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>When it became clear that Uber's strategy (under Kalanick anyway) was premised on replacing drivers with AIs before the cash ran out I couldn't see general sel
by SilasX 7y ago
>When it became clear that Uber's strategy (under Kalanick anyway) was premised on replacing drivers with AIs before the cash ran out I couldn't see general self-driving vehicles coming within 20 years. I still say that's true.
Even so, this never made sense as a business strategy, unless Uber somehow has a comparative advantage in achieving self-driving cars and then can get a long monopoly on them.
If they don't -- if others have SDCs around the same time, then sure, their costs go way down, but they can also charge a lot less, because the competition has the same "advantage"!
It's like:
"Hey, man, do you really think your grocery store can make those superhuge profits when you sell at the wholesale price?"
'Oh, no, I have a plan. You know those barcodes they're putting on products now? I'm going to invent a way to integrate that with the checkouts, and boom, I don't have to pay for people to put price tags on. Labor costs go way down!'
Same problem: "No, you're not. Someone better at that will, and they'll sell the tech to all grocery stores."
There was never a reason to believe Kalanick's operation as it stood in 2010/11 had that comparative advantage, so that strategy never made sense. And today, not surprisingly, Uber is one of the worst at SDCs, and is correspondingly unlikely to have that advantage.
- perl4ever 7y agoI think you mean competitive advantage, not comparative. I got a D in my only economics class, but I think that I've seen comparative advantage used to mean that "X is better at doing Y than doing Z", whereas competitive advantage is "X is better at doing Y than Z is at doing Y". If you're not using it as jargon, then the fact that it is jargon might be confusing.
- SilasX 7y agoIf you’re going to insist on proper jargon, you might want to refresh first. Comparative advantage [1] in X means you suffer a lower opportunity cost (forgone profit from what you could have done) to produce X than others. A canonical example would be the doctor who is a better secretary than their secretary (produces more value per hour, looking only at secretarial value). The secretary still has a comparative advantage in secretarial labor because they forgo $0 of doctor income to work that job, while the doctor would forgo $100/hour they could be earning as a doctor in order to work as a secretary. This is true even though the doctor has an absolute (or competitive) advantage in secretarial work. The real test for whether something is financially optimal is if you have a comparative, not absolute advantage. Uber not having a competitive/absolute advantage in SDCs would also be a reason not to do it, because of the details of this case, but comparative advantage is correct as well, though perhaps an unnecessarily strong criterion for the point I needed to make. [1] https://en.wikipedia.org/wiki/Comparative_advantage https://en.wikipedia.org/wiki/Comparative_advantage
- perl4ever 7y ago"Comparative advantage [1] in X means you suffer a lower opportunity cost" Yes, however I don't see a relevant difference between that and my phrasing. It still looks to me as though you were clearly describing a lack of competitive advantage, while using the word comparative. Sure, you can discuss comparative advantage if you want.