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It's covered in the article. When they say "lack of innovation" it's alluding to the fact that nothing Uber does is necessarily exclusive to Uber. Uber is enter

It's covered in the article. When they say "lack of innovation" it's alluding to the fact that nothing Uber does is necessarily exclusive to Uber. Uber is entering into an massive existing market with a low entry barrier and high competition that often already out performs Uber in terms of cost and efficiency.

dmix 7y ago
You could say the same about Facebook when there were a hundred clones available after it was made. Everyone was building social networks back then. Being able to repeat the technology part is a tiny percentage of the business. Which demonstrates a lack of understanding of tech businesses, or business in general.
- discreteevent 7y ago
  I think the writer understands business in general. His main point is that Uber may have innovated in small ways but they failed to innovate in a way that solves the major problems of making a profit in the transport business
- kszxgz 7y ago
  Network effects in social media are high and protect Facebook from competition. Barriers to entry in the taxi industry are lower.
  - lozenge 7y ago
    "Uber incurs huge start-up costs with each new city and country it enters." In other words - people won't use the next Uber unless it has drivers available every time you open the app, but drivers won't be available unless they know there will be riders paying them fares. To fill in the gap, rideshare apps have to pay drivers when they enter a market, even if there are no riders yet.
    - Traster 7y ago
      This is also covered in the article - it costs uber huge sums of money to enter a market because they offer driver incentives that are uneconomical, they have a huge advertiser budget and they use below market rates to achieve growth. It also costs them a lot because they don't move into a market to be in that market, they move into a market to dominate it. That dynamic isn't true for its competitors. Any current driver for Uber can go "fuck this" get an off-the-shelf taxi company app and start working for themselves. Since Uber is paying minimum wage and still making a loss, there's a strong incentive to do this the second Uber raises prices in an area. At which point Uber has to go back to its incentives to regain its dominant position in the market. The result is they can't sustainably raise prices or lower costs without destroying the growth that justifies their tech-like valuation.

dmix 7y ago

You could say the same about Facebook when there were a hundred clones available after it was made. Everyone was building social networks back then. Being able to repeat the technology part is a tiny percentage of the business. Which demonstrates a lack of understanding of tech businesses, or business in general.

discreteevent 7y ago
I think the writer understands business in general. His main point is that Uber may have innovated in small ways but they failed to innovate in a way that solves the major problems of making a profit in the transport business
kszxgz 7y ago
Network effects in social media are high and protect Facebook from competition. Barriers to entry in the taxi industry are lower.
- lozenge 7y ago
  "Uber incurs huge start-up costs with each new city and country it enters." In other words - people won't use the next Uber unless it has drivers available every time you open the app, but drivers won't be available unless they know there will be riders paying them fares. To fill in the gap, rideshare apps have to pay drivers when they enter a market, even if there are no riders yet.
  - Traster 7y ago
    This is also covered in the article - it costs uber huge sums of money to enter a market because they offer driver incentives that are uneconomical, they have a huge advertiser budget and they use below market rates to achieve growth. It also costs them a lot because they don't move into a market to be in that market, they move into a market to dominate it. That dynamic isn't true for its competitors. Any current driver for Uber can go "fuck this" get an off-the-shelf taxi company app and start working for themselves. Since Uber is paying minimum wage and still making a loss, there's a strong incentive to do this the second Uber raises prices in an area. At which point Uber has to go back to its incentives to regain its dominant position in the market. The result is they can't sustainably raise prices or lower costs without destroying the growth that justifies their tech-like valuation.