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I would understand if it was a small small startup like his that was in trouble, but even if Uber got in trouble for violating the patents, its still just resea

by aeleos 9y ago

I would understand if it was a small small startup like his that was in trouble, but even if Uber got in trouble for violating the patents, its still just research for developing self-driving cars that isn't critical to their day to day business. I am not asking why bother helping a company in a similar situation, but why bother helping a company that didn't really need helping?

asabjorn 9y ago
Self driving cars is an existential threat to Uber if others have accesss to it while Uber doesn’t, or others have cheaper access. Why don’t you think helping Uber fighting off parent claims without merit would help?
jlgaddis 9y ago
There are many people who believe that this trial is very important to the survival of Uber. If they lose -- or otherwise can't develop self-driving cars -- they are 100% permanently screwed. They are burning through way too much money and it's simply not sustainable long term. If they can bring self-driving cars to market -- allowing them to not have to pay drivers -- they'll be able to survive and may even do quite well.
- Baeocystin 9y ago
  Serious question- what is it that Uber does that requires such a burn rate? They've offloaded fleet costs on to the people that drive for them. Their mobile client apps don't need to do much. Whatever they need to run server-side isn't going to be rocket surgery, either. (I understand that trying to develop self-driving cars is going to be a huge R&D expense. I'm talking about their day-to-day operational costs.)
  - raiyu 9y ago
    The largest cost will be in sales and marketing. They offer large incentives to get drivers to sign up, such as offering cash for becoming an Uber driver. They also want to provide the best price possible to consumers, so that sometimes that means selling below cost, or at least selling below the cost when all sales and marketing expenses are included. Growing so quickly in a short period of time there is also typically some level of over staffing as well as generally not being 100% diligent with use of funds. There was an article before how they were spending over $100MM with an ad agency only to realize the numbers were inflated and eventually dropping them, but that is just one example of ineffective spend. That's not to imply that they are 50% ineffective, but even being 10% ineffective when budgets are in the billions adds up. The thought process is that the cost of switching between providers is very low when it comes to Uber/Lyft, when the cost of switching is low to consumers you want to establish your dominance in that market as rapidly as possible otherwise if you move slowly, then a competitor can steal market share away from you. If there are any network effects to market penetration then that begins to create a bit of a moat. So if you think about the availability of cars/drivers at any time of the day to meet the demand, then having a large marketshare is beneficial to getting a ride for a customer quickly. That couple with marketing and lowering the cost of the ride as much as possible to establish the market is where the majority of that money goes.
    - Baeocystin 9y ago
      You raise a good point about how the cost of switching on the consumer side being low implies that establishing a dominant mindshare becomes that much more important. Thanks for the answer.

by aeleos 9y ago

asabjorn 9y ago

Self driving cars is an existential threat to Uber if others have accesss to it while Uber doesn’t, or others have cheaper access. Why don’t you think helping Uber fighting off parent claims without merit would help?

jlgaddis 9y ago

There are many people who believe that this trial is very important to the survival of Uber. If they lose -- or otherwise can't develop self-driving cars -- they are 100% permanently screwed. They are burning through way too much money and it's simply not sustainable long term. If they can bring self-driving cars to market -- allowing them to not have to pay drivers -- they'll be able to survive and may even do quite well.

Baeocystin 9y ago
Serious question- what is it that Uber does that requires such a burn rate? They've offloaded fleet costs on to the people that drive for them. Their mobile client apps don't need to do much. Whatever they need to run server-side isn't going to be rocket surgery, either. (I understand that trying to develop self-driving cars is going to be a huge R&D expense. I'm talking about their day-to-day operational costs.)
- raiyu 9y ago
  The largest cost will be in sales and marketing. They offer large incentives to get drivers to sign up, such as offering cash for becoming an Uber driver. They also want to provide the best price possible to consumers, so that sometimes that means selling below cost, or at least selling below the cost when all sales and marketing expenses are included. Growing so quickly in a short period of time there is also typically some level of over staffing as well as generally not being 100% diligent with use of funds. There was an article before how they were spending over $100MM with an ad agency only to realize the numbers were inflated and eventually dropping them, but that is just one example of ineffective spend. That's not to imply that they are 50% ineffective, but even being 10% ineffective when budgets are in the billions adds up. The thought process is that the cost of switching between providers is very low when it comes to Uber/Lyft, when the cost of switching is low to consumers you want to establish your dominance in that market as rapidly as possible otherwise if you move slowly, then a competitor can steal market share away from you. If there are any network effects to market penetration then that begins to create a bit of a moat. So if you think about the availability of cars/drivers at any time of the day to meet the demand, then having a large marketshare is beneficial to getting a ride for a customer quickly. That couple with marketing and lowering the cost of the ride as much as possible to establish the market is where the majority of that money goes.
  - Baeocystin 9y ago
    You raise a good point about how the cost of switching on the consumer side being low implies that establishing a dominant mindshare becomes that much more important. Thanks for the answer.