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Aside from the fact that you're arguing that "company wipes out competition, raises prices" is some sort of fantasy and not standard business practice: How is U

Aside from the fact that you're arguing that "company wipes out competition, raises prices" is some sort of fantasy and not standard business practice: How is Uber not a practical example? VC-backed startup, out-competed traditional rivals using VC cash to undercut them, jacked prices and dropped quality once they had established dominance. Uber and Lyft decimated the taxi industry. Taxi drivers lost but so did the public; we ended up with wildly variable rates, extremely discriminatory service (virtually zero handicapped accommodations), uninspected vehicles, background checks that were a joke, no licensing, no government agency responsible for keeping an eye on them, and no accurate metering (any cyclist with a bike computer will tell you that GPS and wheel-measured distance almost never line up.) In my city, you could call up the police department's livery unit and they would investigate reports of illegal driving, unsafe vehicles, lost property, etc. Companies like FAANG don't move in to a new tech space and succeed because of "substantially better / innovative new business models." They usually have an inferior ripoff but it dominates because they can leverage their existing infrastructure, brand recognition, PR relationships, and giant piles of cash to pump into it until it succeeds. This Indian entrepreneur is bleeding cash undercutting these local salesmen, and if it takes long enough, someone like Amazon will come in and do the same thing to him. But if he pulls it off, he's going to drop the one-day delivery and 15% price discount like a bad habit, guaranteed.

rsj_hn 5y ago
That is some weird alt-history. In San Francisco, before Uber, this was the situation of the taxi industry: - It was routinely a 2-3 hour wait to get a cab on Friday or Saturday night - Rampant discrimination by cabbies who would always ask you where you are going and would refuse to take you if they didn't like the answer. They would frequently refuse to pick up black passengers (pretending they didn't see you on the street). Very few cabs had disability support. - Cabs were old, in poor condition, sometimes dirty. Sometimes they were also new and nice, but there was no quality control. - Significant problems with cabbies yelling at passengers, not bathing, smoking in their cabs, and generally being surly. - Cabbies were under-insured and also poor background checks. - Side payments to the dispatcher and other bribes were common to get the high paying airport jobs - cab rides cost about 40% more than now - The city made hundreds of thousands per medallion as they auctioned off the right to be a cab and artificially restricted supply. - There was no opportunity for part time cabbies -- you needed to pick a shift and then drive that shift. You could not set your own hours. This created a situation where there weren't enough cars on weekends because the number of medallions were fixed. - Cab companies earned insane profit margins - 50% margins was not unusual for Yellow. Basically all of the above issues were substantially improved by Uber and Lyft. You can get a ride anytime with 10 minutes of waiting or less, and you (usually) pay less. Lyft is a bit in between Uber and regular taxis in that it is usually more expensive but does not have the same surge spikes, trading off wait time for prices. The system of rating cabbies gets rid of those who smoke in the cab or don't shower, or don't keep the car clean. Just a massive increase in driver professionalism and politeness. Uber and Lyft were one of the few ways that blacks and minorities could regularly get rides as the platform did not allow discrimination. The platform also checked the routes to limit the number of riders being ripped off. Uber also has dedicated disability rides that you can select from. And for the drivers, you can now work any hours that you want, you do not need to pay a gate and so risk is reduced. Just an overwhelmingly positive improvement that significantly increased quality of life for san francisco riders and opened up new income earning opportunities to those who were locked out of the medallion system.
roenxi 5y ago
> How is Uber not a practical example? Uber is consistently losing money, as it has been for several years now. It is an example of that strategy failing spectacularly - Uber was able to gain market dominance and has been spectacularly unable to translate that into actual money. Financially speaking, all they've managed to do so far is give away billions of dollars.

rsj_hn 5y ago

That is some weird alt-history. In San Francisco, before Uber, this was the situation of the taxi industry: - It was routinely a 2-3 hour wait to get a cab on Friday or Saturday night - Rampant discrimination by cabbies who would always ask you where you are going and would refuse to take you if they didn't like the answer. They would frequently refuse to pick up black passengers (pretending they didn't see you on the street). Very few cabs had disability support. - Cabs were old, in poor condition, sometimes dirty. Sometimes they were also new and nice, but there was no quality control. - Significant problems with cabbies yelling at passengers, not bathing, smoking in their cabs, and generally being surly. - Cabbies were under-insured and also poor background checks. - Side payments to the dispatcher and other bribes were common to get the high paying airport jobs - cab rides cost about 40% more than now - The city made hundreds of thousands per medallion as they auctioned off the right to be a cab and artificially restricted supply. - There was no opportunity for part time cabbies -- you needed to pick a shift and then drive that shift. You could not set your own hours. This created a situation where there weren't enough cars on weekends because the number of medallions were fixed. - Cab companies earned insane profit margins - 50% margins was not unusual for Yellow. Basically all of the above issues were substantially improved by Uber and Lyft. You can get a ride anytime with 10 minutes of waiting or less, and you (usually) pay less. Lyft is a bit in between Uber and regular taxis in that it is usually more expensive but does not have the same surge spikes, trading off wait time for prices. The system of rating cabbies gets rid of those who smoke in the cab or don't shower, or don't keep the car clean. Just a massive increase in driver professionalism and politeness. Uber and Lyft were one of the few ways that blacks and minorities could regularly get rides as the platform did not allow discrimination. The platform also checked the routes to limit the number of riders being ripped off. Uber also has dedicated disability rides that you can select from. And for the drivers, you can now work any hours that you want, you do not need to pay a gate and so risk is reduced. Just an overwhelmingly positive improvement that significantly increased quality of life for san francisco riders and opened up new income earning opportunities to those who were locked out of the medallion system.

roenxi 5y ago

> How is Uber not a practical example? Uber is consistently losing money, as it has been for several years now. It is an example of that strategy failing spectacularly - Uber was able to gain market dominance and has been spectacularly unable to translate that into actual money. Financially speaking, all they've managed to do so far is give away billions of dollars.