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It's easy to compete with the company, but hard to compete with the VC money Uber pulls in. Uber's only competitive advantage is the $24b they were given to kee

It's easy to compete with the company, but hard to compete with the VC money Uber pulls in. Uber's only competitive advantage is the $24b they were given to keep them alive. If VCs keep funding Uber, Uber is unstoppable. But as soon as that money runs out, they're just another taxi company. Except they're a taxi company who loses $350 million dollars every month. That's not hard to compete against.

sokoloff 7y ago
Or are they a taxi company that makes $100MM/month and spends $450MM on R&D that they could stop if they aspired to only be a taxi company? (I think UBER is comically over-valued, but I also think their core business is probably quite profitable.)
- freehunter 7y ago
  In this situation I don't think it really matters. If the VC money stopped, Uber would either go out of business or shrink back down to being a taxi company, in which case they have no competitive advantage and no network effects, making switching costs extremely low. Being a more profitable taxi company doesn't mean much when most of your employees are also employees of your competitors, and most of your customers are also customers of your competitors. There's just no lock-in.
- CydeWeys 7y ago
  They're spending a lot of money on subsidizing rides still. More than on speculative R&D.
- nosianu 7y ago
  "R&D" sounds grandiose but what meaning does it actually have in this context? I think that's the bet on autonomous cars? Problem is, they won't be the only one to have them, and not even among the first and best ones it seems. Nor is it clear how anything but complete autonomy could solve their problems. Actually, not even if that actually worked it's clear why Uber's Über-ambitious plans would work out. As far as I can tell that "R&D" money is just wasted - but I'm mainly saying this in order to hear counter-arguments, not because I know (I don't really)...
  - sokoloff 7y ago
    "R&D" typically includes software and application development, so it's probably not all wasted.

sokoloff 7y ago

Or are they a taxi company that makes $100MM/month and spends $450MM on R&D that they could stop if they aspired to only be a taxi company? (I think UBER is comically over-valued, but I also think their core business is probably quite profitable.)

freehunter 7y ago
In this situation I don't think it really matters. If the VC money stopped, Uber would either go out of business or shrink back down to being a taxi company, in which case they have no competitive advantage and no network effects, making switching costs extremely low. Being a more profitable taxi company doesn't mean much when most of your employees are also employees of your competitors, and most of your customers are also customers of your competitors. There's just no lock-in.
CydeWeys 7y ago
They're spending a lot of money on subsidizing rides still. More than on speculative R&D.
nosianu 7y ago
"R&D" sounds grandiose but what meaning does it actually have in this context? I think that's the bet on autonomous cars? Problem is, they won't be the only one to have them, and not even among the first and best ones it seems. Nor is it clear how anything but complete autonomy could solve their problems. Actually, not even if that actually worked it's clear why Uber's Über-ambitious plans would work out. As far as I can tell that "R&D" money is just wasted - but I'm mainly saying this in order to hear counter-arguments, not because I know (I don't really)...
- sokoloff 7y ago
  "R&D" typically includes software and application development, so it's probably not all wasted.