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People here seem to think that Uber/Lyft do not have any competitive moat. I disagree. What we seem to forget is that just because a VC can burn boatloads of mo

• tsycho 7y ago
  What's SDC? I got nothing obvious from googling it. UPDATE: Got it, self driving cars. I am not deleting the comment in case others were confused as well.
  • omot 7y ago
    Self driving cars
  • jiveturkey 7y ago
    use contextual clues ... Self Driving Car
    • sabertoothed 7y ago
      SDC could have been a company since it was mentioned next to Waymo. I stumbled as well for a few seconds.
    • rootusrootus 7y ago
      SDC as an acronym for self driving car seems to have become a 'thing' on HN very recently, I never noticed it until just the recent past. It's not unreasonable for someone to be ignorant of it.
  • jkahrs595 7y ago
    Most people in the industry use 'AV', or Autonomous Vehicle.
• empath75 7y ago
  Why would anyone want to challenge them to take over a market they’re losing billions of dollars in?
  • tyingq 7y ago
    That was my reaction. I can build a moat by selling anything below cost. But it doesn't really say much about the business viability, and what happens when you raise prices. Does demand shrink, or does another competitor with money to burn undercut you until they are out of money? Or, maybe...things work out. It just doesn't seem to prove much beyond "subsidized pricing is popular".
    • killyp 7y ago
      ie MoviePass. As soon as a unprofitable company loses its investor backing it doesn't matter if they control the majority of the market, they are still doomed.
      • vadym909 7y ago
        No different than airlines. You are only as profitable as your dumbest competitor- someone wise once said
• evrydayhustling 7y ago
  They can be fought in local markets via regulation and specialization. Global brand is expensive, a long-term liability in local politics, and doesn't get them that much in local markets because it is so easy for both drivers and customers to use multiple apps.
• benburleson 7y ago
  They can't just raise prices willy-nilly; taxis still exist.
  • halr9000 7y ago
    Most people I know hate taxis. Uber can nearly raise prices to parity with cabs.
    • scurvy 7y ago
      And as much as people used to hate taxis, the tide is turning to people hating Uber/Lyft more...mainly due to trying to kill passengers, pedestrians, bicyclists at a greater rate since the drivers aren't professionals and rarely know the city they're driving in.
    • RhodesianHunter 7y ago
      Nearly? I'd pay more to not have to use a taxi.
    • BeetleB 7y ago
      When it comes to airports, I prefer taxis. I once got a Lyft driver at the airport who did not have enough room for all our luggage. Taxis generally will, and even if they don't, there is no charge for "canceling".
      • chrononaut 7y ago
        I recently arrived at an airport intending to take a Lyft/Uber out of the vicinity. Tried for 10 to 15 minutes to get a ride on either platform and it would just time out. Eventually opted for a taxi, which were immediately and readily available. Surprisingly it was also 30% cheaper in the end including tip than the quoted price on Uber at the time with surge pricing without tip. The same thing happened on my most recent arrival back home. I am probably going to simply return to taxis at my home airport for now on.
    • mlinsey 7y ago
      Hailing cabs by phone (and later on, using the non-Uber hailing services that interact directly with cabs) never worked as well for me as Uber. Takes too long for them to get there, and the incentive for them to abandon your request and pick up a fare they find on the way is too strong. Taxis only make sense in the very small perecent of the US where you can walk outside and hail one coming down the street.
• sfifs 7y ago
  > no VC will fund their rapid growth (small offerings will still find a niche, assuming they don't get gobbled up And yet Grab and Didi drove Uber out of South East Asia and China, Ola is giving Uber a run for its money in India and now GoJek in turn is challenging Grab. In my recent trip to Tokyo we were mostly advised to take regular cabs Vs Uber in contrast to a year ago. That's literally half the world where they're getting out competed. When reasoning doesn't line up with facts, there are usually flaws in the logic. One possible flaw it turns out is that well off globe trotters or even people who frequently travel across cities in a country and would love to use the same app everywhere likely form a small % of total cab trips. Majority of trips are just local trips by an area's residents. So locally, majority just goes with whoever offers better service and relevance. Cutting Price can trump over these but by going public, bottom line became a lot more important to Uber and Lyft - so this isn't likely a viable strategy. Another possible flaw is that the compute required to support this is likely commoditized and there's not likely as much competitive advantage in data. So it's going to be interesting...
  • koolba 7y ago
    Also nothing stops a “low tech” competitor from skimming local price information from a larger rival and automating their matching. The pricing has to be publicized or else how else would the drivers know?
  • cavisne 7y ago
    They did not get "out competed" in china, a country where competition has nothing to do with success. Likewise in Russia. Grab is the only company to out compete Uber so far.
    • forkLding 7y ago
      Thats bs, you only need to google "china bikesharing competition" to know what it means to compete in China. Startups in China will resort to any means, legal and illegal to bring each other down. A lot of bikesharing companies went bust because people essentially competed to the point of reducing price to wipe out the other competitor. Even if you succeed temporarily, your competitor will clone you and your technology. Its similar in USA but in China its multiplied by the population factor in a region the same area so its more intense. The competition also permeates downwards and creates beasts like the 996.
• rorykoehler 7y ago
  Startups won't win this. Manufacturers will. They have brand, cars, and soon can license the self driving tech. How hard is it for a billion dollar company to roll out a ride hailing app? Think about where that leaves Uber. They have to buy the cars from said manufacturers. This already gives them a significantly larger cost base and let's face it, while they also have a brand it is no more powerful a draw than Mercedes or Toyota.
  • wskinner 7y ago
    Here's a thought experiment: how hard is it for a billion dollar company to roll out a simple crud app? Easy, right? Now name a single major bank with an app that is better than "barely usable". Which is easier? A crud app or a ride hailing app?
    • rorykoehler 7y ago
      All my banks have good apps on par with the fintech startup apps I use (and actually I trust them more because they aren't moving fast and breaking things).
      • HeWhoLurksLate 7y ago
        > and actually I trust them more because they aren't moving fast and breaking things VERY true, not just in finance.
      • wastedhours 7y ago
        Same for me too - my incumbent bank's app is mostly comparable with the latest hot fintech's. The latter has nothing but a slightly more polished visual look, and that's not enough for me to trust them with my paycheck.
      • fuzzybeard 7y ago
        I use a regional bank and their app is only usable for minor day to day things. For that it's fine. But I can't do anything "serious" in it: checking account transactions are limited to only the last 2 weeks; I can't search transactions for a specific amount or merchant or date; I can't view past payments I've made for bills, etc. For any of the above, I have to use the desktop site. These are not technical limitations either and should all be in the app if we want full parity with mobile.
• thisisit 7y ago
  You don't need people to make that point, Uber agrees to it too: The personal mobility, meal delivery, and logistics industries are highly competitive, with well-established and low-cost alternatives that have been available for decades, low barriers to entry, low switching costs, and well-capitalized competitors in nearly every major geographic region. If we are unable to compete effectively in these industries, our business and financial prospects would be adversely impacted.
• lsc 7y ago
  so, as long as investors have appetite to lose money to buy market share? you are, of course, right. But the business cycle goes up, and the business cycle goes down. (I mean, the general trend is upwards, but if you don't think there will be big downturns inbetween, well...) The problem is that yes, uber and lyft have dominance for as long as they are willing to run the business for less money than anyone else; This puts a pretty hard cap on how profitable they can be. (I mean, for an example of a competitor who might be willing to do it for very little over break-even, I've talked with several people who would be interested in setting up a competitor that was operated as a driver's cooperative. I mean, even that isn't workable when uber and lift are losing money, but it would work at profit levels that uber and lyft would consider break-even; such a cooperative could work really well as a break-even business, while investors in both uber and lyft would be super disappointed with a break-even business) Compounding this, the ridesharing space is one that is massively price sensitive. Uber and lyft are so cheap that I've gotten rid of my car, and I use them all the time. But if they raise their rates significantly? I'm gonna go buy a honda and drive myself; They get to duke it out for driving me around when I'm drunk, but we're talking less than 5% of my rides. I suspect I'm not super unusual in this regard.
  • djakjxnanjak 7y ago
    I’m skeptical about a non-profit service competing with Uber and Lyft. It would take a lot of money-losing ride subsidies to get the substantial market share required to get the necessary network effects.
    • lsc 7y ago
      I'm... not sure you'd need a lot of network effects? I mean, you need a critical mass of drivers and riders, but they can be all in a small area and you can still provide a service. I mean, for the occasional user, sure, brand recognition matters; If I'm going from a strange airport to a hotel, I'm probably going to use the brand i know. But usually? I switch from uber to lyft on my daily commute based on saving a few bucks almost every day. (right now, Lyft has some scheme where you can buy a 30-pack of $15 off coupons for $300. But they're used every time you ride lyft, so if you want to go somewhere for less than $15, you use Uber) I mean, 90+% of my rides are areas I ride in a lot, where it would be worth my time to put a fair bit of effort into discovery. I think that on the driver side, there's a lot of drivers with very strong locational preferences, too; If you are in SF and try to get a ride to San Jose, my experience is that 3 out of 4 uber drivers will kick you out of the car when they find out, so I think you might be able to recruit drivers that way, too.
• zby 7y ago
  Ubers problem is that it needs to compete locally: https://thinkgrowth.org/uber-is-going-to-0-and-benchmark-knows-it-1566fb51b308 https://thinkgrowth.org/uber-is-going-to-0-and-benchmark-kno... . A taxi company does not need to challenge Uber globally to compete with it in any given city - because most taxi rides are from local population. This is different from AirBnB - where the customers need something that can be trusted globally.
  • roenxi 7y ago
    I doubt AirBnB actually has a moat either, in practice. I think I'm using the right income - AirBnB's profit margin is something like 3.5% [0]. You don't need much of a moat to defend 3.5% profit margins. JP Morgan is sitting at around 30% [1] - that is the sort of margin that needs a bit of defense. That aside, yeah, Uber has a negative moat; I don't see why the car drivers themselves couldn't band together to make a competing app if the mother company started to take a real cut. [0] https://en.wikipedia.org/wiki/Airbnb https://en.wikipedia.org/wiki/Airbnb [1] https://en.wikipedia.org/wiki/JPMorgan_Chase https://en.wikipedia.org/wiki/JPMorgan_Chase
• nabla9 7y ago
  > From a game theoretic POV, Uber and Lyft have signaled that they're ready to fight for survival in markets they are established in. And fight they have, because they don't have a moat. A moat is a competitive advantage that is _cost_effective_ to defend. Uber/Lyft don't have that.
• lordnacho 7y ago
  They don't have to be outcompeted by another similar entity, though. Their pie could get eaten by lots of small local operators, or by someone like Google with a fleet of self-driving cars.
• freyir 7y ago
  It’s not that Uber can’t be self-sustaining. The problem is that’s not enough to justify their insane valuation. They titillated investors with tales about autonomous vehicles leading to skyrocketing profits. But now the hype over autonomous vehicles has faded, and it seems unlikely that fully autonomous cars will be mainstream any time soon. $100B+ for unprofitable ride shares and lukewarm burrito delivery? If you say so.
• walrus1066 7y ago
  "Uber/Lyft do have a VCs-will-not-race-to-the-bottom-with-them moat, and tomorrow they might as well raise their prices to turn profitable." That's the multi billion $ question, if they hike prices to become profitable, will customers swallow it, or jump to local alternatives. My feeling is the latter, I don't think you get economy of scale for running a taxi business, because your biggest cost is paying local drivers.
  • ddalex 7y ago
    I have several apps on my phone for calling a ride. I usually pick Uber because it's cheapest, but if there is any hint of a surcharge I scan all of the apps to pick the cheapest.
    • icebraining 7y ago
      Same here; Uber isn't even my first choice anymore, between the four we have available (five if you include taxis).
• m1sta_ 7y ago
  1. Be a city council 2. Create an open source competitor for integrated transport management 3. Destroy profit