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How is it anticompetitive? Charging lower prices means making less profit. If Uber somehow lost money to drive out competitors (an insane strategy), then the ca

How is it anticompetitive? Charging lower prices means making less profit. If Uber somehow lost money to drive out competitors (an insane strategy), then the capital of any bankrupted taxi company could be bought up for cheaper than the company originally paid by someone who could then continue to compete with Uber.

notacoward 4y ago
If a company used its own prior profits, or profits from another product line, to lower prices and drive a competitor out of business before raising prices again, that would be illegal. Why is it any different when the subsidy comes from outside?
thisisnotatest 4y ago
Check out "Uber is a bezzle" by Cory Doctorow. His allegation is this scheme: 1. Early VC funds are used to subsidize Uber rides at a loss to Uber. 2. The deep discounts made Uber attractive to drivers and customers. 3. Uber's soaring popularity attracts more investment in Uber stock. 4. Uber's early investors cash out. Society is harmed as later investors lose their money, Uber drivers who invested in vehicles can no longer get work, public transit ridership is hollowed out, etc.
alexb_ 4y ago
>If Uber somehow lost money to drive out competitors (an insane strategy) This is quite exactly what they did.
danaris 4y ago
Read up on Wal-Mart's practices some time. Selling products or services at a loss in order to drive out competitors is a classic anticompetitive tactic that has killed countless otherwise-successful small businesses.
- surement 4y ago
  what the hell does "anticompetitive" mean? driving competitors out of business is exactly what competition is; and there are still very many competitors to Walmart!
  - danaris 4y ago
    Nnnno; continuing to compete with competitors is what competition is. Once you have driven your competitors out of business, there's no one left to compete with. That's why it's "anticompetitive". And yes; there are still other companies in the same space as Walmart; that's not the point. The point is they drive out competitors in the local area where many of their stores set up, so that if the people who live there want to shop, they have no choice except Walmart. Then they raise prices.
    - surement 4y ago
      > Then they raise prices literally has never happened, it's just a dumb myth that makes no sense, for people who think that e.g. buses don't compete with passenger trains
      - n4r9 4y ago
        In London, Uber raised the base rates 10% in November 2021 and then another 5% in August 2022.
        surement 4y ago
        with no competition?
        n4r9 4y ago
        Uber certainly has most of the rideshare market; I believe around 75% in recent years. It also competes with the local black cabs, with some limited success. With the recent price hikes Uber is no longer always a dramatic saving compared to black cabs, especially during "surge" periods. After ten years of operating at a loss, plus laws being passed about tax enforcement and driver payments, and a sexual abuse scandal, it seems like they've been forced into a bit of a reality check.
habosa 4y ago
> If Uber somehow lost money to drive out competitors (an insane strategy) This is literally what happened.
- surement 4y ago
  no, what happened is they had a product that was better than waiting 45 minutes for a cab you had no idea was on the way or not; and other companies came up with similarly good products like Lyft and Didi and are very much competing with Uber
  - n4r9 4y ago
    That can be true at the same time as Uber operating at a loss in order to push Lyft and others out of the market.
    - surement 4y ago
      that's not the case

notacoward 4y ago

If a company used its own prior profits, or profits from another product line, to lower prices and drive a competitor out of business before raising prices again, that would be illegal. Why is it any different when the subsidy comes from outside?

thisisnotatest 4y ago

Check out "Uber is a bezzle" by Cory Doctorow. His allegation is this scheme: 1. Early VC funds are used to subsidize Uber rides at a loss to Uber. 2. The deep discounts made Uber attractive to drivers and customers. 3. Uber's soaring popularity attracts more investment in Uber stock. 4. Uber's early investors cash out. Society is harmed as later investors lose their money, Uber drivers who invested in vehicles can no longer get work, public transit ridership is hollowed out, etc.

alexb_ 4y ago

>If Uber somehow lost money to drive out competitors (an insane strategy) This is quite exactly what they did.

danaris 4y ago

Read up on Wal-Mart's practices some time. Selling products or services at a loss in order to drive out competitors is a classic anticompetitive tactic that has killed countless otherwise-successful small businesses.

surement 4y ago
what the hell does "anticompetitive" mean? driving competitors out of business is exactly what competition is; and there are still very many competitors to Walmart!
- danaris 4y ago
  Nnnno; continuing to compete with competitors is what competition is. Once you have driven your competitors out of business, there's no one left to compete with. That's why it's "anticompetitive". And yes; there are still other companies in the same space as Walmart; that's not the point. The point is they drive out competitors in the local area where many of their stores set up, so that if the people who live there want to shop, they have no choice except Walmart. Then they raise prices.
  - surement 4y ago
    > Then they raise prices literally has never happened, it's just a dumb myth that makes no sense, for people who think that e.g. buses don't compete with passenger trains
    - n4r9 4y ago
      In London, Uber raised the base rates 10% in November 2021 and then another 5% in August 2022.
      - surement 4y ago
        with no competition?
        n4r9 4y ago
        Uber certainly has most of the rideshare market; I believe around 75% in recent years. It also competes with the local black cabs, with some limited success. With the recent price hikes Uber is no longer always a dramatic saving compared to black cabs, especially during "surge" periods. After ten years of operating at a loss, plus laws being passed about tax enforcement and driver payments, and a sexual abuse scandal, it seems like they've been forced into a bit of a reality check.

habosa 4y ago

> If Uber somehow lost money to drive out competitors (an insane strategy) This is literally what happened.

surement 4y ago
no, what happened is they had a product that was better than waiting 45 minutes for a cab you had no idea was on the way or not; and other companies came up with similarly good products like Lyft and Didi and are very much competing with Uber
- n4r9 4y ago
  That can be true at the same time as Uber operating at a loss in order to push Lyft and others out of the market.
  - surement 4y ago
    that's not the case