3 ms·

This figure might be wrong but the entire US taxi industry makes a revenue of $11 billion per year. Since US forms about 20% of the world's economy, we can assu

This figure might be wrong but the entire US taxi industry makes a revenue of $11 billion per year. Since US forms about 20% of the world's economy, we can assume the global taxi revenue to be $50 billion. Even if Uber takes in 20% from every ride, I can't imagine them possibly having more than $10 billion in revenue. Assuming Uber forms a 60% monopoly, they won't be making more than $6 billion in revenue. Kindly correct me if I'm completely off here. One way for Uber to overcome this is to bet on the growth of the taxi industry in Asia. But, even in Asia, governments are pouring in massive investments into public infrastructure. When I visit New Delhi, I rarely end up in a cab because the public infrastructure isn't all that bad. Public transportation projects are coming up in even the smallest of Asian cities. If things go well, people won't need an Uber for most occasions because you'll have to wait 5 minutes for a bus/tube/{new disrupter}! This is what might happen. Uber is going to have a massive IPO with a highly overvalued P/E (this is what the VCs are betting on). Then, after a few years, the market will realize that this world is finite, unlike their greed (have twitter's investors started realizing that?). What happens next is that everyone looses. Uber deserves credit, just not this much!! There are other big problems the world must focus on. The short nearsightedness of humans is the biggest obstacle to our own growth.

raldi 12y ago
How big would the ridesharing market be if it became cheaper than car ownership?
- big_astrocyte 12y ago
  We already have a ridesharing system which is much cheaper than car ownership and that system is called Public transport. I'm not entirely sure how Uber could turn into a system cheaper than London's tube or Delhi's metro. Plus, these systems are raising far bigger rounds than the $1.2 billion Uber just raised. Was Uber designed to be the cheapest form of transport? I doubt it. You have pure convenience on one end (car ownership) and pure cost saving on the other (public transport) on the other. The taxi system lies in the middle, so does Uber. Taxis will have a space in the transportation market, just not the biggest space. I might be wrong here!!
  - raldi 12y ago
    Ridesharing has the potential to be cheaper than car ownership while still being as fast and convenient -- or even more fast and convenient. The same can't be said for public transit, except for trips that happen to follow a major train line.
    - big_astrocyte 12y ago
      Major public transport lines are decided based on how people travel. It would be safe to say that a well designed system would cater to 80% of the distance I travel on any given day. That leaves 20% for ride sharing if I don't feel like walking for 15 minutes. So I purchased a nice toyota for about $15,000 about 4 years back. 600 miles per month, 25 mpg, about $100 on gas every month, about $1200 every year. Assuming that I use this car for another year, I paid out $3000 for every year + $1200 on gas=$4200 /year (I'm sure my car will last far more than 5 years). Uber is about a dollar per mile. So every month I would have to pay $600, every year about $7200. You could try and hook me up with another person traveling the exact same route, but that is going to be a very uncertain thing even if you have the relevant technology. Even a small degree of uncertainty will lead me to buy a car. Now if I used public transport, I would pay less than $1000/year. Plus, there wouldn't be much uncertainty. I think the world would be a much more efficient place if we tried to make the $1000 ride more convenient/efficient, than if we tried to bring down the cost of a $7200 ride (although I hope they can do it, would love to see how they do it). I never said ride sharing is all doom and gloom, I'm just saying it will have a smaller space in terms of number of people traveling.
Synroc 12y ago
I think Uber in this case managed to capture a large demographic of people who do not take taxis, but who are willing to pay for Uber, hence the market for Uber in the US is that of $11 billion/year + X billion/year of people who fall in that category. Consider the fact that just last year, Uber had more than $10 billion in transaction (keeping 20% of that as revenue)

raldi 12y ago

How big would the ridesharing market be if it became cheaper than car ownership?

big_astrocyte 12y ago
We already have a ridesharing system which is much cheaper than car ownership and that system is called Public transport. I'm not entirely sure how Uber could turn into a system cheaper than London's tube or Delhi's metro. Plus, these systems are raising far bigger rounds than the $1.2 billion Uber just raised. Was Uber designed to be the cheapest form of transport? I doubt it. You have pure convenience on one end (car ownership) and pure cost saving on the other (public transport) on the other. The taxi system lies in the middle, so does Uber. Taxis will have a space in the transportation market, just not the biggest space. I might be wrong here!!
- raldi 12y ago
  Ridesharing has the potential to be cheaper than car ownership while still being as fast and convenient -- or even more fast and convenient. The same can't be said for public transit, except for trips that happen to follow a major train line.
  - big_astrocyte 12y ago
    Major public transport lines are decided based on how people travel. It would be safe to say that a well designed system would cater to 80% of the distance I travel on any given day. That leaves 20% for ride sharing if I don't feel like walking for 15 minutes. So I purchased a nice toyota for about $15,000 about 4 years back. 600 miles per month, 25 mpg, about $100 on gas every month, about $1200 every year. Assuming that I use this car for another year, I paid out $3000 for every year + $1200 on gas=$4200 /year (I'm sure my car will last far more than 5 years). Uber is about a dollar per mile. So every month I would have to pay $600, every year about $7200. You could try and hook me up with another person traveling the exact same route, but that is going to be a very uncertain thing even if you have the relevant technology. Even a small degree of uncertainty will lead me to buy a car. Now if I used public transport, I would pay less than $1000/year. Plus, there wouldn't be much uncertainty. I think the world would be a much more efficient place if we tried to make the $1000 ride more convenient/efficient, than if we tried to bring down the cost of a $7200 ride (although I hope they can do it, would love to see how they do it). I never said ride sharing is all doom and gloom, I'm just saying it will have a smaller space in terms of number of people traveling.

Synroc 12y ago

I think Uber in this case managed to capture a large demographic of people who do not take taxis, but who are willing to pay for Uber, hence the market for Uber in the US is that of $11 billion/year + X billion/year of people who fall in that category. Consider the fact that just last year, Uber had more than $10 billion in transaction (keeping 20% of that as revenue)