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"there's nothing sticky about any of their business ventures" Their critical mass of 'drivers' and their brand are hugely sticky, and massive barriers to entry

"there's nothing sticky about any of their business ventures" Their critical mass of 'drivers' and their brand are hugely sticky, and massive barriers to entry. Once Lyft and Uber have made sure that they are the only players, prices will inch up as they de-facto collude together, just like supermarket chains or anything else. If a new entrant in a city tries to challenge them, they'll price way below market value until that challenger is gone, and then bring prices back up. Wins and losses will be on a city-by-city basis, so it's possible that some city, somewhere has a 3rd party that wins out. Like maybe in Texas, due to whatever framework some other entity 'won' and came 1st (i.e. 'in Texas we proudly use 'Whatadriver'!), then it's possible for 3rd parties to exist, but the same rules will apply. This market will settle down, and both Lyft and Uber will cut all of their stupid projects, and then they'll settle into oligarchy type pricing and profits. As far as valuation, that's difficult to tell, but I think they have very viable business models that are not going away. Facebook and Twitter could dissapear as quickly as they came, but Uber/Lyft found a back door into a very ancient market and they have their claws in their now, so they are not going away. They'll be around. It's just a matter of valuation at this point.

toast0 8y ago
Most of the ubers and lyfts I've been in had both apps running. If a third app comes in with decent driver incentives, and can convince google maps to show them, they'll be able to get passengers and drivers. And, as you said, they only need to do it city by city. I will say, when i needed a ride in a more rural area near Seattle, I did go right to Uber, and that driver wasn't on Lyft (but was considering it), so there is some stickiness, but I don't think it's much.
- sonnyblarney 8y ago
  I see your point, but there has been a zillion attempts to do the Lyft/Uber thing and tons of money has already tried. The pie is just to big to ignore. So if hasn't happened already, it's not likely going to happen. So yes, maybe a 'serious competitor' could try in some city, and as you say maybe 'word would travel fast' and maybe it might be possible to get a critical mass of drivers ... but then Uber/Lyft will just undercut them in a war of attrition. To your mini-case: maybe there was a few other 3rd parties in existence, but you possibly never even heard of them. And even if the drivers sign up ... without the demand well there's no game anyhow. It's been commoditized, so the advantage now is scale, brand etc. which the incumbents have, and they have money. That market is done for now, until something comes from a different angle: new tech, new regulation, public transport shift, self driving cars etc.
  - toast0 8y ago
    You can't fight a subsidy war with uber/lyft now while they're still in growth mode. Once investors start demanding profits, and the prices go up, that's the time to come in and spend your money driving people around. Especially if you hear about others doing the same in other cities, or when some of the big loans are coming due. It's a commodity, brand doesn't matter. Scale across cities doesn't really help that much. Money helps, but public market investors don't like to see it being spent quarter after quarter.

toast0 8y ago

Most of the ubers and lyfts I've been in had both apps running. If a third app comes in with decent driver incentives, and can convince google maps to show them, they'll be able to get passengers and drivers. And, as you said, they only need to do it city by city. I will say, when i needed a ride in a more rural area near Seattle, I did go right to Uber, and that driver wasn't on Lyft (but was considering it), so there is some stickiness, but I don't think it's much.

sonnyblarney 8y ago
I see your point, but there has been a zillion attempts to do the Lyft/Uber thing and tons of money has already tried. The pie is just to big to ignore. So if hasn't happened already, it's not likely going to happen. So yes, maybe a 'serious competitor' could try in some city, and as you say maybe 'word would travel fast' and maybe it might be possible to get a critical mass of drivers ... but then Uber/Lyft will just undercut them in a war of attrition. To your mini-case: maybe there was a few other 3rd parties in existence, but you possibly never even heard of them. And even if the drivers sign up ... without the demand well there's no game anyhow. It's been commoditized, so the advantage now is scale, brand etc. which the incumbents have, and they have money. That market is done for now, until something comes from a different angle: new tech, new regulation, public transport shift, self driving cars etc.
- toast0 8y ago
  You can't fight a subsidy war with uber/lyft now while they're still in growth mode. Once investors start demanding profits, and the prices go up, that's the time to come in and spend your money driving people around. Especially if you hear about others doing the same in other cities, or when some of the big loans are coming due. It's a commodity, brand doesn't matter. Scale across cities doesn't really help that much. Money helps, but public market investors don't like to see it being spent quarter after quarter.