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I think I can generalize that the problem with Amazon is similar to many of the modern tech companies in that they're super well funded and aren't expected to m

• lisper 7y ago
  I'm not a huge Uber fan, but in their case at least I don't think you're being entirely fair. My home airport is SFO. The official taxis there have an extremely annoying pricing policy: if your destination is more than 20 miles form the airport they add a $50 surcharge to the cost of your trip. (I live 25 miles away.) And you can't summon a cab with an app. If you're at the airport they are very convenient. If you are anywhere else taxies are hopeless. In the face of such abject stupidity on the part of the taxis, I use Uber (well, Lyft) despite my sympathies for professional drivers. If the taxi companies weren't behaving like such utter and complete morons for years it would be easier to sympathize with them.
  • tj-teej 7y ago
    Serious question: once the taxi industry has died what makes you believe that Uber won't implement similar policies?
    • abakker 7y ago
      Nothing. As the saying goes, “get while the getting is good”. If I don’t take the cheap fare today, it doesn’t buy me anything in the long run anyway. Present dollars saved are a certainty, and if history repeats, there is a reasonable likelihood of future disruption being my easy-our for an anticompetitive Uber.
      • pessimizer 7y ago
        I don't know if it's a good strategy to wait as long as it took Uber to supplant taxis for something to supplant Uber. If it follows that pattern, you won't live to see it, so "easy-out" is probably not the greatest descriptor. That being said, your individual boycott will have a minuscule effect, and money in your pocket is good. I just can't imagine that capitalism is meant to work like this; paying people to use your product until all the competition is gone, then once you're a monopoly jacking prices up to infinity, ditching quality, and regulating or buying out any potential upstarts.
        • abakker 7y ago
          A cynical person might say that it is meant to work exactly like this. Killing off older companies seems likely to be a service to progress and the economy. (not to the employees, which is a reason why I'm not a genuine advocate of pure capitalism). nevertheless, There are organizational, bureaucratic, and process debts in addition to technical debt, and I think capitalism acknowledges that in the end, those debts never get paid. Borrow against the future and burn out bright and fast. The good news, is except for capital itself, borrowing technology/process/and bureaucracy against the future is borrowing from yourself, not creditors.
          • AmericanChopper 7y ago
            Every dollar of funding that Uber receives comes from an investor that believes there is a long term business model in Uber. Even the short horizon investors have to believe that, otherwise they would have nobody to sell their shares to in the short term. In terms of killing competition, price wars almost always benefit consumers. Prices go down during a price war, and if the industry is susceptible to them, then another one will occur after the war is over. Look at the airline industry, it’s full of price war cycles. A carrier will try compete on a route, drive prices down, and sometimes this will result in carriers leaving the competition, and prices going back up again afterwards. When that happens, some time will pass, and it will happen again. The worst outcome for consumers is that the market returns to a non-competitive state when the dust settles. In that case, consumers are just back where they started, after having temporarily enjoyed the benefits of the price war. If the market ends up in an unreasonably non-competitive state after the price war, then the victor has just set themselves up for anti-trust action. Every mainstream capitalist economist I’ve ever heard of has firmly believed that regulating competition is an essential part of a capitalist economy. So if you think that’s not happening, it would seem to be a failure of government more that a failure of capitalist economics.
    • robryan 7y ago
      I don’t think the barrier to entry in a single city market is particularly high. Short of exclusivity on self driving cars I think Uber is only ever one price rise away from losing dominance in a city.
    • yawz 7y ago
      I can ask a similar question: What makes you think that Uber can destroy/prevent the system/model that disrupts another (future) unfair market that it benefitted from? I don't think that Uber is a good example in the original context.
      • pessimizer 7y ago
        Because they can buy out the competition before you've even heard of them?
        • prepend 7y ago
          That didn’t work for taxis.
          • dredmorbius 7y ago
            It did for centuries.
    • anonuser123456 7y ago
      Lyft?
    • jimbokun 7y ago
      Then it's time to apply anti-trust law to Uber. (Assuming Lyft or other companies are no longer viable competitors.)
      • ken 7y ago
        Why not try to apply that to taxis now? Alternatively: why would the government care that a new monopoly replaced what is essentially an old government-approved one?
        • dlgeek 7y ago
          Because they no longer get a massive cut?
    • dahfizz 7y ago
      Uber doesn't have the government protections existing cabs do. If Uber starts mistreating their customers, the customers have plenty of other rideshare alternatives.
    • prepend 7y ago
      I think it will be easier to identify pricing problems with Uber than the 50+ different taxi markets. Uber and Lyft can adjust prices quite easily, while taxi markets require local regulators to approve changes. There’s also an issue that theoretically Uber and Lyft compete, where in every city in the US, pretty much, taxis don’t compete on price once it is set for a market. Uber/Lyft might start having anti-consumer prices once they kill all the taxis, but I think they will be subject to closer scrutiny than trying to take on local taxis.
  • mikeash 7y ago
    Seems quite fair to me. Uber is using VC money to crush competition without worrying about making money. It is also true that traditional taxis suck. This is an orthogonal fact.
  • jiveturkey 7y ago
    take a taxi to the marriot next door. then uber from there.
    • lisper 7y ago
      Having to carry my bags a short distance vs having to transfer then from one vehicle to another is kind of a wash for me in terms of hassle.
      • jiveturkey 7y ago
        in the parent comment, though, you were complaining about the price. transferring your bags would save you $50 if not more.
        • lisper 7y ago
          I was complaining about the arbitrary non-linearity in the cab fare at 20 miles, not really the price per se. But simply taking Uber/Lyft direct from the airport saves me the same $50 plus the cab fare to the hotel.
  • scarface74 7y ago
    How do you know how much Uber would cost if they had to raise their prices high enough to have a marginal profit on each ride?
    • lisper 7y ago
      I would still take Uber (well, Lyft) almost always. There's a lot of added value to me just in the app even if there were no price advantage.
• gamblor956 7y ago
  Tesla can price lower than Ford/Toyota/Merc, lose money every year while the competition slowly dies. Teslas are priced higher than Fords and Toyotas, Tesla loses money every year while its competition rakes in billions in profits every year, and sell more cars each month than Tesla in a year... Wework also rents all of its locations (either from its CEO or from third-party landlords). It has massive liabilities on its books that it can't leverage; the landlords have large liabilities as well but they have the type of liabilities they can (and do) borrow against.
• Florin_Andrei 7y ago
  > Tesla can price lower than Ford/Toyota/Merc, lose money every year while the competition slowly dies. That was a bad example.
  • enjoyyourlife 7y ago
    It was not. They price lower for luxury cars than other companies.
  • m463 7y ago
    I think telsa is basically disruptive. On the other hand, many years ago, I thought there was a complaint about foreign "dumping" to destroy domestic minivan production.
• jamborta 7y ago
  > WeWork can price lower than office buildings, lose money every year while the competition slowly dies. I was looking for office space last week in London, WeWork is the most expensive one on the market by far.
• bmmayer1 7y ago
  That said, none of the companies you mention are monopolies -- they all set prices lower than competitors, not higher, and none of them have little to no competition. In fact every single company in your list included major competitors that make billions of dollars.
• anonuser123456 7y ago
  Yes, interest rates are why technology companies have competitive advantages. Because NO ONE ELSE has access to those interest rates. Just tech companies.
• mbesto 7y ago
  > and aren't expected to make a profit Sorry to be harsh, but this "no profit" trope specifically when it comes to Amazon needs to die in a hot fire. "“Percentage margins are not one of the things we are seeking to optimize. It’s the absolute dollar free cash flow per share that you want to maximize, and if you can do that by lowering margins, we would do that. So if you could take the free cash flow, that’s something that investors can spend. Investors can’t spend percentage margins.” “What matters always is dollar margins: the actual dollar amount. Companies are valued not on their percentage margins, but on how many dollars they actually make, and a multiple of that.” “When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.” Jeff Bezos is very focused on this “absolute dollar free cash flow metric.” You will see many people talk about Amazon’s focus on “growth” vs. margins, but the right focus is instead absolute dollar fee cash flow."[0] Amazon optimizes for FCF and continually reinvests its "profits" back into the company. Check out their FCF: https://www.marketwatch.com/investing/stock/amzn/financials/cash-flow https://www.marketwatch.com/investing/stock/amzn/financials/... > Amazon is similar to many of the modern tech companies in that they're super well funded So you mean Amazon is funding their growth with their customers cash flow? I don't get how that's a problem. If you want to talk about Uber, Lyft, WeWork...that's another thing. The unit economics are just simply not there. Amazon should not be in the same discussion as those companies. [0] - https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-from-jeff-bezos/ https://25iq.com/2014/04/26/a-dozen-things-i-have-learned-fr...
  • snarfy 7y ago
    When you reinvest your profits back into the company, your net profits are zero and you don't pay any taxes. This is where the distortion comes in. It's government subsidized growth. At this point it's grown over all the competitors and affects the market.
    • notyourwork 7y ago
      I think that’s a completely different issue from ops concern regarding not turning a profit.
    • 7y ago
• coding123 7y ago
  Well you're not exactly doing a fair comparison for AirBnB because the actual owner sets the price. AirBNB doesn't set the price. Uber, on the other hand, does.
• ian0 7y ago
  Thats not a monopoly. Thats.. common business sense? I mean even local stores price lower than competitors as a strategy! The fact that there is competitors to all these companies goes to show it isn't a monopoly.
• nickik 7y ago
  > Tesla can price lower than Ford/Toyota/Merc, lose money every year while the competition slowly dies. That is just wrong. Tesla can lower prices (or rather get more profit from EV) because they have strategically invested in the necessary supply chain. The idea that Tesla is systematically losing money from their sales and thus undercutting the competition is seriously wrong. I don't know about those others, but the idea that all those companies are just living of debt sound pretty wrong to me. These companies are more efficent, and that is where they make up the difference.