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Assuming the tech is in place and there are many otherwise equal firms entering the market, Uber would have a competitive advantage from their pre-existing cust
by stult 9y ago
Assuming the tech is in place and there are many otherwise equal firms entering the market, Uber would have a competitive advantage from their pre-existing customer base. Plus already having the tech in place for arranging the trip. Does that justify their valuation? Maybe, maybe not. Even if some other firm beats them to market with driverless tech, they can always buy driverless cars from that company, or that company may buy Uber just for access to the ready made market. But it's all very theoretical and far off, so I'd say it probably doesn't justify the valuation. Their ability to pivot to actually profiting off their current services is what probably matters most to their near term valuation.
- skdotdan 9y agoBut do you think that Uber has a moat? I don't care if it's Uber, Lyft or whatever. Installing an app and adding your credit card doesn't represent a huge switching cost, only a little friction. The point of Uber is that they have many drivers. They have economies of scale on the supply side. But if the self-driving technology becomes a commodity, consumers no longer will care whether it's Uber or Gett.
- icebraining 9y agoExactly. I could see them keeping a large userbase, since users have inertia (speaking for myself - I'm yet to try their competitor, despite having the app installed). But like the King in the Little Prince, they only have that position as long as they don't actually take advantage of it. They'll have to keep slim margins to avoid losing users, which doesn't bode well for the investors.