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Uber is an application that helps drivers find passengers (not the other way around). They do not control the costs associated with operating a car service and
by boh 5y ago
Uber is an application that helps drivers find passengers (not the other way around). They do not control the costs associated with operating a car service and so have no chance of engendering the productivity necessary to keep costs down. Their VC subsidized attack on the taxi industry has actually destroyed much of the productivity gains inherent in traditional car service companies who were able to scale car maintenance and other fees (now each individual driver has to manage their own costs).
Uber's only major contribution is an easily reproducible app and considerable market manipulation which it can no longer maintain. If Uber decided to charge what their failed system actually requires for profitability, it would be uncompetitive against traditional car services that actually have the capacity to scale the costs associated with car services.
- make3 5y agotheir moat is that their app is now everywhere, which is worth something. So many other services have easy to copy apps, but it takes years for other apps to beat them. See Facebook, instagram, etc. A good app is really worth something.
- boh 5y agoTheir only moat is capital which has been dwindling.
- make3 5y agoso Facebook could be beat by other apps? a good, popular app is a moat, for a while at least
- boh 5y agoI wouldn't assume all apps have similar competitive circumstances.
- jacobr1 5y agoUber doesn't have the same network effect dynamics. I don't switch from FB to another social network unless a bunch of my friends do. As a consumer, it is very easy for me to install Lyft or Curb or $LocalTaxiApp and switch. There is very little brand loyalty. As a driver is a harder, there is a burden to onboard to a given app service. But I've seen plenty of drivers with simultaneous lyft/uber signs, so I know they are doing it. And driver forums/social-networks are constantly talking about ways to maximize income, so if there is new app that is better many would try it, because they wouldn't need to abandon the older platforms just to try the new one. Bootstrapping having both demand and supply is the hard problem of the two-sided market to scale. Riders and Drivers might try out an app easily enough, but they'll only stick with it if there is enough capacity to market-match (and some cost benefit over the other app-markets).
- make3 5y agoThe inertia comes from the number of drivers too I guess