4 ms·

> which by virtue of network effects probably tends towards monopoly Uber could dominate their market the way that Google dominates search, but for both compan

> which by virtue of network effects probably tends towards monopoly Uber could dominate their market the way that Google dominates search, but for both companies (and unlike, say, Facebook), the switching cost for users is essentially zero. Drivers would lose their built-up reputation by switching, and would have to spend the time to be vetted by their new agency, but these are somewhat low switching costs. Maybe I'm wrong, but I'm just not seeing network-effect-driven monopoly power here. I can see advantages coming from a strong brand driven by nationwide (and international) reputation, and from battle hardened business practices and from economies of scale...

GeneralMayhem 12y ago
Drivers won't move to a new service that has no demand. Customers won't use a service that has 15+ minute wait times when they could be in an Uber in 3. Google can reasonably claim not to have a forcing monopoly because they and their competitors are directly providing all of the relevant value, so a competitor (Microsoft, Yahoo) could provide exactly the same service even while Google continues to exist. Uber and co. don't directly provide anything, and only work with the existence of a driver/consumer network. If they paid drivers directly for their time and not just on commission, it would be different, but then it wouldn't be Uber.
- thinkling 12y ago
  Drivers can run more than one app and be in more than one network. Similarly, customers can check NewApp for drivers, and if no driver is close enough, use OldApp as a fallback. I don't want to argue that there is no network effect at all, but it's not clear to me that the lock-in is strong.
qq66 12y ago
The network effect becomes very large if you start introducing significant discounts for carpooling, as Uber has done. The chance of finding a carpool partner and getting a 40% discount are much higher for Uber than a competitor, and will be a big hurdle to market entry.

GeneralMayhem 12y ago

Drivers won't move to a new service that has no demand. Customers won't use a service that has 15+ minute wait times when they could be in an Uber in 3. Google can reasonably claim not to have a forcing monopoly because they and their competitors are directly providing all of the relevant value, so a competitor (Microsoft, Yahoo) could provide exactly the same service even while Google continues to exist. Uber and co. don't directly provide anything, and only work with the existence of a driver/consumer network. If they paid drivers directly for their time and not just on commission, it would be different, but then it wouldn't be Uber.

thinkling 12y ago
Drivers can run more than one app and be in more than one network. Similarly, customers can check NewApp for drivers, and if no driver is close enough, use OldApp as a fallback. I don't want to argue that there is no network effect at all, but it's not clear to me that the lock-in is strong.

qq66 12y ago

The network effect becomes very large if you start introducing significant discounts for carpooling, as Uber has done. The chance of finding a carpool partner and getting a 40% discount are much higher for Uber than a competitor, and will be a big hurdle to market entry.