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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 nearb

by 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.
- jcfrei 8y ago
  But Juno is only available in NYC (for now?). I think my points still hold outside of densely populated urban areas.
  - ghaff 8y ago
    Sure. There are density thresholds for any local businesses. I can't even really get Uber around where I live. Maybe there are a few scattered cars but not many. You'd be pretty silly to set up a competing ride-hailing service here. There's probably some critical mass for these services to work well and that's going to have at least some effect on whether it makes sense for a new entrant.
maxxxxx 8y ago
Drivers will jump ship if somebody else offers more money. Uber has no investment in their drivers and no loyalty from them. If they can't make money with their current coverage how do they ever want to make money?
Tiktaalik 8y ago
The friction against this business model as well is that local governments want to reduce congestion, so they're not going to be happy to license services that are significantly increasing the amount of cars on the road.

by jcfrei 8y ago

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.

jcfrei 8y ago
But Juno is only available in NYC (for now?). I think my points still hold outside of densely populated urban areas.
- ghaff 8y ago
  Sure. There are density thresholds for any local businesses. I can't even really get Uber around where I live. Maybe there are a few scattered cars but not many. You'd be pretty silly to set up a competing ride-hailing service here. There's probably some critical mass for these services to work well and that's going to have at least some effect on whether it makes sense for a new entrant.

maxxxxx 8y ago

Drivers will jump ship if somebody else offers more money. Uber has no investment in their drivers and no loyalty from them. If they can't make money with their current coverage how do they ever want to make money?

Tiktaalik 8y ago

The friction against this business model as well is that local governments want to reduce congestion, so they're not going to be happy to license services that are significantly increasing the amount of cars on the road.