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There is a barrier to entry: building a network of drivers. If there is no drives, nobody will buy a ride over your app, drivers will then not install it becau
by zaarn 7y ago
There is a barrier to entry: building a network of drivers.
If there is no drives, nobody will buy a ride over your app, drivers will then not install it because nobody is buying rides.
- TheSpiceIsLife 7y agoWouldn't this also have prevented Uber and others from getting started? I believe there may be a missing element here, namely marketing.
- omeid2 7y agoDrivers are not exactly emotionally attached to Uber, you will be surprised how often they have multiple apps. I regularly see cars with at least two of Uber, Taxify, Ola signs in Sydney.
- icebraining 7y agoWhy wouldn't drivers install it, when it costs them nothing? And then if they're at the end of an uber ride and a notification for the other service pops up, they can take that.
- zaarn 7y agoInstalling an app and entering your bank details for payouts is quite a burden on the driver. Not permanent and not physically but emotionally.
- kbyatnal 7y agoNot just that - you also have to tell drivers you even exist in the first place, and that level of marketing is not cheap.
- icebraining 7y agoIt's not really that expensive, because you can expand city by city, and do local advertising only - billboards, bus ads, etc. We're talking six figures even in the most expensive areas.
- icebraining 7y agoI don't get it, why?
- zaarn 7y agoSigning up for a service requires you hand over some personal details. That is friction. If you want to be a driver, you also need to hand in payment details. More friction. These things are friction because the user has to make not only an active effort to do them but also it gives them time and reason to reevaluate their decision to download the app. Especially when privacy leaks are happening left and right in SV. This in sum comes together as a burden for people to even sin up to your service as drivers.
- icebraining 7y agoI mean, sure, any new product faces some friction, but that's a slender reed to support monopoly ambitions, and it's not the same as claiming drivers won't install it if there are no riders. The reality shows otherwise: my city already has three competitors to Uber, and all of them have enough drivers (the waiting times are similar), without any having made massive ad campaigns. And there's no reason to assume we're a special case.
- masonic 7y agoI think drivers would jump simply to pursue a market realm with far fewer suppliers (initially, at least), knowing they can go back anytime, or toggle between sites in response to incentives.
- zaarn 7y agoI think you overestimate how rational drivers are.
- arcticbull 7y agoEvery driver drives for every service in each city. There's no cost to them doing so. The only thing actually motivating them to stick to one service or another is Uber and Lyft have quota-based payouts promotions. Make your quota, get a bonus. Once they do, though, they're back at timesharing.
- zaarn 7y agoThere is the cost of signing up to each service and entering bank details for payout. Additionally drivers aren't rational market players with perfect information. The quota alone could be enough emotional incentive for a driver to stick to only 2-3 apps.
- arcticbull 7y agoTrue, though that hasn't been my experience in SF. I usually see most cars with both Lyft and Uber stickers, and I'm relaying what each driver I've spoken with has told me. Admittedly it's a small sample size.
- icebraining 7y ago2-3 apps per driver is huge; that might mean 5-6 apps on the market, more than enough to provide fierce competition and keep prices low.
- beejiu 7y agoUber has shot itself in the foot here because the network is not a moat. It is in fact easier to enter the market BECAUSE of the network. For most non-Uber cabs I take, the driver also drives for Uber.