7 ms·

Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all local taxi services, then fix prices with their competitors and worry about anti-co

Seriously, what's Uber/Lyft's long term goal? If I had to guess, destroy all local taxi services, then fix prices with their competitors and worry about anti-competitive lawsuits later. Waiting for self driving cars feels like a fool's errand.

ghaff 8y ago
When Kalanick was booted, I actually did expect the board to call a timeout and take a hard look at the business model while admitting that self-driving, especially in places that actually have enough density to make taxi-type services generally of interest, is a red herring. It's too far out and it's not clear what the implications are anyway. It's not like Uber and Lyft aren't still a useful service at 1.5x to 2x current pricing (or whatever is needed to achieve profitability). Traditional taxi services suck in a lot of places. And, OK, at that point the users who only take Uber because of the VC subsidies end up going back to taking the bus. But who cares. >destroy all local taxi services Except they haven't. There are still taxis where they make sense as well as private car services. It's hard to see giving it a few more years is going to make much of a difference.
- mandelbrotwurst 8y ago
  It's not that they aren't a useful service at whatever price level would bring them profitability at current sales levels as much as that the demand curve may be such that if they were to raise prices theyd lose at least enough sales that it might not bring them to profitability at any price point. I.e. while someone earning $200K might decode they can afford $20 rides rather than $10 ones, someone making $50K might think differently. The "who cares" when people go back to riding the bus is Uber.
  - ghaff 8y ago
    That's true. But there's a clear existence proof that there is a market for people willing to pay what it costs to drive them around. It existed before Uber and Lyft and it still exists alongside them. Certainly there's a price sensitivity curve but there's no reason to believe a national on-demand service like Lyft or Uber couldn't operate profitability in the absence of being undercut by VCs burning money.
- joshklein 8y ago
  The usefulness of the service is dependent on the volume. If a 2x price increase cut the volume of passengers dramatically, the volume of drivers would correspondingly fall, and the likelihood of pushing a button on your phone to summon a driver already in your neighborhood likewise falls proportionally. Perhaps to the point where the service is literally valueless. None of this is to argue against the sustainability of the model, just to point out that no one has any idea what would happen. Network effects matter.
- mhneu 8y ago
  If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. I'll let someone chime in who understands the taxi business financials better. But in my observations, Uber and Lyft are only slightly cheaper than taxis. If prices go up, taxi companies will cut into their profits. I'll also say we (as a society) are very lucky that Lyft emerged as a real competitor to Uber. If one of Lyft or Uber had failed a few years ago, we'd be in a total monopoly situation by now, and "Uber" would have similar meaning as "Kleenex" or "Scotch tape" -- that is, there's only one kind of smartphone ride hailing service and everyone uses it. Maybe that was the play of both Uber and Lyft all along -- stay alive long enough to force the other out and get to monopoly well before autonomous vehicles enter. And they failed. Both are still alive. There is no one firm with a monopoly.
  - ghaff 8y ago
    >If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. I'm sure it varies. I don't use them much when I travel but my perception is that they're maybe 70% or so of the price of a taxi. So not a huge difference but enough that I usually default to Lyft if there's no reason not to. I agree about the competition. Though that's US-specific. Uber may operate under more regulation generally in Europe but I don't have a lot of personal experience.
  - njarboe 8y ago
    "Uber and Lyft are only slightly cheaper than taxis" A taxi from my home to/from the airport is $50-$55 with tip. Uber is $20-$25 non surge (which is most of the time). Before Uber, on an outbound I would always have a friend take me or drop me at BART. On the return, since the taxi is right there, I would take it about half the time. Now I take Uber/Lyft almost all the time. I'm not sure what I'll do when/if Uber goes up to $50.
  - chrisseaton 8y ago
    > If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. Taxis can't undercut them. Even if Uber were 2x as expensive, that would be ok because Taxis are 4x worse.
- gnopgnip 8y ago
  Many of the advantages ride sharing apps have can be used by traditional taxi services now, and there are a lot of places where taxis are fine, or more reliable than ride sharing. Taxis have their own advantages because of scale though. Lower cost maintenance with only fleet vehicles and from centrally managing maintenance, group rates for insurance, negotiating power when purchasing a fleet of vehicles. Longer term it takes either VC money, or drivers not factoring in depreciation and maintenance to stay price competitive with taxis.
wbl 8y ago
Too easy to enter the market, at least in a small area for price fixing to work.
- lallysingh 8y ago
  This exactly. I think eventually we could see a Kayak-like service that just compares rates for your trip against a set and books accordingly. Containing Uber/Lyft/local taxi service/etc. It's very easy to enter the market. You just need a map in a UI (mapbox) and a way to charge people (stripe/square). There's probably a decent market for transportation-service-as-a-service. $1000 gets you all setup with a custom app (configured instance of a general app). Drivers could have something similar where they see all the opportunities and potential fares across platforms in one app. What do they need? A list box to select the fare, then a map with reasonable routing, and a pay processor.
  - deleted 8y ago
    [deleted]
  - deminature 8y ago
    Have you considered you might be glossing over some of the complexity involved in running operations like these?
    - Synthetase 8y ago
      I am private beta testing an app that does exactly what is described.
      - deminature 8y ago
        It seems like there might be a difference between an app that serves a few hundred people and an app that serves hundreds of millions of people.
        aaronharder 8y ago
davio 8y ago
Taxis are really a short term play. Long term is really transport as a service - who owns the market when people no longer own cars.
- kirykl 8y ago
  The car manufacturers. Maybe the best long term play is targeted aquisition.
- maxxxxx 8y ago
  You can't own that market at least the way Uber or Lyft do it. It's so easy for their drivers to switch and it's easy for their customers. In my view they will keep their dominant market positions only while they subsidize rides and lose money. But as soon as they raise prices to be profitable there will be plenty of competition. I think the endgame is to dump the stock on the public market so investors and execs can cash out and mission accomplished. I don't think there is any viable long term plan.
  - jcfrei 8y ago
    A ride hailing service needs to reach a critical density of available cars per km^2 to be useful. When you first install the app there needs to be someone nearby who will pick you up - if there's no car nearby most people will uninstall it. Additionally the more people use your app and the more drivers you have in an area the more effectively you can deal with idling (less variance in demand spikes - making planning easier for drivers). So on the contrary: I think this is a very difficult market to enter for new companies.
    - sbilstein 8y ago
      You'd be surprised. Since switching is so low, you can pay your way to acquiring all the supply and demand to kick something off, hence all the ridesharing companies in NYC: https://finance.yahoo.com/news/ubers-competitors-in-nyc-are-growing-like-crazy-144556302.html https://finance.yahoo.com/news/ubers-competitors-in-nyc-are-... If you subsidize driving and subsidize riding significantly, people will sign up. A $40 bonus covers several rides for a customer so they'll hold onto the app at least until they've used their initial free offering.
ryanmercer 8y ago
>Seriously, what's Uber/Lyft's long term goal? Massive fleets of autonomous vehicles transporting people. People often fall into the trap of seeing Uber and Lyft as a taxi service, they are absolutely autonomous vehicle companies. The human drivers are simply there to collect massive amounts of data, and build brand recognition, while the autonomous vehicle technology comes to maturity.
- saalweachter 8y ago
  That's because they've done a shit job of building out a business that could act as the autotaxi. They are terribly placed to take advantage of self-driving vehicles, even if they perfect one, and they are spending in ways that are completely useless towards that long-term goal. A self-driving taxi company is going to look a lot like a car dealership that doesn't sell cars, or a lot like a taxi company that doesn't have any drivers. They're going to have a huge number of cars, parking lots to store cars that aren't in use, and technicians to service, clean and fuel vehicles periodically. Uber has none of these. Meanwhile, they're blowing through most of their venture capital selling rides below cost. This does nothing for their self-driving goals, because they aren't acquiring a "market", because there is no stickiness in taxi customers. It just wastes capital they will one day need to buy a huge number of self-driving vehicles and their maintenance facilities throughout the world. They would be better off sitting on that giant pile of money, or operate as a cash-losing taxi company so they can build out their maintenance facilities with venture capital while having regular drivers drive regular cars (which could also be serving as platforms for data gathering and training machine learning models).
  - albertgoeswoof 8y ago
    The UX for self driving Uber === the UX for Uber now The only theoretical differentiator is price. At the moment VC subsides are removing that as well
    - ghaff 8y ago
      I'm not sure why the downvotes, you're basically correct. I really don't care much whether it's a person or a computer driving me around. What I care about is the price. People seem to implicitly assume that autonomous driving will make getting driven around really cheap. But all you're really doing is taking a ~minimum wage driver out of the loop. A good starting point for costs is the $0.50ish/mile IRS mileage deduction which is maybe about half Lyft/Uber pricing today. That's a significant difference but I'm not sure it's a radically alter everyone's behavior difference.
notyourday 8y ago
Local on demand delivery service. Optimized and cheap. Packages. People. Files. Food. Drinks. Etc

ghaff 8y ago

When Kalanick was booted, I actually did expect the board to call a timeout and take a hard look at the business model while admitting that self-driving, especially in places that actually have enough density to make taxi-type services generally of interest, is a red herring. It's too far out and it's not clear what the implications are anyway. It's not like Uber and Lyft aren't still a useful service at 1.5x to 2x current pricing (or whatever is needed to achieve profitability). Traditional taxi services suck in a lot of places. And, OK, at that point the users who only take Uber because of the VC subsidies end up going back to taking the bus. But who cares. >destroy all local taxi services Except they haven't. There are still taxis where they make sense as well as private car services. It's hard to see giving it a few more years is going to make much of a difference.

mandelbrotwurst 8y ago
It's not that they aren't a useful service at whatever price level would bring them profitability at current sales levels as much as that the demand curve may be such that if they were to raise prices theyd lose at least enough sales that it might not bring them to profitability at any price point. I.e. while someone earning $200K might decode they can afford $20 rides rather than $10 ones, someone making $50K might think differently. The "who cares" when people go back to riding the bus is Uber.
- ghaff 8y ago
  That's true. But there's a clear existence proof that there is a market for people willing to pay what it costs to drive them around. It existed before Uber and Lyft and it still exists alongside them. Certainly there's a price sensitivity curve but there's no reason to believe a national on-demand service like Lyft or Uber couldn't operate profitability in the absence of being undercut by VCs burning money.
joshklein 8y ago
The usefulness of the service is dependent on the volume. If a 2x price increase cut the volume of passengers dramatically, the volume of drivers would correspondingly fall, and the likelihood of pushing a button on your phone to summon a driver already in your neighborhood likewise falls proportionally. Perhaps to the point where the service is literally valueless. None of this is to argue against the sustainability of the model, just to point out that no one has any idea what would happen. Network effects matter.
mhneu 8y ago
If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. I'll let someone chime in who understands the taxi business financials better. But in my observations, Uber and Lyft are only slightly cheaper than taxis. If prices go up, taxi companies will cut into their profits. I'll also say we (as a society) are very lucky that Lyft emerged as a real competitor to Uber. If one of Lyft or Uber had failed a few years ago, we'd be in a total monopoly situation by now, and "Uber" would have similar meaning as "Kleenex" or "Scotch tape" -- that is, there's only one kind of smartphone ride hailing service and everyone uses it. Maybe that was the play of both Uber and Lyft all along -- stay alive long enough to force the other out and get to monopoly well before autonomous vehicles enter. And they failed. Both are still alive. There is no one firm with a monopoly.
- ghaff 8y ago
  >If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. I'm sure it varies. I don't use them much when I travel but my perception is that they're maybe 70% or so of the price of a taxi. So not a huge difference but enough that I usually default to Lyft if there's no reason not to. I agree about the competition. Though that's US-specific. Uber may operate under more regulation generally in Europe but I don't have a lot of personal experience.
- njarboe 8y ago
  "Uber and Lyft are only slightly cheaper than taxis" A taxi from my home to/from the airport is $50-$55 with tip. Uber is $20-$25 non surge (which is most of the time). Before Uber, on an outbound I would always have a friend take me or drop me at BART. On the return, since the taxi is right there, I would take it about half the time. Now I take Uber/Lyft almost all the time. I'm not sure what I'll do when/if Uber goes up to $50.
- chrisseaton 8y ago
  > If Uber and Lyft prices go up 1.5x to 2x, that suddenly means that in cities, taxis undercut them. Taxis can't undercut them. Even if Uber were 2x as expensive, that would be ok because Taxis are 4x worse.
gnopgnip 8y ago
Many of the advantages ride sharing apps have can be used by traditional taxi services now, and there are a lot of places where taxis are fine, or more reliable than ride sharing. Taxis have their own advantages because of scale though. Lower cost maintenance with only fleet vehicles and from centrally managing maintenance, group rates for insurance, negotiating power when purchasing a fleet of vehicles. Longer term it takes either VC money, or drivers not factoring in depreciation and maintenance to stay price competitive with taxis.

wbl 8y ago

Too easy to enter the market, at least in a small area for price fixing to work.

lallysingh 8y ago
This exactly. I think eventually we could see a Kayak-like service that just compares rates for your trip against a set and books accordingly. Containing Uber/Lyft/local taxi service/etc. It's very easy to enter the market. You just need a map in a UI (mapbox) and a way to charge people (stripe/square). There's probably a decent market for transportation-service-as-a-service. $1000 gets you all setup with a custom app (configured instance of a general app). Drivers could have something similar where they see all the opportunities and potential fares across platforms in one app. What do they need? A list box to select the fare, then a map with reasonable routing, and a pay processor.
- deleted 8y ago
  [deleted]
- deminature 8y ago
  Have you considered you might be glossing over some of the complexity involved in running operations like these?
  - Synthetase 8y ago
    I am private beta testing an app that does exactly what is described.
    - deminature 8y ago
      It seems like there might be a difference between an app that serves a few hundred people and an app that serves hundreds of millions of people.
      - aaronharder 8y ago

davio 8y ago

Taxis are really a short term play. Long term is really transport as a service - who owns the market when people no longer own cars.

kirykl 8y ago
The car manufacturers. Maybe the best long term play is targeted aquisition.
maxxxxx 8y ago
You can't own that market at least the way Uber or Lyft do it. It's so easy for their drivers to switch and it's easy for their customers. In my view they will keep their dominant market positions only while they subsidize rides and lose money. But as soon as they raise prices to be profitable there will be plenty of competition. I think the endgame is to dump the stock on the public market so investors and execs can cash out and mission accomplished. I don't think there is any viable long term plan.
- jcfrei 8y ago
  A ride hailing service needs to reach a critical density of available cars per km^2 to be useful. When you first install the app there needs to be someone nearby who will pick you up - if there's no car nearby most people will uninstall it. Additionally the more people use your app and the more drivers you have in an area the more effectively you can deal with idling (less variance in demand spikes - making planning easier for drivers). So on the contrary: I think this is a very difficult market to enter for new companies.
  - sbilstein 8y ago
    You'd be surprised. Since switching is so low, you can pay your way to acquiring all the supply and demand to kick something off, hence all the ridesharing companies in NYC: https://finance.yahoo.com/news/ubers-competitors-in-nyc-are-growing-like-crazy-144556302.html https://finance.yahoo.com/news/ubers-competitors-in-nyc-are-... If you subsidize driving and subsidize riding significantly, people will sign up. A $40 bonus covers several rides for a customer so they'll hold onto the app at least until they've used their initial free offering.

ryanmercer 8y ago

>Seriously, what's Uber/Lyft's long term goal? Massive fleets of autonomous vehicles transporting people. People often fall into the trap of seeing Uber and Lyft as a taxi service, they are absolutely autonomous vehicle companies. The human drivers are simply there to collect massive amounts of data, and build brand recognition, while the autonomous vehicle technology comes to maturity.

saalweachter 8y ago
That's because they've done a shit job of building out a business that could act as the autotaxi. They are terribly placed to take advantage of self-driving vehicles, even if they perfect one, and they are spending in ways that are completely useless towards that long-term goal. A self-driving taxi company is going to look a lot like a car dealership that doesn't sell cars, or a lot like a taxi company that doesn't have any drivers. They're going to have a huge number of cars, parking lots to store cars that aren't in use, and technicians to service, clean and fuel vehicles periodically. Uber has none of these. Meanwhile, they're blowing through most of their venture capital selling rides below cost. This does nothing for their self-driving goals, because they aren't acquiring a "market", because there is no stickiness in taxi customers. It just wastes capital they will one day need to buy a huge number of self-driving vehicles and their maintenance facilities throughout the world. They would be better off sitting on that giant pile of money, or operate as a cash-losing taxi company so they can build out their maintenance facilities with venture capital while having regular drivers drive regular cars (which could also be serving as platforms for data gathering and training machine learning models).
- albertgoeswoof 8y ago
  The UX for self driving Uber === the UX for Uber now The only theoretical differentiator is price. At the moment VC subsides are removing that as well
  - ghaff 8y ago
    I'm not sure why the downvotes, you're basically correct. I really don't care much whether it's a person or a computer driving me around. What I care about is the price. People seem to implicitly assume that autonomous driving will make getting driven around really cheap. But all you're really doing is taking a ~minimum wage driver out of the loop. A good starting point for costs is the $0.50ish/mile IRS mileage deduction which is maybe about half Lyft/Uber pricing today. That's a significant difference but I'm not sure it's a radically alter everyone's behavior difference.

notyourday 8y ago

Local on demand delivery service. Optimized and cheap. Packages. People. Files. Food. Drinks. Etc