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Doesn’t Uber have competitors? And why shouldn’t we consider investors part of the market? (Pardon my ignorance if these are dumb questions...)

by cle 7y ago

TeMPOraL 7y ago
It does, but the competitors are having a hard time because Uber can keep undercutting them and staying unprofitable longer than the competitors can stay solvent. > And why shouldn’t we consider investors part of the market? We can, but there are rules of "fair play" to the market that are supposed to be followed. What Uber is doing with SV money is, in saner sectors, called dumping, and generally considered illegal. Somehow it isn't, and even if it was, it probably wouldn't do much, as Uber's whole "rideshare" operation is illegal almost everywhere they run it.
- jquery 7y ago
  >the competitors are having a hard time because Uber can keep undercutting them They keep undercutting Uber, should Uber ignore that? Besides, Uber doesn't set prices significantly below the competitors, it relies on being a superior service with lower wait times and higher vehicle utilization. If you open Uber and Lyft you will typically see very similar prices, with the main difference that Uber can be lower because they are a more efficient service, but Lyft will make up for this by subsidizing rides even more than Uber (something you can see very clearly in their S-1 and quarterly earnings reports).
  - deleted 7y ago
    [deleted]
  - cannonedhamster 7y ago
    No... Uber is not more efficient than a taxi service. They were at one point but now they aren't. Taxi businesses have similar apps, drivers who know the area, and regular hours. If it were more efficient, than they wouldn't have needed all that SV money, they still need SV money while cutting worker wages, commanding a ton of the market, and externalizing most of their costs. There is no way Uber exists without someone dumping money in to keep them artificially in business.
    - jquery 7y ago
      That’s wrong. Uber is more efficient than taxis at keeping each car highly utilized. Real-time utilization of a changing network is not an easy problem to solve. Taxis are empty a much greater percentage of the time than Ubers. I won’t address the rest except to say that’s more a factor of them expanding into other markets or maintaining category position than efficiency.

Doesn’t Uber have competitors? And why shouldn’t we consider investors part of the market? (Pardon my ignorance if these are dumb questions...)

by cle 7y ago

Doesn’t Uber have competitors? And why shouldn’t we consider investors part of the market? (Pardon my ignorance if these are dumb questions...)

TeMPOraL 7y ago

It does, but the competitors are having a hard time because Uber can keep undercutting them and staying unprofitable longer than the competitors can stay solvent. > And why shouldn’t we consider investors part of the market? We can, but there are rules of "fair play" to the market that are supposed to be followed. What Uber is doing with SV money is, in saner sectors, called dumping, and generally considered illegal. Somehow it isn't, and even if it was, it probably wouldn't do much, as Uber's whole "rideshare" operation is illegal almost everywhere they run it.

jquery 7y ago
>the competitors are having a hard time because Uber can keep undercutting them They keep undercutting Uber, should Uber ignore that? Besides, Uber doesn't set prices significantly below the competitors, it relies on being a superior service with lower wait times and higher vehicle utilization. If you open Uber and Lyft you will typically see very similar prices, with the main difference that Uber can be lower because they are a more efficient service, but Lyft will make up for this by subsidizing rides even more than Uber (something you can see very clearly in their S-1 and quarterly earnings reports).
- deleted 7y ago
  [deleted]
- cannonedhamster 7y ago
  No... Uber is not more efficient than a taxi service. They were at one point but now they aren't. Taxi businesses have similar apps, drivers who know the area, and regular hours. If it were more efficient, than they wouldn't have needed all that SV money, they still need SV money while cutting worker wages, commanding a ton of the market, and externalizing most of their costs. There is no way Uber exists without someone dumping money in to keep them artificially in business.
  - jquery 7y ago
    That’s wrong. Uber is more efficient than taxis at keeping each car highly utilized. Real-time utilization of a changing network is not an easy problem to solve. Taxis are empty a much greater percentage of the time than Ubers. I won’t address the rest except to say that’s more a factor of them expanding into other markets or maintaining category position than efficiency.