3 ms·

I’m bullish on ridesharing as a segment but bearish on uber and Lyft, simply because I think both have been run like landgrabs - large VC backed pushes to jumps

I’m bullish on ridesharing as a segment but bearish on uber and Lyft, simply because I think both have been run like landgrabs - large VC backed pushes to jumpstart demand and find drivers. In this case though I think the land won’t stay “grabbed”. Every driver I have seen is driving for both services and would add a third if someone told them about it and it payed equitably, so I think all the work uber and Lyft have done to make a market can be leveraged by third party competitors if they start dialing up prices to become more profitable. And I think they will need to do that to meet their valuations. This isn’t like Facebook where a larger network acts like a moat keeping competitors out. Instead, I think it actively makes a market for competitors- the friction for drivers is pretty small, and I don’t know the friction involved for getting users to download another app but I imagine it’s pretty low. Because the drivers are the same it’s a commodity, and switching between apps costs me nothing. Disclaimer: I probably don’t know what I am talking about.

millisecond 8y ago
I think you’re totally right, until you consider the shared/pool options. Those can be both really cheap and really profitable if you have the density.
linkregister 8y ago
I agree that neither riders nor drivers have any affinity toward the ride sharing platforms beyond cost and availability. That said, the incumbent in an area typically wins due to the chicken and egg problem of riders and drivers. Didi vs. Uber, Grab vs. Uber, Uber vs. Juno, etc. Lyft's market share is as high as it is because they invented the ride sharing category. Uber's market share is higher because the Uber Black service was present in more cities, so it could use its existing operations staff and rider network (and lobbying presence).
- mattnewton 8y ago
  But the chicken and egg problem is partially solved by having lots of chickens already around laying eggs for other services. So I only have to convince people already driving to download my third-driver-app, and then riders have chickens. There is some evidence of this happening in places like Austin.

millisecond 8y ago

I think you’re totally right, until you consider the shared/pool options. Those can be both really cheap and really profitable if you have the density.

linkregister 8y ago

I agree that neither riders nor drivers have any affinity toward the ride sharing platforms beyond cost and availability. That said, the incumbent in an area typically wins due to the chicken and egg problem of riders and drivers. Didi vs. Uber, Grab vs. Uber, Uber vs. Juno, etc. Lyft's market share is as high as it is because they invented the ride sharing category. Uber's market share is higher because the Uber Black service was present in more cities, so it could use its existing operations staff and rider network (and lobbying presence).

mattnewton 8y ago
But the chicken and egg problem is partially solved by having lots of chickens already around laying eggs for other services. So I only have to convince people already driving to download my third-driver-app, and then riders have chickens. There is some evidence of this happening in places like Austin.