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The FedEX UPS example doesn't apply because their services are limited by physical infrastructure. The have to buy/lease trucks and distributions centers. Uber
by fred_durst 12y ago
The FedEX UPS example doesn't apply because their services are limited by physical infrastructure. The have to buy/lease trucks and distributions centers. Uber and Lyft have no physical limits so the larger one can always undercut the other out of business once it has enough of a competitive advantage. Once Uber is the name brand service for consumers drivers will no longer have a choice and Uber can price squeeze Lyft to death.
- 6cxs2hd6 12y agoI think another difference is that the bulk of FedEx and UPS customers are businesses -- who typically are smart enough to allocate business among at least two vendors. Short-term this keeps your suppliers honest on price and service. Long-term it hopefully sustains more than 1 supplier. Even when an industry has one "gorilla" (e.g. Intel), business customers will try to sustain at least one "chimpanzee" (e.g. AMD). However this dynamic is missing from consumer businesses.