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> will spell the doom of Uber and Lyft Car sharing isn't going anywhere. It's too convenient. The prices will rise, the number of drivers and passengers will f

by mevile 7y ago

> will spell the doom of Uber and Lyft Car sharing isn't going anywhere. It's too convenient. The prices will rise, the number of drivers and passengers will fall and the companies will shrink, but they'll still be around. I have trouble seeing suddenly seeing a day when there's no car share service because they all finally went belly up.

loganfrederick 7y ago
The question is: will Uber and Lyft always be the entities leading car-ordering apps? Hypothetically, Uber and Lyft stock prices could collapse, Google and Apple buy them, respectively, and then they could become features in Google and Apple Maps, as opposed to standalone companies and apps. Sure, there are additional logistics, city management, back-end processing pieces that are not trivial. But the customer app experience certainly can be replicated as companies like Via have done, and Google and Apple could afford the transition costs of taking over all the behind-the-scenes logistics. Not saying this will happen, but it's an illustration of how car-sharing survives but Uber and Lyft do not.
- tedsanders 7y ago
  I mean, even in this scenario the company still exists, just with a different brand. They'll still have the same code, the same infrastructure, the same users. If Facebook buys Oculus, that doesn't mean Oculus stops existing. It just means Oculus is now owned by Facebook.
  - loganfrederick 7y ago
    Correct, the main difference (in my mind, open to other arguments) is how financial resources are allocated. Right now, Uber and Lyft are burning a ton of money on customer acquisition with the goals of gaining enough scale to be sustainable, independent companies. Relating this back to the great-grandparent post, there's an alternative: Google and Apple could use their existing brand recognition and software reach to maintain wide-scale car-ordering apps without having to spend as much (certainly still some) and with bigger balance sheets to take any short term financial hits. Then they could let the supply (drivers and the cost of rides) and demand (how many customers will pay for non-VC subsidized cars) play itself out over time, instead of the Uber/Lyft model of trying to juice both sides of the marketplace with excess spend.
    - bredren 7y ago
      Would the only future for these products be a mix of human and autonomous fleets? And eventually, purely autonomous? If so, does this presuppose Apple’s vision is to include mass transportation as (a major) part of its products?
  - simonh 7y ago
    In a strictly legal and technical sense yes, but IMHO a company going down the toilet that is sold for parts at a loss hasn’t really survived in any meaningful sense.
kbenson 7y ago
I can totally see a situation where a new entrant comes in at a point where the system stabilizes, and can be quickly profitable, if only slightly, but survive, while Uber and Lyft are contending with extreme pressure of what is essentially soft debt. Do any of Uber or Lyft's investors want those companies to by in a super competitive market where the profits are thin? Maybe that pressure causes them to make wild swings that are much more risky. How rationally will investors approach their investment?
tptacek 7y ago
I don't think car sharing will go extinct either, but be careful with your analyses. Uber and Lyft are precariously balanced on a system of (substantial) low-income demand, high-income demand, and subsidy. If prices rise, low-income demand plummets, ending subsidies. High-income pricing could rise significantly higher than you might expect, at which point you no longer have "ride sharing" so much as you have private car services with app hailing instead of phone hailing, and, like NYC in the 1990s, so expensive that most people will only use it to get to the airport.
- ghaff 7y ago
  It seems pretty reasonable to assume that equilibrium looks like taxis and private cars with app hailing. Personally, it wouldn't affect my usage much; I just use these services when I'm traveling because they're better experiences for the most part than taking a cab. But, anecdotally, a fair number of urbanites regularly use Uber/Lyft instead of public transit or just because they don't want to drive. Presumably, significantly increasing prices would lose casual users who are using these services because they're a bit more convenient.
  - tptacek 7y ago
    I think it's important to remember that a big part of the value prop of these services is that when you open the app to hail a car, you're pretty much assured of getting that car within 15 minutes or so. Change the current equilibrium much and that benefit might go away. I could hail a cab by phone before Uber, but, in Chicago, where we have pretty reasonable cab service (certainly light years better than SFBA's), it would often take multiple attempts and involve a 30+ minute wait. You could reliably get a private car in NYC, but, as I recall from all the times I worked in NYC, you weren't getting that car in 15 minutes.
    - ghaff 7y ago
      Fair point. Around where I live, they seem pretty scarce the few times I've looked at the app out of curiosity. I don't know how long a typical pickup would take. But there's certainly some density level of drivers/passengers below which the market doesn't work. In fact, any percentage decrease presumably decreases service everywhere to some degree and shrinks the areas where Uber/Lyft can effectively operate at all. I do use private cars but pretty much to get back and forth to the airport.
AnimalMuppet 7y ago
I could see Uber and Lyft being still around, with one or both of them having gone through a bankruptcy. Alternately, with one or both having their stock price crater.
- kbenson 7y ago
  Just as the on-demand ride service was disrupted by ride-sharing, I see ride-sharing ready to be disrupted by an on-damand ride service aggregator. If Uber and Lyft are like arilines, what happens when a travelocity equivalent enters the game? Does all that market position that was bought through VC money matter if all of a sudden many (or most!) your fares are being viewed side by side with every competitor that feels like being in that market? What matters more to a consumer of these services, the past good behavior of the companies they've used, or the fact that it's a dollar cheaper and picks you up a minute earlier, or in a nicer car? Even if they are reticent to use an unknown company, everyone knows Uber and Lyft, and the damage done to the VC funded low-fare strategy just by showing those two head to head would be enormous. And what happens when entry is that easy and localities start forming co-op groups to provide the benefits of Uber or Lyft but funnel all profits back to the drivers? All I can say is that I'm grateful for the VC backers of Uber and Lyft for their generous donations.
AlexMuir 7y ago
By 'Car sharing' I think you mean taxis. Ride sharing is a tiny fraction of their business. To be fair, one could make the same argument about Pets.com. People will always need dog food, it will always be inconvenient to get it from the shop. But here we are 20 years on and I'd say online delivery of pet supplies across the world is virtually non-existent.
- esoterica 7y ago
  What makes you think it’s non existent? All the pet owners I know order their supplies online. It’s no different from any other form of online shopping, which is ubiquitous.
- maxxxxx 7y ago
  I order pet stuff online all the time. I look at it at Petsmart and keep ordering from them online.
shinyshoes 7y ago
I think, for me, the idea is that these companies aren't really gunning to make profits immediately and all are really in the play to get to automated taxis. I'd assume automation of the vehicles plummets labor costs and then subsidizing the prices due to increased rider volume would be permissible. That may be in the 10-15 year range, but I think they'll float along until something like that occurs. It's just a matter of time. But I'm just a wild speculator.
onion2k 7y ago
Saying car sharing is here to stay is not the same as saying Uber and Lyft will last forever.
mikorym 7y ago
IIRC this is how Uber started. They catered for some kind of "bespoke" customer that was more than happy to pay a lot. Another relevant question is what Uber will look like in developing countries where keeping the prices low is necessary even for the middle / upper middle class.
- Jommi 7y ago
  Its easy in developing countries where income inequality is so big that there are people willing to provide the service for little less than dirt.

by mevile 7y ago

loganfrederick 7y ago

The question is: will Uber and Lyft always be the entities leading car-ordering apps? Hypothetically, Uber and Lyft stock prices could collapse, Google and Apple buy them, respectively, and then they could become features in Google and Apple Maps, as opposed to standalone companies and apps. Sure, there are additional logistics, city management, back-end processing pieces that are not trivial. But the customer app experience certainly can be replicated as companies like Via have done, and Google and Apple could afford the transition costs of taking over all the behind-the-scenes logistics. Not saying this will happen, but it's an illustration of how car-sharing survives but Uber and Lyft do not.

tedsanders 7y ago
I mean, even in this scenario the company still exists, just with a different brand. They'll still have the same code, the same infrastructure, the same users. If Facebook buys Oculus, that doesn't mean Oculus stops existing. It just means Oculus is now owned by Facebook.
- loganfrederick 7y ago
  Correct, the main difference (in my mind, open to other arguments) is how financial resources are allocated. Right now, Uber and Lyft are burning a ton of money on customer acquisition with the goals of gaining enough scale to be sustainable, independent companies. Relating this back to the great-grandparent post, there's an alternative: Google and Apple could use their existing brand recognition and software reach to maintain wide-scale car-ordering apps without having to spend as much (certainly still some) and with bigger balance sheets to take any short term financial hits. Then they could let the supply (drivers and the cost of rides) and demand (how many customers will pay for non-VC subsidized cars) play itself out over time, instead of the Uber/Lyft model of trying to juice both sides of the marketplace with excess spend.
  - bredren 7y ago
    Would the only future for these products be a mix of human and autonomous fleets? And eventually, purely autonomous? If so, does this presuppose Apple’s vision is to include mass transportation as (a major) part of its products?
- simonh 7y ago
  In a strictly legal and technical sense yes, but IMHO a company going down the toilet that is sold for parts at a loss hasn’t really survived in any meaningful sense.

kbenson 7y ago

I can totally see a situation where a new entrant comes in at a point where the system stabilizes, and can be quickly profitable, if only slightly, but survive, while Uber and Lyft are contending with extreme pressure of what is essentially soft debt. Do any of Uber or Lyft's investors want those companies to by in a super competitive market where the profits are thin? Maybe that pressure causes them to make wild swings that are much more risky. How rationally will investors approach their investment?

tptacek 7y ago

I don't think car sharing will go extinct either, but be careful with your analyses. Uber and Lyft are precariously balanced on a system of (substantial) low-income demand, high-income demand, and subsidy. If prices rise, low-income demand plummets, ending subsidies. High-income pricing could rise significantly higher than you might expect, at which point you no longer have "ride sharing" so much as you have private car services with app hailing instead of phone hailing, and, like NYC in the 1990s, so expensive that most people will only use it to get to the airport.

ghaff 7y ago
It seems pretty reasonable to assume that equilibrium looks like taxis and private cars with app hailing. Personally, it wouldn't affect my usage much; I just use these services when I'm traveling because they're better experiences for the most part than taking a cab. But, anecdotally, a fair number of urbanites regularly use Uber/Lyft instead of public transit or just because they don't want to drive. Presumably, significantly increasing prices would lose casual users who are using these services because they're a bit more convenient.
- tptacek 7y ago
  I think it's important to remember that a big part of the value prop of these services is that when you open the app to hail a car, you're pretty much assured of getting that car within 15 minutes or so. Change the current equilibrium much and that benefit might go away. I could hail a cab by phone before Uber, but, in Chicago, where we have pretty reasonable cab service (certainly light years better than SFBA's), it would often take multiple attempts and involve a 30+ minute wait. You could reliably get a private car in NYC, but, as I recall from all the times I worked in NYC, you weren't getting that car in 15 minutes.
  - ghaff 7y ago
    Fair point. Around where I live, they seem pretty scarce the few times I've looked at the app out of curiosity. I don't know how long a typical pickup would take. But there's certainly some density level of drivers/passengers below which the market doesn't work. In fact, any percentage decrease presumably decreases service everywhere to some degree and shrinks the areas where Uber/Lyft can effectively operate at all. I do use private cars but pretty much to get back and forth to the airport.

AnimalMuppet 7y ago

I could see Uber and Lyft being still around, with one or both of them having gone through a bankruptcy. Alternately, with one or both having their stock price crater.

kbenson 7y ago
Just as the on-demand ride service was disrupted by ride-sharing, I see ride-sharing ready to be disrupted by an on-damand ride service aggregator. If Uber and Lyft are like arilines, what happens when a travelocity equivalent enters the game? Does all that market position that was bought through VC money matter if all of a sudden many (or most!) your fares are being viewed side by side with every competitor that feels like being in that market? What matters more to a consumer of these services, the past good behavior of the companies they've used, or the fact that it's a dollar cheaper and picks you up a minute earlier, or in a nicer car? Even if they are reticent to use an unknown company, everyone knows Uber and Lyft, and the damage done to the VC funded low-fare strategy just by showing those two head to head would be enormous. And what happens when entry is that easy and localities start forming co-op groups to provide the benefits of Uber or Lyft but funnel all profits back to the drivers? All I can say is that I'm grateful for the VC backers of Uber and Lyft for their generous donations.

AlexMuir 7y ago

By 'Car sharing' I think you mean taxis. Ride sharing is a tiny fraction of their business. To be fair, one could make the same argument about Pets.com. People will always need dog food, it will always be inconvenient to get it from the shop. But here we are 20 years on and I'd say online delivery of pet supplies across the world is virtually non-existent.

esoterica 7y ago
What makes you think it’s non existent? All the pet owners I know order their supplies online. It’s no different from any other form of online shopping, which is ubiquitous.
maxxxxx 7y ago
I order pet stuff online all the time. I look at it at Petsmart and keep ordering from them online.

shinyshoes 7y ago

I think, for me, the idea is that these companies aren't really gunning to make profits immediately and all are really in the play to get to automated taxis. I'd assume automation of the vehicles plummets labor costs and then subsidizing the prices due to increased rider volume would be permissible. That may be in the 10-15 year range, but I think they'll float along until something like that occurs. It's just a matter of time. But I'm just a wild speculator.

onion2k 7y ago

Saying car sharing is here to stay is not the same as saying Uber and Lyft will last forever.

mikorym 7y ago

IIRC this is how Uber started. They catered for some kind of "bespoke" customer that was more than happy to pay a lot. Another relevant question is what Uber will look like in developing countries where keeping the prices low is necessary even for the middle / upper middle class.

Jommi 7y ago
Its easy in developing countries where income inequality is so big that there are people willing to provide the service for little less than dirt.