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This always blew my mind: a smartphone app for a cab company that doesn't even own any cabs raised $16 billion. It simply can't be that they spent even a small

This always blew my mind: a smartphone app for a cab company that doesn't even own any cabs raised $16 billion. It simply can't be that they spent even a small fraction of that writing software, smartphone apps just aren't that expensive. But they've got one helluva marketing engine and investor relations group... That, and a lot of their money is buying market share, effectively subsidizing people's rides. I've never understood how that's going to work, beyond vague handwavey arguments about potential future driverless cabs and other complex arguments that don't seem backed by data.

origami777 9y ago
I think the lesson here is that kickstarting new markets (entering new countries) is not easy. They basically have a local or regional team that needs to find a way to drive user adoption. They also spend a lot of money on promotions to change user and driver behavior. IMO it doesn't do them just when we say "it's just an app". It's a complex operation that they've simplified to appear as that way.
- moxious 9y ago
  It's fine to spend money driving a new market but you eventually have to capitalize on it. How will that work? Large price increases, or just betting that driverless tech will eliminate costs and get them to profitability? Also, they already have substantial scale. When would one reasonably expect them to stop losing so much money?
  - fstuff 9y ago
    Just take a look at Didi. They won the market in China and now prices are up, driven incentive pay is cut, wait times are up because drivers are leaving the platform because pay is down. https://www.google.com/amp/amp.timeinc.net/fortune/2016/09/14/didi-china-users-prices/%3fsource=dam https://www.google.com/amp/amp.timeinc.net/fortune/2016/09/1...
  - valuearb 9y ago
    When they stop expanding worldwide. The world is an extremely large place. Paying drivers hundreds of dollars to sign up with Uber in hundreds of countries is a massive startup expense.
  - origami777 9y ago
    I agree with you. I was simply trying to address the comment that it's "just an app".
- tootie 9y ago
  Well, it's clearly a very successful business. But to your point, their success if their ability to break into new markets. Striking a deal with the Taxi and Limousine Commission in NYC was probably their single most valuable innovation and it was lawyers, not programmers who pulled it off.

origami777 9y ago

I think the lesson here is that kickstarting new markets (entering new countries) is not easy. They basically have a local or regional team that needs to find a way to drive user adoption. They also spend a lot of money on promotions to change user and driver behavior. IMO it doesn't do them just when we say "it's just an app". It's a complex operation that they've simplified to appear as that way.

moxious 9y ago
It's fine to spend money driving a new market but you eventually have to capitalize on it. How will that work? Large price increases, or just betting that driverless tech will eliminate costs and get them to profitability? Also, they already have substantial scale. When would one reasonably expect them to stop losing so much money?
- fstuff 9y ago
  Just take a look at Didi. They won the market in China and now prices are up, driven incentive pay is cut, wait times are up because drivers are leaving the platform because pay is down. https://www.google.com/amp/amp.timeinc.net/fortune/2016/09/14/didi-china-users-prices/%3fsource=dam https://www.google.com/amp/amp.timeinc.net/fortune/2016/09/1...
- valuearb 9y ago
  When they stop expanding worldwide. The world is an extremely large place. Paying drivers hundreds of dollars to sign up with Uber in hundreds of countries is a massive startup expense.
- origami777 9y ago
  I agree with you. I was simply trying to address the comment that it's "just an app".
tootie 9y ago
Well, it's clearly a very successful business. But to your point, their success if their ability to break into new markets. Striking a deal with the Taxi and Limousine Commission in NYC was probably their single most valuable innovation and it was lawyers, not programmers who pulled it off.