers - willing to put in extra time full/part to pick up the slack from taxis etc.. But with 'self driving' I'm not sure if there is a natural monopoly. So many other massive, massive entities would be interested and could make a play: automotive companies, car rental agencies etc. etc..

FabHK 10y ago
There is a natural monopoly. The biggest supplier will most likely have a taxi for you nearby, so will most likely have the shortest wait time. Then, they will have the highest utilisation, and therefore the lowest cost. This is incidentally precisely why I think they should be regulated like utilities. You could have independent ride-offering firms providing cars (with or without drivers, and possibly at different service/comfort levels), and independent apps providing billing and possibly extra services, but they all have to go through one network regulated as a utility (so that you could e.g. hail a Lyft car through the Uber app). I think that would avoid monopolies and give maximum benefit to riders and drivers.
- laingc 10y ago
  That's not a natural monopoly. The capital costs are nowhere near on the order of magnitude required to block new VC-backed companies from entering the market. Your comparison to utilities aptly demonstrates this point: to introduce a new transportation service, you would need to fund software and digital infrastructure, as well as physical vehicles (self-driving, most likely). That is well within the realm of a funded company to achieve. No digging up roads to lay new water pipes, creating new easements and installations for electric power lines, or any of the other substantial barriers to entry that existing markets for public utilities present. Even setting that aside, your suggested solution to what is, in my view, a non-problem, is to introduce exactly the kind of regulations that have resulted in the abysmal service and high cost of existing taxi firms. In order for firms to be incentivised to create these new business models - and let's be clear, the Uber/Lyft model is very much a new and revolutionary model in this industry - there needs to be the just reward for their investment. This is the incentive that creates new value. If you regulate that value away, you will be left with a new tier of lacklustre taxi 2.0 offerings.

FabHK 10y ago

There is a natural monopoly. The biggest supplier will most likely have a taxi for you nearby, so will most likely have the shortest wait time. Then, they will have the highest utilisation, and therefore the lowest cost. This is incidentally precisely why I think they should be regulated like utilities. You could have independent ride-offering firms providing cars (with or without drivers, and possibly at different service/comfort levels), and independent apps providing billing and possibly extra services, but they all have to go through one network regulated as a utility (so that you could e.g. hail a Lyft car through the Uber app). I think that would avoid monopolies and give maximum benefit to riders and drivers.

laingc 10y ago
That's not a natural monopoly. The capital costs are nowhere near on the order of magnitude required to block new VC-backed companies from entering the market. Your comparison to utilities aptly demonstrates this point: to introduce a new transportation service, you would need to fund software and digital infrastructure, as well as physical vehicles (self-driving, most likely). That is well within the realm of a funded company to achieve. No digging up roads to lay new water pipes, creating new easements and installations for electric power lines, or any of the other substantial barriers to entry that existing markets for public utilities present. Even setting that aside, your suggested solution to what is, in my view, a non-problem, is to introduce exactly the kind of regulations that have resulted in the abysmal service and high cost of existing taxi firms. In order for firms to be incentivised to create these new business models - and let's be clear, the Uber/Lyft model is very much a new and revolutionary model in this industry - there needs to be the just reward for their investment. This is the incentive that creates new value. If you regulate that value away, you will be left with a new tier of lacklustre taxi 2.0 offerings.