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> However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch. Yea

> However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch. Yeah, but that puts all value add in waymo or Tesla's hands, not Uber's. Uber will have no advantage, and cannot charge juicy margins.

valuearb 6y ago
Uber will have the largest network of customers and that’s far from trivial to build. It easily costs $2+ per customer to get your app installed on their phone, and takes years to get hundreds of millions of installs.
- lefstathiou 6y ago
  If we can agree that switching costs are low for users, and that the cost of building an autonomous vehicle fleet is very large, then the advantage goes to Google who has both a huge distribution machine (owning Google Maps) and massive amounts of free cash flow to deploy. They could purchase 100k vehicles in a blink of an eye, outfit them with AI, deploy in NYC Chicago Atlanta Austin LA and bam users will convert. They don't need to cover the globe, just the absolute most lucrative cities (which Uber relies on to subsidize smaller cities). Additionally, I am not convinced the transition from largest taxi service to AV will be smooth sailing from a personnel perspective. Not having to manage the politics of a deeply embedded global supply chain is one of Tesla's advantages relative to big auto. At some point, drivers may say F* this in dealing with Uber which Google avoids from the get go.
Jommi 6y ago
The consumers are in Ubers pocket. Wayne and Tesla will be smooching to be Uner's chosen one. Businesses are demand based, not supply based.
- windexh8er 6y ago
  I'm not sure you're considering how fickle riders are. I work in a (what used to be) high travel group of tech. Most all of my peers and I are heavy rideshare users. Honestly, we don't care who the app owner is, but want the rides to be consistent and reliable. None of my peers is tied to Lyft or Uber, even with promotions and "status" gimmicks. If a ride can show up 3 minutes faster on Lyft - I'm taking that over Uber. To say the consumers are in Uber's pocket is ill informed. If you're taking hundreds or thousands of rides a year and aren't paying for any of those rides - the ride share company has little to no bearing on your choice. It's not like flying an airline where there's significant advantages to reap.
  - Jommi 6y ago
    I worked directly in the space and I can tell you you're overestimating your "persona"s portion on the market. Also, why so you think that car is arriving faster for you on another app? They're running more bonuses at timeframe, e.g. it's more costly. The airline example is great. Because that's exactly the direction ridehailing is going. Just look at Uber rewards. At least with an airline you actually book weeks in advance. With ridehailing you're buying super close to the actual event. Beieeve me, Uber has done one thing well and that's consumer ToM..
  - lhorie 6y ago
    I often hear people say ubers tend to be easier/faster to get than lyfts. When I visited Japan last year, I wasn't going to bother finding out what competitors existed. Just firing up the uber app is no-brainer in comparison. This is similar to the dichotomy of McDonald's being almost universally considered bad junk food, yet they are packed in roadside locations in small towns because they are popular rest areas among travellers whereas local mom-and-pop competitors are far less successful. Brand is a powerful thing.
  - listenallyall 6y ago
    You are discounting the difficulty of getting typical consumers (not "high travel group of tech") to install a 3rd, 4th, 5th app to perform the same function that Uber and Lyft already do. And when you are in a hurry, you might check 2 apps, but will you check and compare 5?
- randomsearch 6y ago
  Businesses are a function of supply and demand
  - Jommi 6y ago
    But most evidence is pointing to the chicken-egg game starting from the demand side :)
majormajor 6y ago
I wouldn't be too worried about Tesla if I was Uber. Even if they get the hardware first without competition it would be a massive undertaking to build out a competitive transport business. The capital costs to create a fleet to have similar hailing times to Uber would be absolutely massive - now you have to buy the car instead of just recruiting a driver - plus they'd have to catch up on the logistics to try to pay for a tens-of-thousands-of-dollars car 5-to-20 bucks at a time. Waymo is more interesting since things like Google Maps routing and Waze being under the same roof give them a ton of logistics expertise to potentially tap, Alphabet also has a shitton of capital if they wanted to expend it, and they could look at it as a long play where they aren't just getting the cost of the ride back, but they're also collecting all the data. (However, it's not clear to me that this is much more data than Google already HAS just from phone location history.
- lumost 6y ago
  barring a change in interest rates, established companies with the ability to borrow should have effectively limitless capital to deploy. We're arguably at a unique point in history with respect to small businesses ability to add leverage to throw around megacap capex e.g. WeWork Unless TSLA or Waymo decided that they didn't want to deal with a taxi network there shouldn't be any reason they couldn't form an independent company to absorb the loan risk ( with a PE partner potentially ).
- KaoruAoiShiho 6y ago
  Tens of billions is not really that massive in 2020.
- tachyonbeam 6y ago
  Tesla's plan is to have an option, after you purchase or lease the car, to make it available as part of the Tesla network. This is something you could likely enable from the Tesla app on your smartphone. That way, they don't need to pay for any vehicles to build a fleet. They have a huge advantage, being a vertically integrated automaker.
- josecyc 6y ago
  Not really, Uber has accumulated around 3 million drivers, Tesla has around 1 million cars with FSD capabilities and growing much faster than Uber. Tesla has the advantage that their fleet would be composed with their owned cars plus customer cars, my prediction would be that they would quickly becoming bigger than Uber's fleet of drivers once they have FSD and with a click of a button you could send your car to make money for you.

valuearb 6y ago

Uber will have the largest network of customers and that’s far from trivial to build. It easily costs $2+ per customer to get your app installed on their phone, and takes years to get hundreds of millions of installs.

lefstathiou 6y ago
If we can agree that switching costs are low for users, and that the cost of building an autonomous vehicle fleet is very large, then the advantage goes to Google who has both a huge distribution machine (owning Google Maps) and massive amounts of free cash flow to deploy. They could purchase 100k vehicles in a blink of an eye, outfit them with AI, deploy in NYC Chicago Atlanta Austin LA and bam users will convert. They don't need to cover the globe, just the absolute most lucrative cities (which Uber relies on to subsidize smaller cities). Additionally, I am not convinced the transition from largest taxi service to AV will be smooth sailing from a personnel perspective. Not having to manage the politics of a deeply embedded global supply chain is one of Tesla's advantages relative to big auto. At some point, drivers may say F* this in dealing with Uber which Google avoids from the get go.

Jommi 6y ago

The consumers are in Ubers pocket. Wayne and Tesla will be smooching to be Uner's chosen one. Businesses are demand based, not supply based.

windexh8er 6y ago
I'm not sure you're considering how fickle riders are. I work in a (what used to be) high travel group of tech. Most all of my peers and I are heavy rideshare users. Honestly, we don't care who the app owner is, but want the rides to be consistent and reliable. None of my peers is tied to Lyft or Uber, even with promotions and "status" gimmicks. If a ride can show up 3 minutes faster on Lyft - I'm taking that over Uber. To say the consumers are in Uber's pocket is ill informed. If you're taking hundreds or thousands of rides a year and aren't paying for any of those rides - the ride share company has little to no bearing on your choice. It's not like flying an airline where there's significant advantages to reap.
- Jommi 6y ago
  I worked directly in the space and I can tell you you're overestimating your "persona"s portion on the market. Also, why so you think that car is arriving faster for you on another app? They're running more bonuses at timeframe, e.g. it's more costly. The airline example is great. Because that's exactly the direction ridehailing is going. Just look at Uber rewards. At least with an airline you actually book weeks in advance. With ridehailing you're buying super close to the actual event. Beieeve me, Uber has done one thing well and that's consumer ToM..
- lhorie 6y ago
  I often hear people say ubers tend to be easier/faster to get than lyfts. When I visited Japan last year, I wasn't going to bother finding out what competitors existed. Just firing up the uber app is no-brainer in comparison. This is similar to the dichotomy of McDonald's being almost universally considered bad junk food, yet they are packed in roadside locations in small towns because they are popular rest areas among travellers whereas local mom-and-pop competitors are far less successful. Brand is a powerful thing.
- listenallyall 6y ago
  You are discounting the difficulty of getting typical consumers (not "high travel group of tech") to install a 3rd, 4th, 5th app to perform the same function that Uber and Lyft already do. And when you are in a hurry, you might check 2 apps, but will you check and compare 5?
randomsearch 6y ago
Businesses are a function of supply and demand
- Jommi 6y ago
  But most evidence is pointing to the chicken-egg game starting from the demand side :)

majormajor 6y ago

I wouldn't be too worried about Tesla if I was Uber. Even if they get the hardware first without competition it would be a massive undertaking to build out a competitive transport business. The capital costs to create a fleet to have similar hailing times to Uber would be absolutely massive - now you have to buy the car instead of just recruiting a driver - plus they'd have to catch up on the logistics to try to pay for a tens-of-thousands-of-dollars car 5-to-20 bucks at a time. Waymo is more interesting since things like Google Maps routing and Waze being under the same roof give them a ton of logistics expertise to potentially tap, Alphabet also has a shitton of capital if they wanted to expend it, and they could look at it as a long play where they aren't just getting the cost of the ride back, but they're also collecting all the data. (However, it's not clear to me that this is much more data than Google already HAS just from phone location history.

lumost 6y ago
barring a change in interest rates, established companies with the ability to borrow should have effectively limitless capital to deploy. We're arguably at a unique point in history with respect to small businesses ability to add leverage to throw around megacap capex e.g. WeWork Unless TSLA or Waymo decided that they didn't want to deal with a taxi network there shouldn't be any reason they couldn't form an independent company to absorb the loan risk ( with a PE partner potentially ).
KaoruAoiShiho 6y ago
Tens of billions is not really that massive in 2020.
tachyonbeam 6y ago
Tesla's plan is to have an option, after you purchase or lease the car, to make it available as part of the Tesla network. This is something you could likely enable from the Tesla app on your smartphone. That way, they don't need to pay for any vehicles to build a fleet. They have a huge advantage, being a vertically integrated automaker.
josecyc 6y ago
Not really, Uber has accumulated around 3 million drivers, Tesla has around 1 million cars with FSD capabilities and growing much faster than Uber. Tesla has the advantage that their fleet would be composed with their owned cars plus customer cars, my prediction would be that they would quickly becoming bigger than Uber's fleet of drivers once they have FSD and with a click of a button you could send your car to make money for you.