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Ask HN: How would Uber or Airbnb fare against subscription model?
Assume there is a new competitor (a company, gov, union).
And it's business model is below:
A constant X% of what they make in each transaction until a max of $100 is paid per month.
And after $100 is paid, a small percentage to cover card payment expenses(like stripe) from customers.
Think of it like a mix of 'Pay-as-you-go + SaaS' model.
Why this ?
Sure companies like Uber-Airbnb empower a lot of individuals. But for the technology they offer (producer-consumer of service match, reviews, few fields of text and pictures) the cut in profit is huge! I understand there is much more 'science' involved than I have mentioned. But yet, I am comparing tech behind these companies with say a search engine like Google. Or even comparing it with Amazon which atleast owns warehouses. Uber/Airbnb don't own any of physical assets and I fail to see why its 'partners or service providers' would hesitate to migrate.
Some numbers:
Number of taxis in US : ~234000
Subscription revenue / year : 234000 x 12 months x ~70 = ~196 Million.
Number of uber drivers in US : ~160000
Subscription revenue / year : 160000 x 12 months x ~50 = ~96 Million.
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Basically, I am kind of against companies which help producer-consumer meet and then take share from every transaction. Why cannot it be like service provider rents a place in 'cloud' for a price/month and do his business.
edit: formatting and clarification on pricing.
- smt88 9y ago> But for the technology they offer (producer-consumer of service match, reviews, few fields of text and pictures) the cut in profit is huge! Uber and Lyft are far from profitable. Some people have described Uber as a public charity. You also misunderstand what Uber is doing beyond building a simple app and opening signups. They spend an enormous amount of money (many billions) marketing, which is necessary to keep both sides of the market. Without enough drivers, riders will leave. Without enough riders, drivers will leave. They need to keep both sides engaged. They're also putting a lot of effort into lobbying and getting around taxi laws. It's expensive and legally risky. Finally, both Uber and Lyft have tested subscriptions and seem to have decided against them.
- samblr 9y agoI understand Gov are lagging behind in these things. But still I cannot help but think why can't it be done ? And how can Uber/Lyft survive vs their own SaaS avatars.
- sharemywin 9y agoUnless you can guarantee a wage no one would want a subscription. The value they provide to drivers is customer+software.
- samblr 9y agoThere is a percentage for every transaction till one reaches subscription price (i.e max that will be paid)