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> the company spent its early years building its core technology and delivering a high-end experience with significantly higher prices than incumbent taxi comp

> the company spent its early years building its core technology and delivering a high-end experience with significantly higher prices than incumbent taxi companies. Eventually, though, the exact same technology was deployed to deliver a lower-priced experience to a significantly broader customer base; said customer base was brought on board at zero marginal cost Ironically, this was the plan laid out for Tesla early on. Very expensive Roadster, pretty expensive Model S. Make some cash and build a reputation for how good a luxury electric car can be. Then use that cash to go down market. Of course zero marginal cost does not apply with the Model 3, but they did dramatically lower their own cost-of-materials by the time they released the Model 3, making it profitable at scale. > The takeaway from that Article isn’t that Uber is a model for the rebirth of American manufacturing; rather it’s that you can leverage demand to fundamentally reshape supply Anecdotally, I know that Tesla became an aspirational brand, a dream car for many. A status brand. So the demand was there, and if you could get a "dream car" for $35K USD then why wouldn't you?

Jochim 2y ago
The Uber example is also an outright lie. They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. Then they raised prices beyond their competition to account for their ridiculous overheads.
- renewiltord 2y ago
  Taxis still exist and are still more expensive. You pay for them to use bus lanes in SF and so on. Uber prices are not beyond the competition.
  - samtp 2y ago
    At least in Seattle, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.
    - renewiltord 2y ago
      Ah then it’s regional. In SF it’s typically 30% more expensive in a taxi from the airport to 4th and king.
      - fragmede 2y ago
        it's like $40 to take a car vs like $15 on Bart into the city.
        renewiltord 2y ago
        BART takes 2x the time station to station. Try it out right now. The time is 1256 as of the time of this comment. SFO International to Montgomery St. Station: Earliest arrival is 1346 Driving: Earliest arrival is 1323 My experience is that the car takes ~6 min to arrive to pick you up for Uber. You can call it earlier, but assuming you call it when you arrive and then wait that's 1322. You lose 23 minutes to BART. And that's BART station to BART station. Change it slightly, like to my home near Caltrain and it's pointless. The cost in time is way more than $25.
        fragmede 2y ago
        What are you going to do on your phone in the Uber vs on your phone on your couch when you get home vs your phone on Bart? If you have an important in-person meeting to get to then by all means pay the surcharge but let's be real about how some of us are spending those "saved" minutes. Thank you for doing the math - we're only talking about 23 of them? it's entirely possible to capitalize on 23 minutes, but seriously, 23 minutes?
        renewiltord 2y ago
        Can use your laptop in the car safely. A friend of mine had his laptop yanked on BART. Chap ran off, my friend gave chase, and that guy threw away the laptop. Surprisingly, only dented! But I'd rather not experience that. 28 minute ride vs. 45 minute ride after 10 min wait is pretty large difference IMHO. If no traffic, that's even shorter. For me, from Caltrain station (where I live) to airport I have a record door to gate of 16 min. That's a no planning choice. If I have to make a 45 minute ride I have to plan: take the T-line to Powell, switch to BART, ride down to the airport? Crazy. No chance.
  - acdha 2y ago
    Where I live, Uber is recognized as the high prices option. Once VCs stopped subsidizing rides prices went up and availability went down - it was a running joke for years that at DCA you’d see people waiting in line for 20 minutes to spend $20 more than hopping in a waiting cab.
    - renewiltord 2y ago
      That makes sense for me. I would easily pay $20 more to take an Uber over a cab in SF. The prices are the other way around which is convenient for me. The last time I took a cab from the airport the guy asked me which cross streets and how to get there. That's not my Uber experience. I don't want to be telling this guy how to do his job. I want personal transportation and we can chat about something else if he likes but I want him to use the satnav.
      - acdha 2y ago
        Yeah, there are real regional variations. I think the problem Uber has is that they’re valued like a high-end tech company (with locked in overhead like compensation) but they don’t have much of a competitive moat. They can have a better app and global reach is a plus for frequent travelers, but at the end of the day their profit is anchored by how much a taxi costs – even if the service is better people only value that so much, especially in a down economy like the one just created.
        gopher_space 2y ago
        They've created a business model any metropolitan community can duplicate for practically nothing, and the first community that does so will share their notes with the rest of us. People should be asking themselves if their service is a quango waiting to happen, because most of them definitely are.
      - SoftTalker 2y ago
        For a lot of people $20 is an amount that they will think about spending. Ridiculous to think that a cab driver in 2025 is not using GPS. I don't believe that.
  - piva00 2y ago
    Where I live taxis are on par with Uber, sometimes cheaper when Uber has surge prices. We also have Bolt, an European competitor, which is usually 10-40% cheaper than Uber or taxis. Every Uber or Bolt can also operate as a taxi since the regulations stipulate that any private passenger transport service is the same as a taxi, and has to follow the same regulations.
- cyberax 2y ago
  > They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. That is exaggerated. Uber was losing something like $0.50-$1 per ride in 2018. Uber/Lyft were (and still mostly are) just _better_ than taxis.
  - const_cast 2y ago
    It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. I don’t know if I trust Ubers numbers on this. I don’t know what they’re counting as “cost per ride”. Does engineers salaries factor into that? What about data centers? Advertising? If you factor all of it in, then they’re losing billions.
    - cyberax 2y ago
      > It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. Well, yes. However, the impact of that on the ride cost is exaggerated. > Does engineers salaries factor into that? What about data centers? Advertising? Yes. > If you factor all of it in, then they’re losing billions. And when you divide it by the number of rides, you get into sub-$1 figures.
      - deleted 2y ago
        [deleted]
      - const_cast 2y ago
        > Well, yes. However, the impact of that on the ride cost is exaggerated. Yeah, because they’re losing the money. Meaning YOU’RE not paying it, it’s being lost. Keep in mind this is also with: - uber not providing the capital for their rides. Taxi companies buy taxis, uber says you buy it. - vastly underpaying their work force. - skirting employment laws with gig work - relying on tips! The ride cost doesn’t include tips, despite that being a huge portion of wages!
  - torginus 2y ago
    Uber was a 9 year old company in 2018

Jochim 2y ago

The Uber example is also an outright lie. They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. Then they raised prices beyond their competition to account for their ridiculous overheads.

renewiltord 2y ago
Taxis still exist and are still more expensive. You pay for them to use bus lanes in SF and so on. Uber prices are not beyond the competition.
- samtp 2y ago
  At least in Seattle, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.
  - renewiltord 2y ago
    Ah then it’s regional. In SF it’s typically 30% more expensive in a taxi from the airport to 4th and king.
    - fragmede 2y ago
      it's like $40 to take a car vs like $15 on Bart into the city.
      - renewiltord 2y ago
        BART takes 2x the time station to station. Try it out right now. The time is 1256 as of the time of this comment. SFO International to Montgomery St. Station: Earliest arrival is 1346 Driving: Earliest arrival is 1323 My experience is that the car takes ~6 min to arrive to pick you up for Uber. You can call it earlier, but assuming you call it when you arrive and then wait that's 1322. You lose 23 minutes to BART. And that's BART station to BART station. Change it slightly, like to my home near Caltrain and it's pointless. The cost in time is way more than $25.
        fragmede 2y ago
        What are you going to do on your phone in the Uber vs on your phone on your couch when you get home vs your phone on Bart? If you have an important in-person meeting to get to then by all means pay the surcharge but let's be real about how some of us are spending those "saved" minutes. Thank you for doing the math - we're only talking about 23 of them? it's entirely possible to capitalize on 23 minutes, but seriously, 23 minutes?
        renewiltord 2y ago
        Can use your laptop in the car safely. A friend of mine had his laptop yanked on BART. Chap ran off, my friend gave chase, and that guy threw away the laptop. Surprisingly, only dented! But I'd rather not experience that. 28 minute ride vs. 45 minute ride after 10 min wait is pretty large difference IMHO. If no traffic, that's even shorter. For me, from Caltrain station (where I live) to airport I have a record door to gate of 16 min. That's a no planning choice. If I have to make a 45 minute ride I have to plan: take the T-line to Powell, switch to BART, ride down to the airport? Crazy. No chance.
- acdha 2y ago
  Where I live, Uber is recognized as the high prices option. Once VCs stopped subsidizing rides prices went up and availability went down - it was a running joke for years that at DCA you’d see people waiting in line for 20 minutes to spend $20 more than hopping in a waiting cab.
  - renewiltord 2y ago
    That makes sense for me. I would easily pay $20 more to take an Uber over a cab in SF. The prices are the other way around which is convenient for me. The last time I took a cab from the airport the guy asked me which cross streets and how to get there. That's not my Uber experience. I don't want to be telling this guy how to do his job. I want personal transportation and we can chat about something else if he likes but I want him to use the satnav.
    - acdha 2y ago
      Yeah, there are real regional variations. I think the problem Uber has is that they’re valued like a high-end tech company (with locked in overhead like compensation) but they don’t have much of a competitive moat. They can have a better app and global reach is a plus for frequent travelers, but at the end of the day their profit is anchored by how much a taxi costs – even if the service is better people only value that so much, especially in a down economy like the one just created.
      - gopher_space 2y ago
        They've created a business model any metropolitan community can duplicate for practically nothing, and the first community that does so will share their notes with the rest of us. People should be asking themselves if their service is a quango waiting to happen, because most of them definitely are.
    - SoftTalker 2y ago
      For a lot of people $20 is an amount that they will think about spending. Ridiculous to think that a cab driver in 2025 is not using GPS. I don't believe that.
- piva00 2y ago
  Where I live taxis are on par with Uber, sometimes cheaper when Uber has surge prices. We also have Bolt, an European competitor, which is usually 10-40% cheaper than Uber or taxis. Every Uber or Bolt can also operate as a taxi since the regulations stipulate that any private passenger transport service is the same as a taxi, and has to follow the same regulations.
cyberax 2y ago
> They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them. That is exaggerated. Uber was losing something like $0.50-$1 per ride in 2018. Uber/Lyft were (and still mostly are) just _better_ than taxis.
- const_cast 2y ago
  It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. I don’t know if I trust Ubers numbers on this. I don’t know what they’re counting as “cost per ride”. Does engineers salaries factor into that? What about data centers? Advertising? If you factor all of it in, then they’re losing billions.
  - cyberax 2y ago
    > It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions. Well, yes. However, the impact of that on the ride cost is exaggerated. > Does engineers salaries factor into that? What about data centers? Advertising? Yes. > If you factor all of it in, then they’re losing billions. And when you divide it by the number of rides, you get into sub-$1 figures.
    - deleted 2y ago
      [deleted]
    - const_cast 2y ago
      > Well, yes. However, the impact of that on the ride cost is exaggerated. Yeah, because they’re losing the money. Meaning YOU’RE not paying it, it’s being lost. Keep in mind this is also with: - uber not providing the capital for their rides. Taxi companies buy taxis, uber says you buy it. - vastly underpaying their work force. - skirting employment laws with gig work - relying on tips! The ride cost doesn’t include tips, despite that being a huge portion of wages!
- torginus 2y ago
  Uber was a 9 year old company in 2018