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If Uber just focuses on ride-sharing, without innovation, it's unclear to me how they could survive. They seem to scale in reverse. That is, an Uber that runs

If Uber just focuses on ride-sharing, without innovation, it's unclear to me how they could survive. They seem to scale in reverse. That is, an Uber that runs in the US and the UK will cost more to operate than an Uber that runs in just the US. An Uber that runs in one state will cost less than an Uber that runs in a whole country, and so on. The more diverse an area you serve, the more legislation and markets you have to deal with, more hours you'll have high customer support load, and the less well you will be able to analyze and react to trends in individual markets. What stops me, then, in an era where Uber isn't fueled by investor money every trip, from being a competitor with Uber? Raise a few million dollars, get a simple app together with a few friends, and then convince drivers to try (take a lot of short Uber rides and pitch good drivers) and riders to ride. I'd have less staff, less overhead, and therefore less costs. The savings could be passed on equally to the drivers and riders. I could give discounts on nights when there was a big game, I could advertise in local areas, I could poach good drivers from Uber, etc. It seems to me there is no way for Uber to be competitive if they aren't using investor to subsidize the price of rides. There is nothing, that I am aware of, that is impossible or expensive to replicate in their tech.

yeukhon 9y ago
I think we need to make peace with the word innovation sometimes. Innovation should be realistic in the right timing. Surely autonomous car is a really interesting future, but Uber has plenty of organizational problems require urgent and decisive surgery. Abandon the auto project and UberEats (I don't even know if UberEats is even profitable or how many people actually use it) will allow the company to focus on core problems. How can you clean your house if your kids constantly go around the house making a mess? Let's get the house cleaned first then we worry about how to correct the kids' behaviors. Basically, do one thing well enough before moving to another. They really need to focus on growing in cities and countries where they face competitions but already have a strong root. I understand the awesomeness to be the bigges, but look at Uber China, Uber had to parnter with Di Di instead (Uber doesn't run its business in mainland China anymore). Uber also recently shut down its business in Marcu because the drivers were fined so much no one would work for Uber.
- xyzzy_plugh 9y ago
  For what it's worth, my understanding is that Uber eats is more profitable than the core ride-sharing business.
  - valuearb 9y ago
    You must mean less unprofitable.
joejerryronnie 9y ago
I wonder if Uber should explore some type of franchise model. I don't think I've seen anything like this in tech but it would allow them to offload some of the local costs/complexities to a presumably more locally dialed in franchisee, while maintaining a focus on their core tech & brand marketing. Despite the spate of HR/PR disasters, the Uber brand is still extremely strong.
valuearb 9y ago
I don't think you understand their business. The code that supports the US market also supports the UK market, it needs changes for currency/regulations, but it's not being entirely rewritten. Providing the booking service for a ride can't cost more than a few cents, and they get paid a few dollars. And Uber has hundreds of competitors, and it's crushing all of them because of brand. I have Uber on my phone. I will never have your app. Getting app installs is hugely expensive and they have a huge lead. Even if you pay for installs, people will delete your app as soon as they realize you don't have as many drivers. They have a huge lead in a big market. They need to not lose that.
- ImSkeptical 9y ago
  When I say that they need more people, I mean that they need customer service that can handle the new market, legal people for the new laws, finance people for the taxes, etc. I'm aware they can largely reuse the code that underlies their service. People do switch their ride solution. For example, I used to use taxis when I needed to hire a ride. I switched to uber because it was easier and cheaper. If something was as easy and cheaper, I'd use that instead (For example, I use lyft whenever it has a better price and I have the time to check). Building a competitor for a single city seems plausible. I don't think there is a technology related hurdle. All you need is the capital to build the brand and to be competitive on price.

yeukhon 9y ago

I think we need to make peace with the word innovation sometimes. Innovation should be realistic in the right timing. Surely autonomous car is a really interesting future, but Uber has plenty of organizational problems require urgent and decisive surgery. Abandon the auto project and UberEats (I don't even know if UberEats is even profitable or how many people actually use it) will allow the company to focus on core problems. How can you clean your house if your kids constantly go around the house making a mess? Let's get the house cleaned first then we worry about how to correct the kids' behaviors. Basically, do one thing well enough before moving to another. They really need to focus on growing in cities and countries where they face competitions but already have a strong root. I understand the awesomeness to be the bigges, but look at Uber China, Uber had to parnter with Di Di instead (Uber doesn't run its business in mainland China anymore). Uber also recently shut down its business in Marcu because the drivers were fined so much no one would work for Uber.

xyzzy_plugh 9y ago
For what it's worth, my understanding is that Uber eats is more profitable than the core ride-sharing business.
- valuearb 9y ago
  You must mean less unprofitable.

joejerryronnie 9y ago

I wonder if Uber should explore some type of franchise model. I don't think I've seen anything like this in tech but it would allow them to offload some of the local costs/complexities to a presumably more locally dialed in franchisee, while maintaining a focus on their core tech & brand marketing. Despite the spate of HR/PR disasters, the Uber brand is still extremely strong.

valuearb 9y ago

I don't think you understand their business. The code that supports the US market also supports the UK market, it needs changes for currency/regulations, but it's not being entirely rewritten. Providing the booking service for a ride can't cost more than a few cents, and they get paid a few dollars. And Uber has hundreds of competitors, and it's crushing all of them because of brand. I have Uber on my phone. I will never have your app. Getting app installs is hugely expensive and they have a huge lead. Even if you pay for installs, people will delete your app as soon as they realize you don't have as many drivers. They have a huge lead in a big market. They need to not lose that.

ImSkeptical 9y ago
When I say that they need more people, I mean that they need customer service that can handle the new market, legal people for the new laws, finance people for the taxes, etc. I'm aware they can largely reuse the code that underlies their service. People do switch their ride solution. For example, I used to use taxis when I needed to hire a ride. I switched to uber because it was easier and cheaper. If something was as easy and cheaper, I'd use that instead (For example, I use lyft whenever it has a better price and I have the time to check). Building a competitor for a single city seems plausible. I don't think there is a technology related hurdle. All you need is the capital to build the brand and to be competitive on price.