4 ms·

Which is exactly the goal of those unicorns in the first place. Once you've smothered the competition in investor money, you're free to raise prices to profitab

Which is exactly the goal of those unicorns in the first place. Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond. Like ripping out Detroit's streetcars just to sell more cars.

economicslol 6y ago
>Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond. That's the theory at least. How much can Uber realistically raise their prices before people realize that yellow cabs or driving themselves is just too much cheaper to ignore. So they'll have to massively increase prices and subsequently kill off their own userbase. It's a lose lose and I don't think any of these companies expecting to pull this off will survive.
- qppo 6y ago
  I have never once called an Uber because it was cheaper than alternatives. It's more convenient, reliable, and except for certain times transparent about pricing. They can increase the prices significantly and I will continue to use them over cabs.
  - oezi 6y ago
    Sounds like a darn weak moat to build a 58b USD valuation on.
  - usefulcat 6y ago
    Those are all valid points, but from a business perspective the biggest problem for Uber is and always been that their product is fundamentally a commodity. Sure, economies of scale can help, but nothing they can do can change that underlying truth.
  - TheCoelacanth 6y ago
    The real question is whether you will take an Uber for $25 instead of a Lyft for $20.
entangledqubit 6y ago
> Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond. Of course, if a company started raising prices to profitability, perhaps it would be "worthwhile" for another group of investors to come along and start the whole cycle over again with a new - excessively funded - startup.
three_seagrass 6y ago
That's one reason. Another reason is that the market isn't profitable except through economies of scale. Until you've captured the market you'll burn cash on user growth.

economicslol 6y ago

>Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond. That's the theory at least. How much can Uber realistically raise their prices before people realize that yellow cabs or driving themselves is just too much cheaper to ignore. So they'll have to massively increase prices and subsequently kill off their own userbase. It's a lose lose and I don't think any of these companies expecting to pull this off will survive.

qppo 6y ago
I have never once called an Uber because it was cheaper than alternatives. It's more convenient, reliable, and except for certain times transparent about pricing. They can increase the prices significantly and I will continue to use them over cabs.
- oezi 6y ago
  Sounds like a darn weak moat to build a 58b USD valuation on.
- usefulcat 6y ago
  Those are all valid points, but from a business perspective the biggest problem for Uber is and always been that their product is fundamentally a commodity. Sure, economies of scale can help, but nothing they can do can change that underlying truth.
- TheCoelacanth 6y ago
  The real question is whether you will take an Uber for $25 instead of a Lyft for $20.

entangledqubit 6y ago

> Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond. Of course, if a company started raising prices to profitability, perhaps it would be "worthwhile" for another group of investors to come along and start the whole cycle over again with a new - excessively funded - startup.

three_seagrass 6y ago

That's one reason. Another reason is that the market isn't profitable except through economies of scale. Until you've captured the market you'll burn cash on user growth.