4 ms·
Uber is in the position of a network provider, and hence in a position where it can naturally become a monopoly via network effects. Any market with network ef
by nhaehnle 13y ago
Uber is in the position of a network provider, and hence in a position where it can naturally become a monopoly via network effects.
Any market with network effects has high barriers of entry and therefore reduced competition, unless regulation exists to lower the impact of network effects (e.g. mandating interoperability).
- vdaniuk 13y agoThe important part you are missing is that there is already a monopoly on cab services precisely because of regulation. Uber is currently disrupting this monopoly. So what you said, but other way round.
- wisty 13y agoI don't think it's that strong a network. Drivers are businessmen - they aren't going to shun another app just because it's too much trouble to sign up. So there's big no chicken / egg problem - any competing network with half a chance of taking on Uber will get plenty of drivers. It's kind of like eBay stores, not the "sell and buy junk from strangers" eBay. And since there's only one product, the customers won't flock to Uber because they want variety. I'd rate it lower than eBay and far lower than Facebook in terms of the strength of the network.