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Does Uber even want to encourage people to take more rides if each single one is at a loss? It's hard to envision the strategy going forward.
by JMTQp8lwXL 7y ago
Does Uber even want to encourage people to take more rides if each single one is at a loss? It's hard to envision the strategy going forward.
- acchow 7y agoYes, they want to eat up the whole market until all the competitors die. Then they can raise prices.
- JMTQp8lwXL 7y agoWith that strategy, Uber might run out of cash before the competition is crushed.
- rhizome 7y agoThey are way into debt financing and have a $25B bottom line, this is a "when you owe the bank a million dollars..." situation now, nobody involved is going to let it run out of money and throw the whole house of cards away.
- JMTQp8lwXL 7y agoCorrect me if I'm wrong, but that sounds like sunk cost fallacy.
- rhizome 7y agoI'm not surprised.
- speedplane 7y ago> Uber might run out of cash before the competition is crushed. True, but time scales matter. Given their current position, it might take 20 years for that to happen. By then, who knows where they or the market will be.
- ulfw 7y agoAnd then new competitors will spring up who can undermine those prices. There is absolutely nothing unique about what Uber does to keep people as customers.
- dragonwriter 7y agoA dominant two-sided market has strong network effects, since new suppliers want to be where the buyers already are and vice versa.
- vkou 7y agoIf the drivers are contractors, then they can install both apps. If they are employees, Uber is thoroughly fucked.
- busymom0 7y agoSure but there are quite significant competitors around. Lyft is a major one in the US. But countries like India and China, Uber can't even survive as the competition is beating them to it.
- alkonaut 7y agoMain competitor here is traditional taxi (can be hailed, paid and tracked through app, has dozens of competing operators, has nice cars). If Uber would raise prices their only appeal would vanish. If I take an Uber instead of a taxi it’s solely because Uber investors sponsor my ride. The taxi experience is 100% the same thing. I don’t think this is a great business model.