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It's not cannibalizing their market, it's exploding it. Currently, I will use uber infrequently because it's fairly cheap, half the price of a typical cab ride
by swombat 12y ago
It's not cannibalizing their market, it's exploding it. Currently, I will use uber infrequently because it's fairly cheap, half the price of a typical cab ride (and by contrast, I would say I use cabs rarely, when I have no other choice). If it becomes 1/10th the price of a typical cab ride, I would probably use it at every opportunity, all the time. More than 10x my current usage? Yes, probably.
- ThomPete 12y agothats great it just doesent help the drivers. They are not lacking rides they are lacking revenue from those rides.
- dougabug 12y agoThe flaw in this thesis is that Uber charges 25% of the fare, plus fees, while the driver takes on the cost of the vehicle (depreciation, maintenance, finance), gas, parking, and pretty much everything else. If you get rid of the drivers, then Uber has to pay for all of that. That would be vastly more expensive, riskier, and if passengers really did expect prices to drop 5x, operating margins would evaporate. Making 25% off of somebody else's capital and labor is a pretty good trick, I don't see Uber or anyone else getting a better deal than that.