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> All this to say, any sort of competition on pricing is totally orthogonal to competition on product. I disagree. Without money-losing subsidies early Uber wo
by AlexandrB 3y ago
> All this to say, any sort of competition on pricing is totally orthogonal to competition on product.
I disagree. Without money-losing subsidies early Uber would have remained in the "Black Cab" market. Quality helps, but most people are not willing to pay a huge premium for it (see the race to the bottom in the airline industry).
It's also a mistake to take the large American city (New York? LA?) cab experience and project it onto the rest of the world. I live in a small-ish (< 1M) Canadian city and I've never experienced any of the listed antics when calling a cab here (and this was before Uber existed). Yet Uber still became quite dominant - probably because, for a long time, it was the cheapest option.
- jen20 3y agoI’ve taken cabs in Canada (Toronto, Vancouver, Montreal, always as a tourist/business traveler) and it was exactly as described. Now that cab companies have somewhat caught up in technology, with pay by phone and app-based booking, I’m prepared to consider them again. Price was never an issue.
- Zaheer 3y agoHaving traveled and taken cabs in many other places of the world I can confidently say Uber/Lyft/Similar apps are miles ahead in user experience than the old way. In other cities (ex. Istanbul) apps haven't quite caught on and the cab experience is much worse.
- coredog64 3y ago9 years ago I spent a significant amount of time in Dublin and was impressed by how the local taxi drivers integrated with Hailo. The app allowed you to call a cab from an out of the way location, you could see where the cab was, and you pay (and tip) in the app. If Yellow Cab had adopted this 10 years ago, Uber would be a cautionary tale like pets.com.
- pigeonhole123 3y agoI read that Hailo ran out of money trying to expand to NYC. I lived in London when it was big and it seemed to just disappear at some point. Failing like that after becoming dominant in London is simply puzzling to me. Sounds like a license to print money once most of the cabs use it.
- disgruntledphd2 3y agoYup, and they had a franchise model so just did the tech. But Uber drove them out of business by setting VC money on fire.
- rndmwlk 3y agoTo say competition on pricing and product are orthogonal is to treat this like some sort of study and completely ignore the real world conditions that these businesses live in. The salient point the author is making is these predatory pricing strategies allow these VC backed firms to capture a market, then the VCs exit and everyone else is holding the bag. It doesn't matter how good your product is if it costs more to run than it brings in it will, eventually, no longer exist. Ultimately, these companies business models absolutely did not outcompete cabs on merits alone; they had a better product that relied on predatory pricing to attract customers.
- scarface_74 3y agoI always wondered about the elasticity of Uber prices. When I’m traveling for business, I don’t care it’s someone else’s money. When I’m on vacation, I expect to spend money. When I’m going out for drinks or just didn’t want to deal with downtown Atlanta traffic and parking when living in the burbs, I also didn’t care. Are price conscious people using Uber?
- Scea91 3y agoIn Prague, price conscious people are using public transport. Then I think most people have multiple apps Uber/Bolt/Liftago and before making a trip they check each for the best deal.