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One-quarter of Uber's business happens in just five cities
- bifrost 8y agoWhy is this a surprise? Its part of the reason it was even invented in the first place...
- voldacar 8y agoHow is this a vulnerability? Shouldn't one expect something like a Pareto distribution to emerge here anyways?
- payne92 8y agoIf any one of those 5 cities decides to regulate more aggressively, it could be an immediate, material negative hit to Uber. Pareto distributions are common in two-sided markets with geographic factors. BUT, when there's a reasonable possibility of extra regulation imposed at the regional level... that's a big risk.
- Shivetya 8y agoWell then, the real need is to determine if Uber's competitors suffer a similar issue or not.
- blakesterz 8y agoThe last line in the article answers that pretty well: "One thing the filing makes clear: It wouldn’t take a global movement to stress the company’s business model. A couple big-city mayors could do that all on their own. "
- kevin_thibedeau 8y agoTheir business model is unconstrained growth to funnel money into side projects. That can't persist forever. If they just stuck to their core business they could easily be profitable as taxi 2.0.
- pwinnski 8y agoIs the net cost of these "side projects" greater than the $1.8B Uber is losing? I'm missing that in the S-1 if so.
- empath75 8y agoit doesn't cost that much to pay off a mayor.
- qmanjamz 8y agoIt's not a vulnerability. It actually shows their revenue is pretty geographically diverse. You can't trust financial news from propaganda outlets like Slate because they only care about their agenda.
- brianzelip 8y ago1. New York 2. Los Angeles 3. San Francisco 4. London 5. São Paulo
- scarmig 8y ago2017 GDP Figures (Trillions USD) USA: 19.39 NYC: 1.72 LAX: 1.04 CHI: 0.68 DFW: 0.54 DCA: 0.53 OMG, almost a quarter of the US's GDP (23%) comes from just five metropolitan areas!
- hackcasual 8y agoSure, and if any of those cities all the sudden decided to no longer produce domestic product, that would be a big risk to the US.
- imgabe 8y agoThe GDP is a measure of all economic activity. I'd say there's a far greater risk that NYC might outlaw ride-sharing specifically, rather than, you know, suddenly decide to stop engaging in commerce altogether.
- thanatropism 8y agoHe's saying: this is why Uber city-ridership as a Zipf law with alpha = X: the economy has a Zipf law with alpha = X. You're saying: this value of alpha presents a concentration of risk for Uber. Yes, you're both saying things that aren't false.
- ggm 8y agoDCA is surely about something other than real productive activity? (I guess people in DC might be making money, I thought they were spending it)
- freehunter 8y agoWhat I'm interested in out of this information (but not interested enough to look it up myself): These five cities account for 1/4 of their business, but how does the population of these five cities compare to all of the cities they do business in? Is this just a straight-line distribution? Basically, do these five cities account for 1/4 of the total population of the cities they do business in?
- sk5t 8y agoI don't know the answer to your question, but some factors that might skew the distribution could be how annoying and expensive it is to keep a car or park in each city, prevalence of recreational activity that encourages or discourages a car or truck, and the like.
- mandevil 8y agoAccording to https://en.wikipedia.org/wiki/List_of_urban_areas_by_population https://en.wikipedia.org/wiki/List_of_urban_areas_by_populat... Tokyo and Seoul (not on the top five Uber list but have Uber presence) are both larger than any city on Uber's top 5 list. Sao Paulo (on Ubers list) is just barely larger than Mexico City (not on the list). Los Angeles (18th largest urban area by population) and London (35th largest urban area by population) are significantly smaller, and the Bay Area is all the way down at 61st, right behind Dallas-Fort Worth (not on Uber's list). So no, those five cities do not make up a disproportionate amount of the total urban population that Uber covers, just a disproportionate amount of the riders.
- freyir 8y agoThese 5 cities are not directly related to Uber. Read again.
- olliej 8y agoAlternatively: one quarter of Uber's annual losses come from those cities :D More seriously: if they increased the cost or reduce pay rate in just those cities they could have a significant profit impact while not impacting market acquisition in the rest of the world.
- anateus 8y agoLooking at that list, the biggest threat to Uber is good (and not overcrowded) public transportation.
- kaycebasques 8y agoWhy are these 5 cities Uber’s top markets? Particularly Sao Paolo.
- forkLding 8y agoLooking at this another way, this one-quarter revenue coming from users in five cities probably is showing these users as the power users of the app so these are probably the least likely to suddenly give up Uber because they already have a habit and Uber is already such a big part of their life.
- mc32 8y agoNYC has definitely always had a taxi "habit" despite their transit. I think London is similar. On the other hand Tokyo (which has one of the best transit systems) has lots if taxis as well, but I guess Über hasn't had much traction compared to local taxis (they've always been clean and offered good service).
- samsonradu 8y agoAbout 3 years ago I've had issues multiple times in Tokyo with taxi drivers not speaking english at all, thus not being able to communicate the destination. I assume Uber would smooth over that aspect as there is literally no need for communication.
- mc32 8y agoI don't doubt that, but foreigners who don't speak some Japanese is a real small percentage of the people who use taxi services. If this were a general problem, then I think Über would likely do better in a place like Tokyo.
- Grue3 8y agoUber is not allowed to compete in Tokyo. When you use Uber, it just calls a normal licensed taxi. The advantage is presumably the fact that it shows your destination to the driver without you having to explain it, but for locals there's literally no advantage.
- tyingq 8y ago"I think London is similar." Taxi culture gets boosted a bit when the city charges you £11.50/day to drive your own car.