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There's nothing about this that will allow a single, monopolistic entity to emerge. There are probably hundreds of "Uber-ripoff" apps out there by now. Sure, as
by mseebach 9y ago
There's nothing about this that will allow a single, monopolistic entity to emerge. There are probably hundreds of "Uber-ripoff" apps out there by now. Sure, as long as someone is willing to pour VC money into it and give people subsidized rides, sure, Uber can kill off contenders and stay dominant. But the second Uber starts raising prices to extract monopoly profits, someone else steps in and undercuts them. You can probably get started in a city for a few $100k, or even less if you have an existing operation of some sort you can leverage.
The low-barrier-to-entry nature of this market is pretty much perfectly suited for market conditions to prevail and ride prices to stabilize quite near their costs.
- emodendroket 9y agoThat's essentially the argument NC has presented for why Uber is not sustainable.
- mseebach 9y agoIn that case they make very bad arguments, because such an equilibrium would be expected to be quite stable (although Uber might not be part of it).
- emodendroket 9y agoIf Uber "is not part of the equilibrium" then that would suggest it wasn't sustainable.
- mseebach 9y agoSo they would have preferred it, possibly come to a different conclusion, if Uber would have been likely to be established as a perpetual monopoly?
- emodendroket 9y agoIt's not a normative argument.
- mseebach 9y agoSo they did not base any decision on the observation?
- emodendroket 9y agoI don't understand what you are asking.
- mseebach 9y agoMy interpretation of your comments is that the state of North Carolina used as an argument against deregulating its taxi market to an extent that would allow Uber to operate in the state that Uber might not survive the ensuing competition. If so, that is indeed then a normative observation, and it's also a pretty silly argument. Thus, my incredulity that is actually the case. I'd be interested in knowing what, then, their argument actually was.
- emodendroket 9y agoNC stands for "Naked Capitalism," the Web site on which the linked article appears.
- mseebach 9y agoface-palm Okie dokie, forget what I said. Sorry.