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How do you feel about Uber? They arguably don't have a sustainable competitive advantage either. Yet they're somehow looking at a $120B IPO next year.
by meritt 8y ago
How do you feel about Uber? They arguably don't have a sustainable competitive advantage either.
Yet they're somehow looking at a $120B IPO next year.
- Joeri 8y agoUber is a transportation marketplace. If they’re successful in cornering the market all transportation is arranged through them but they employ zero drivers, and therefore would be wildly profitable. That’s why they’re all about market share at any cost.
- kanyethegreat 8y agoYeah, and Uber's founder's name is Travis Kalanick. How does spitting out random facts about Uber at all address his comment that Uber doesn't have a sustainable competitive advantage.
- Joeri 8y agoTheir sustainable advantage is in dominance. If they offer the most transportation options people check them first, and drivers flock to where the people are.
- nradov 8y agoThat's not how it actually works. Customers flip back and forth between Uber and competing services based on cost and availability. There's literally zero switching cost and no customer loyalty.
- gaius 8y agoIf Uber disappeared tomorrow, everyone would download another app and do the same journey in the same car with the same driver and the day after tomorrow would forget that Uber ever existed.
- jpatokal 8y agoBut today they have the biggest network of drivers, and until they do disappear (or get disrupted by something like self-driving cars), network effect ensures that they'll remain the default option.
- jononor 8y agoSame can be said for Instagram or Twitter?
- gaius 8y agoYes and no. There’s no ongoing relationship between people on Uber, drivers don’t have passengers as “followers” or “friends” or vice versa. There’s no network effect really. And many users and many drivers have multiple apps anyway. The stickiness of Uber is incredibly low.
- jeffbax 8y agoIt's called a network effect
- andyidsinga 8y agoI don't think there is a network effect present in either Uber's or Blue Apron's business model. <snip snip> A network effect (also called network externality or demand-side economies of scale) is the positive effect described in economics and business that an additional user of a good or service has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.[1] [1] https://en.wikipedia.org/wiki/Network_effect https://en.wikipedia.org/wiki/Network_effect
- jeffbax 8y agoBlue Apron, not really. Uber certainly has a network effect. While many switched to Lyft given bad press, plenty more still got Uber originally (both sides of the market) and just use that. As they add more transit capabilities to their app (bikes, scooters etc) they will raise their moat as people just go there for all their transit needs.