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Here's the issue with that argument, though. Platforms win out because of user familiarity, not because they're necessarily the cheapest option. Uber had and

by zhdc1 6y ago

Here's the issue with that argument, though. Platforms win out because of user familiarity, not because they're necessarily the cheapest option. Uber had and still has a large lead on Lyft. They get free advertising all of the time through the media. How difficult is it to accept that you're not going to be number one in every market (but you'll likely remain number one in most markets), spend money wisely to shore up your position when necessary, and do everything you can to stay profitable?

kasey_junk 6y ago
They’ve never been profitable. You can’t stay profitable when your entire unit economics is messed up.
- zhdc1 6y ago
  Their unit economics are fine. They have a gross margin of 6-7% after taking out attributable operating costs (so, IT + customer support + insurance + w/e). Unless if I'm looking at the wrong numbers, they're literally killing themselves on sales, marketing, and driver incentives. It's "stupid" that's killing them, not the dynamics of the ride share market.
  - kasey_junk 6y ago
    Without driver incentives they lose the drivers. Upping prices to compensate the drivers correctly and they lose the customers. They are locked into a classic problem for 2 sided markets with low barriers to entry.
sasasassy 6y ago
Let me offer a bit of anecdotal evidence in response. Where I live, there are about 4 major competitors "Uber" services, and everyone that I know that regularly uses them, just uses whatever is cheapest at any given point. Usually it is to do with what campaign or promo code has been given most recently. My observation is that, yes for the general public there may be only "Uber" or traditional taxis, but those are the people that never use it in the first place. > Platforms win out because of user familiarity, not because they're necessarily the cheapest option. Uber is not a platform for the user. It is a service for basic transportation that costs money, and all car hailing apps offer similar enough experiences with different price tags depending on how fast the company is throwing money away.

by zhdc1 6y ago

kasey_junk 6y ago

They’ve never been profitable. You can’t stay profitable when your entire unit economics is messed up.

zhdc1 6y ago
Their unit economics are fine. They have a gross margin of 6-7% after taking out attributable operating costs (so, IT + customer support + insurance + w/e). Unless if I'm looking at the wrong numbers, they're literally killing themselves on sales, marketing, and driver incentives. It's "stupid" that's killing them, not the dynamics of the ride share market.
- kasey_junk 6y ago
  Without driver incentives they lose the drivers. Upping prices to compensate the drivers correctly and they lose the customers. They are locked into a classic problem for 2 sided markets with low barriers to entry.

sasasassy 6y ago

Let me offer a bit of anecdotal evidence in response. Where I live, there are about 4 major competitors "Uber" services, and everyone that I know that regularly uses them, just uses whatever is cheapest at any given point. Usually it is to do with what campaign or promo code has been given most recently. My observation is that, yes for the general public there may be only "Uber" or traditional taxis, but those are the people that never use it in the first place. > Platforms win out because of user familiarity, not because they're necessarily the cheapest option. Uber is not a platform for the user. It is a service for basic transportation that costs money, and all car hailing apps offer similar enough experiences with different price tags depending on how fast the company is throwing money away.