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They’re valued on growth, so if they decide to stop growing their valuation will plummet. If they raise prices then quantity of rides will go down. If quantity

They’re valued on growth, so if they decide to stop growing their valuation will plummet. If they raise prices then quantity of rides will go down. If quantity of rides goes down, it becomes harder to earn a living as a driver. If it is harder to earn a living as a driver, there are fewer drivers. If there are fewer drivers, then the cost of drivers goes up. Not to mention the fact that if uber becomes 10% more expensive a large chunk of those customers will just go to lyft.

kelnos 7y ago
If Uber pays drivers more than Lyft to a point where drivers stop driving for Lyft, riders won't be able to get a ride on Lyft, so they'll pay Uber's higher prices. Not everyone will; some will opt for a regular taxi, driving themselves, or transit. But I suspect that there is actually some combination of higher ride prices and higher driver salaries that will keep Uber alive and growing, though probably not at the same rate.
- zizee 7y ago
  I believe that you have the power dynamic reversed. I.e. The drivers will go where the customers are more than the customers will go where the drivers are. A driver only gets paid if a passenger rides. If Uber increases the costs of their rides over a competitor, the the customers will opt to the competition.
fdye 7y ago
Honestly, the price increase on both platforms recently has pushed my household (Wife + Me) back to Muni/Driving. Previously, if one of us used ride sharing it was ~$5-8 each way. Now for the same ride we regularly hit $12-20. It was so bad the last week of my wife using them that she paid ~$18-20 each way, when I reminder her that that was $200 for the week just to get to work, she was shocked. At 4 weeks in the month thats a decent Mercedes payment, getting close to insurance+gas locally. Now we only use it for the occasional night out where we just factor in the expense as entertainment. These services only have a marginal value that is approximately 2-3x public transit. In SF that is Muni at $2.50-$3, so $5-9 one way. Once you cross the $10 and creep into $15-20, you have a problem and the business crashes and burns. In my twenties I remember working at a bar near chinatown. I would get off and my feet would be killing me. It was only maybe 6-8 blocks up Sutter to get to my old place, but every once in a while I would waste money on a Taxi. I remember it killing me that they started the meter at $3.50 and it would end like $8-10. Always felt like if they just flat rated it at $5 for my 6-8 blocks, I would take it everyday to and from (Uber sort of did just that and I rode it like crazy for a while), but at $10 it was a special treat and the rest of the time I schlepped up Sutter, feet be damned.

kelnos 7y ago

If Uber pays drivers more than Lyft to a point where drivers stop driving for Lyft, riders won't be able to get a ride on Lyft, so they'll pay Uber's higher prices. Not everyone will; some will opt for a regular taxi, driving themselves, or transit. But I suspect that there is actually some combination of higher ride prices and higher driver salaries that will keep Uber alive and growing, though probably not at the same rate.

zizee 7y ago
I believe that you have the power dynamic reversed. I.e. The drivers will go where the customers are more than the customers will go where the drivers are. A driver only gets paid if a passenger rides. If Uber increases the costs of their rides over a competitor, the the customers will opt to the competition.

fdye 7y ago

Honestly, the price increase on both platforms recently has pushed my household (Wife + Me) back to Muni/Driving. Previously, if one of us used ride sharing it was ~$5-8 each way. Now for the same ride we regularly hit $12-20. It was so bad the last week of my wife using them that she paid ~$18-20 each way, when I reminder her that that was $200 for the week just to get to work, she was shocked. At 4 weeks in the month thats a decent Mercedes payment, getting close to insurance+gas locally. Now we only use it for the occasional night out where we just factor in the expense as entertainment. These services only have a marginal value that is approximately 2-3x public transit. In SF that is Muni at $2.50-$3, so $5-9 one way. Once you cross the $10 and creep into $15-20, you have a problem and the business crashes and burns. In my twenties I remember working at a bar near chinatown. I would get off and my feet would be killing me. It was only maybe 6-8 blocks up Sutter to get to my old place, but every once in a while I would waste money on a Taxi. I remember it killing me that they started the meter at $3.50 and it would end like $8-10. Always felt like if they just flat rated it at $5 for my 6-8 blocks, I would take it everyday to and from (Uber sort of did just that and I rode it like crazy for a while), but at $10 it was a special treat and the rest of the time I schlepped up Sutter, feet be damned.