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I agree. Uber cannot monopolize the space because principally, there are no barriers to entry, and no network effects or switching costs for users. This means p

I agree. Uber cannot monopolize the space because principally, there are no barriers to entry, and no network effects or switching costs for users. This means profits will simply be competed away until a perfect competition graph is achieved. I have yet to see any really solid arguments against either of those points.

sebleon 10y ago
To the contrary, there's huge barriers to entry in every two-sided marketplace. To retain drivers, Uber needs many passengers; and to attract passengers, they need many drivers to keep wait times low. If you don't believe me, ask Sidecar. In an autonomous-car world, there's going to be huge initial capital costs to buy the fleet.
- Mikeb85 10y ago
  > In an autonomous-car world, there's going to be huge initial capital costs to buy the fleet. Yes and no. It'll be easy to get debt to pay for something with an obviously high return on capital.
- kbart 10y ago
  Don't forget that they compete against traditional taxis too. For example, in my town pretty much anyone can buy a taxi license even with a single car, get a tablet with SIM card to receive orders, pay some amount to centralized call center that serves many local companies 24/7 and also provides a user app (which I like better than Uber due to it's simplicity).
  - r00fus 10y ago
    What's the app?
    - kbart 10y ago
      https://play.google.com/store/apps/details?id=lt.etaksi.android&hl=en https://play.google.com/store/apps/details?id=lt.etaksi.andr... But it's local, only useful to few towns in Lithuania. Still worth taking a look at to see how simple and functional app should be done.
jacquesc 10y ago
One argument -- 2 sided marketplaces are a pretty decent barrier to entry. Craigslist, eBay, etc benefit from this. They have both sellers and buyers in the same place. Starting an Uber from scratch -- who would drive for it when there's not enough customers? What customers would use it if there's not enough drivers?
- coralreef 10y ago
  Ok, I concede that there is a high startup cost to signing up drivers and marketing to new customers. But arguably, Uber has paid the highest price by being first mover, allowing competition to follow behind and access this "social infrastructure" much more cheaply. As an example: Every Uber driver knows about Lyft (and other competitors) and is willing to drive for them if they pay better or offer more volume.
- greglindahl 10y ago
  Lyft already has a lot of drivers in many places, and apparently enough customers to make it worthwhile.
zby 10y ago
How about anti-monopoly laws?
- coralreef 10y ago
  Anti-trust laws seem to not work so well. There are a lot of monopolies in many industries.
  - mbreese 10y ago
    Monopolies by themselves aren't illegal. It's what you do with the monopoly that can get you into trouble. That said - there's no way for Uber to end up with a monopoly in this space. But if they did, they'd likely end up getting regulated like traditional taxi services.

sebleon 10y ago

To the contrary, there's huge barriers to entry in every two-sided marketplace. To retain drivers, Uber needs many passengers; and to attract passengers, they need many drivers to keep wait times low. If you don't believe me, ask Sidecar. In an autonomous-car world, there's going to be huge initial capital costs to buy the fleet.

Mikeb85 10y ago
> In an autonomous-car world, there's going to be huge initial capital costs to buy the fleet. Yes and no. It'll be easy to get debt to pay for something with an obviously high return on capital.
kbart 10y ago
Don't forget that they compete against traditional taxis too. For example, in my town pretty much anyone can buy a taxi license even with a single car, get a tablet with SIM card to receive orders, pay some amount to centralized call center that serves many local companies 24/7 and also provides a user app (which I like better than Uber due to it's simplicity).
- r00fus 10y ago
  What's the app?
  - kbart 10y ago
    https://play.google.com/store/apps/details?id=lt.etaksi.android&hl=en https://play.google.com/store/apps/details?id=lt.etaksi.andr... But it's local, only useful to few towns in Lithuania. Still worth taking a look at to see how simple and functional app should be done.

jacquesc 10y ago

One argument -- 2 sided marketplaces are a pretty decent barrier to entry. Craigslist, eBay, etc benefit from this. They have both sellers and buyers in the same place. Starting an Uber from scratch -- who would drive for it when there's not enough customers? What customers would use it if there's not enough drivers?

coralreef 10y ago
Ok, I concede that there is a high startup cost to signing up drivers and marketing to new customers. But arguably, Uber has paid the highest price by being first mover, allowing competition to follow behind and access this "social infrastructure" much more cheaply. As an example: Every Uber driver knows about Lyft (and other competitors) and is willing to drive for them if they pay better or offer more volume.
greglindahl 10y ago
Lyft already has a lot of drivers in many places, and apparently enough customers to make it worthwhile.

zby 10y ago

How about anti-monopoly laws?

coralreef 10y ago
Anti-trust laws seem to not work so well. There are a lot of monopolies in many industries.
- mbreese 10y ago
  Monopolies by themselves aren't illegal. It's what you do with the monopoly that can get you into trouble. That said - there's no way for Uber to end up with a monopoly in this space. But if they did, they'd likely end up getting regulated like traditional taxi services.