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The $99B Idea: How Uber and Airbnb Won
- Palomides 10y agoread the article, what was the idea? spamming craigslist users to bootstrap your userbase? using venture capital to undercut existing businesses and get the public on your side, allowing you to dominate local politics?
- aianus 10y agoOffloading risk and capital costs to ordinary members of the public that already owned underutilized assets. Love them or hate them, it was pretty genius.
- deepakhj 10y agoLyft (zimride) started the first carpool site. Sidecar started the first rideshare app. Uber used excess black cars capacity to start. I would say sidecar and lyft were pretty genius but Uber won the game.
- kartan 10y ago"Uber Loses at Least $1.2 Billion in First Half of 2016" (https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016 https://www.bloomberg.com/news/articles/2016-08-25/uber-lose...) How is that winning? Is capitalism dead and profits don't count anymore? Then what are the social benefits of company known for sabotaging unions and fighting against labor protection laws? The original idea, to share car rides, was really good and worth investment. Now it is just a big bubble waiting to explode.
- ddorian43 10y agoProfits are for after going public.
- forthefuture 10y agoI don't know if it's a bubble, because nothing depends on the valuation of Airbnb / Uber. It's more like a Ponzi Scheme where investors put money in to establish value, then make the company well known enough to pawn it off to public shareholders before it tanks.
- ape4 10y agoThey could make a profit. Just need to stop expanding and subsidizing drivers.
- cpolis 10y agoThis is a big assumption. There are levels where the economics don't work out for drivers and riders are willing to pay - it remains to be seen whether are not Uber is profitable at these levels.
- tomblomfield 10y agoPeople said this about Amazon for 20 years http://www.ibtimes.com/amazon-nearly-20-years-business-it-still-doesnt-make-money-investors-dont-seem-care-1513368 http://www.ibtimes.com/amazon-nearly-20-years-business-it-st... And for 8 years about Facebook http://www.theinquirer.net/inquirer/news/2219503/facebook-grows-members-and-revenue-but-still-loses-money http://www.theinquirer.net/inquirer/news/2219503/facebook-gr... I wish I'd bought stock in both while they were still losing money.
- amirmc 10y agoSure, we can point to exceptions after the fact. That doesn't mean every company is going to follow those trajectories. In other words, criticism is still valid.
- dang 10y agoBy the same argument you can predict that everything will fail and be right most of the time. That sort of blanket dismissal is intellectually lazy and therefore uninteresting. Let's try to do better than that here.
- amirmc 10y ago> By the same argument you can predict that everything will fail and be right most of the time. Yes, exactly. It's worth reminding people that for every success there are many unheard of failures. I find it lazy when people claim "They said that about <example>", as if that's actually a counterpoint (it isn't).
- kartan 10y agoYep. https://en.wikipedia.org/wiki/Survivorship_bias https://en.wikipedia.org/wiki/Survivorship_bias
- FussyZeus 10y agoNeither of those are based on a third party resource of underpaid and upset drivers/renters/city councils. I have very reserved feelings about both Uber and Airbnb. Any company that makes it their secondary mission to get into fights with as many city governments as possible doesn't have good odds.
- 1_listerine_pls 10y agoYou are so smart
- eternalban 10y ago> what are the social benefits of company known for sabotaging unions and fighting against labor protection laws? Depends on your point of view, right? Money flows are like a rainbow with the pot of golden truth at the end of it: always "follow the money".
- RodericDay 10y ago2008 Financial Crisis
- RobPfeifer 10y agoPresumably this a PR article?
- baybal2 10y agoAll of that was everyday reality for people outside of the first world countries long before internet was a thing. 1. Flats turned into mini hotels - existed since first highrise appartments started appearing in 3rd world countries 2. Carpooling - old as the world. In smaller Russian cities, people absolutely don't mind driving strangers around for a symbolic sum. In "good ol times" people used to do it for free. 3. Food devilery - phone order pizzas anyone? I remember first internet groceries started at around 1998, and they catered to really rich demographic living in far off suburbs ($30 just for the delivery fee, a daily income of a well off family back in 1998), but later internet only ones started to be displaced by existing grocery chains 4. "Microcommerce" - I don't know why Americans classify just selling anything with an app as such and why it is anything special 5. Regional same day delivery couriers - same story 6. Alibaba thing - classifieds in a newspaper? All what Americans call the "sharing economy" or "economy 2.0" was what 80% of small business was about outside of the "developed countries"
- akum 10y agoTrue, but you had to know/trust the other person. These platforms solve that problem through reviews and handling of payment.
- graeme 10y agoNot so. Ride sharing in other countries often happens without knowing the people you share rides with.
- hkmurakami 10y agoWhat kind of social fabric do these countries have? What's the crime rate? The US being a very diverse and relatively high crime country makes such acts difficult.
- stcredzero 10y agoWhat kind of social fabric do these countries have? An existent one! In Alaska in the 90's, I also used to get rides from random strangers. In fact, I used to commute to work this way!
- 010a 10y ago> How Uber and Airbnb Won The game never ends. No one wins. They can only be "winning".
- zappo2938 10y agoLike Charley Sheen?
- quentindemetz 10y ago> Airbnb can be considered one of the biggest hotel companies in the world—currently valued at $30 billion. Priceline Group, owner of Booking.com, is currently valued at $79 billion.
- Illniyar 10y agothat, or - they found a heavily regulated market, ignored all the laws, invented a business model that didn't squarely fall into legal precedent and that the people in charge of enforcing the law (city officials) aren't very keen to enforce it. We applaud them only because we believe (and probably rightly so) that those regulations are there only to prevent competition for entrenched interests. It's not sharing economy if the majority of the people offering the service do it full-time.
- greggman 10y agoUber sounds pretty evil > The FTC claimed that Uber was advertising an annual median income of over $90,000 per year for uberX drivers in New York and more than $74,000 for uberX drivers in San Francisco. But, as the commission found out, less than 10 percent of all drivers in those cities actually make that much. The complaint also alleges that Uber was inflating the hourly earnings on job boards like Craigslist. > New drivers who financed a new car through Uber's Vehicle Solutions Program found out the company's claims were too good to be true as well. Although Uber told new drivers they would be able to lease a new car for around $119 per week, the actual lease rates never dipped below $200 from late 2013 to April 2015. And, despite it's promise of delivering "the best financing options available," it turns out that Uber's rates were actually worse than consumers with similar credit scores could have gotten elsewhere. Adding insult to overpriced injury, Uber tacked on mileage limits to lease agreements that were advertised with unlimited mileage. I like “taking an Uber" but if they’re screwing people over by false advetising I’d consider boycotting them. Been in several Ubers where the driver had just bought a high end-ish car specifically to be an Uber driver. It sounded risky to me and I was sad the driver was taking such a big chance although assumed it’s possible his calculations showed it would work out. Now thought it’s apparent that Uber lied about how much he’d make, lied about how much the car would cost, and lied about the lease terms. Continuing to support Uber seems problematic knowing I’d be helping screw people into more debt and poverty. Oh yea, and they're a YC company Oh and don't get me started on AirBnb. I've documented all kinds of issues on my blog. The latest is they removed a negative review. Log in and it says I never submitted it. Not only did it used to be on their site I still have the confirmation email for it.
- icebraining 10y agoOh yea, and they're a YC company No, they're not.
- hkmurakami 10y agoAirbnb is a YC company. Uber is not.
- XJOKOLAT 10y ago
- nojvek 10y agoI always think about the time when Facebook and Google were bleeding money. They were thought of as terrible businesses. When you have a shit ton of eye balls, you have a money printing machine: "Ads". Just plaster them in the face of users. Now with machine learning and average user expecting little privacy, you can really target the ads and customize it per person. It's amazing Wikipedia hasn't gone in the path of ads. I'm grateful for that. If uber's self driving car gizmo works out, which there is a good chance. They can make zero profit on rides and make them $1/10 mile trip. Make the cream off in car entertainment and services. They can have average person buy the car and rent it out to Uber network. Airbnb already loans money to home owners to renovate their houses.
- hkmurakami 10y agoIf a large user base were the only metric, then shouldn't Twitter have more robust revenue numbers? (Though I think I can see a world where Uber has more relevant tracking data than Twitter) Also, I hate flying airlines where they'll keto allowing you ads on their in flight screen (I think I had one flight where there was no entertainment and just ads). I'd happily rider on a competitor with higher prices that didn't thrust a bright ad laden display on me during the trip.
- MusaTheRedGuard 10y agoTwitter also has what somewhat ridiculous costs
- maverick_iceman 10y agoTotally. I hate Vegas taxis for showing ads.
- jimmywanger 10y ago> When you have a shit ton of eye balls, you have a money printing machine: > They can make zero profit on rides and make them $1/10 mile trip This only works when your incremental costs are next to nothing. The IRS lets you deduct about 40 cents a mile for business expenses when you drive for your job. That's the baseline for incremental costs for servicing passengers. Do you think you can sell 4 dollars worth of ads during a 10 mile trip, no matter how much data you have on the consumer? Plus the database on customer demographics and buying preferences is very jealously guarded by both FB and Google. Not to mention the huge amounts of capital tied up in cars, self-driving equipment, and a group of techs that are maintaining and repairing all these cars. That adds even more incremental costs, servicing all the capital. We're talking about having ads that are a couple of orders of magnitude more profitable than Google and Facebook ads are right now.
- arturmakly 10y agoin defense of Uber, here in Argentina ( where the taxi industry is run by the "mob" ) Uber's ability to instantly provide a safe and steady stream of income to thousands on the verge of middle-class collapse has been a godsend.
- arturmakly 10y agoin defense of Uber, here in Argentina ( where the taxi industry is run by the "mob" ) Uber's ability to instantly provide a safe and steady stream of income to thousands on the verge of middle-class collapse has been a godsend.
- maverick_iceman 10y agoI always wondered what's exactly the value that AirBnB is providing? Why can't a website with reviews by guests and hosts (with money handling) be run at a much smaller cost?
- jimmywanger 10y agoBasically trust and brand, as they said in the article. They had to come up with both supply and demand at the same time. You wouldn't use a service with limited supply, and as a renter, you wouldn't list your property on a service without any people willing to rent your spare room/apartment.