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> It’s like buying salt at the supermarket. It’s all the same You can say the same about Coca-cola or McDonalds though. They have a ton of competition and are

by lhorie 5y ago

> It’s like buying salt at the supermarket. It’s all the same You can say the same about Coca-cola or McDonalds though. They have a ton of competition and are most certainly not dead. I don't really buy the argument that competition is all that problematic for Uber. Worst comes to worst, taxis made money, so IMHO there's no reason to believe Uber couldn't settle at doing what taxis did in terms of profitability, at a bare minimum.

MBCook 5y ago
Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different. Same with McDonalds vs Burger King. There are differences, you’re buying different products in the same category. But if I take Lyft, Uber, or use a taxi app it’s all the sane in the end. Start at point A, get out at point B. It may be a different car. One driver may be better. The only REAL difference is the price. In fact we know a lot of drivers drive for multiple services, so your experience may literally be identical!
- lhorie 5y ago
  > Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different There was a study that actually concluded most people can't tell the difference between Coke and Pepsi. And there are similar examples across many product lines: Sprite vs 7up, Dasani vs Aquafina, etc. All of these beverage companies are similar, and cost of switching between brands for colas or bottled water is zero. So why aren't we talking about how COKE is oh so bad of a stock to own? IMHO, it's because switching cost isn't zero, and things like market dominance and brand play a non-zero role. My point is mostly that COKE doesn't need to monopolize the market to be profitable, and neither does Jarritos, and that similarly, there's no reason to think Uber requires global scale to be profitable when taxis were doing just fine before.
chadcmulligan 5y ago
thats not true, Coke and McDonalds have barriers to entry - supply chains, buildings etc. Even if you're saying the taste of the food is not unique. Uber has no products/supply chains except for their app, its just randos signing up on the internet and driving with their own car. There are three local apps competing with Uber, and fairly successfully.
- MBCook 5y ago
  I was referring to the barrier of entry for the consumer, not the producer. I think we may be in agreement.
Ekaros 5y ago
But could either of those raise their prices by 25-50% and still keep their market share? Probably not. They are different from Uber that they are making money and have for very long time... While remaining price competitive compared to other players on market. Uber can't afford that in long run.

by lhorie 5y ago

MBCook 5y ago

Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different. Same with McDonalds vs Burger King. There are differences, you’re buying different products in the same category. But if I take Lyft, Uber, or use a taxi app it’s all the sane in the end. Start at point A, get out at point B. It may be a different car. One driver may be better. The only REAL difference is the price. In fact we know a lot of drivers drive for multiple services, so your experience may literally be identical!

lhorie 5y ago
> Coke vs Pepsi are different. Same basic category (cola soft drink) but they taste different There was a study that actually concluded most people can't tell the difference between Coke and Pepsi. And there are similar examples across many product lines: Sprite vs 7up, Dasani vs Aquafina, etc. All of these beverage companies are similar, and cost of switching between brands for colas or bottled water is zero. So why aren't we talking about how COKE is oh so bad of a stock to own? IMHO, it's because switching cost isn't zero, and things like market dominance and brand play a non-zero role. My point is mostly that COKE doesn't need to monopolize the market to be profitable, and neither does Jarritos, and that similarly, there's no reason to think Uber requires global scale to be profitable when taxis were doing just fine before.

chadcmulligan 5y ago

thats not true, Coke and McDonalds have barriers to entry - supply chains, buildings etc. Even if you're saying the taste of the food is not unique. Uber has no products/supply chains except for their app, its just randos signing up on the internet and driving with their own car. There are three local apps competing with Uber, and fairly successfully.

MBCook 5y ago
I was referring to the barrier of entry for the consumer, not the producer. I think we may be in agreement.

Ekaros 5y ago

But could either of those raise their prices by 25-50% and still keep their market share? Probably not. They are different from Uber that they are making money and have for very long time... While remaining price competitive compared to other players on market. Uber can't afford that in long run.