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I might be missing something here because nobody else brought it up: Is this not just a necessary move to salvage investments in Lyft? Assuming Uber won already

I might be missing something here because nobody else brought it up: Is this not just a necessary move to salvage investments in Lyft? Assuming Uber won already, Lyft investors need to keep it dangerous enough to force a buy out or write it off completely. Keep Lyft alive until Uber is forced to buy it pre/post IPO? At some point the Lyft competition is going to cost Uber more than the price of just buying them out. Please note that I am not a biz guy so if I am wrong I would be very happy for an explanation on how/why.

lexap 12y ago
The industry is big enough for multiple players.
- starmole 12y ago
  It might be, but then it's a commodity! I think the valuation of Uber and Lyft is based very much on a winner takes all model.
  - CamperBob2 12y ago
    To some extent those valuations are based on expectations for the future, where the companies don't even need to employ human drivers. Whoever owns the "Johnnycab" concept twenty or thirty years from now is going to be very profitable.
    - maxerickson 12y ago
      Is a strong brand much of a moat? It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. (For example: Why wouldn't an airport charge local cab owners a small fee to be listed in their registry? Why wouldn't passengers access that registry to save $10?)
      - CamperBob2 12y ago
        It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. That could be another aspect of first-mover advantage: no latecomer will have the same opportunities for regulatory capture that Uber and/or Lyft will have. It's not a question of if the taxicab incumbents will lose their grip on the regulatory process, but when. Whoever takes their place will be able to shut their competitors out, or at least make life hard for them.
  - jasonwocky 12y ago
    Just because an industry supports multiple players doesn't make it a commodity. Commoditization is what happens when the product is widely seen as "good enough" that consumers don't value most of the industry's innovation anymore. If Uber and Lyft run out of profitable ideas, and only have "reduce costs" left as a means to more profits, THEN it's a commodity.
  - tdaltonc 12y ago
    Then someone should write a meta-driving-service app. I tell it where I want to go, and it picks which of the commodities is cheapest. Or I go out driving and it automatically shuffles through the apps to tell me where I can make the most profit.
- JohnLen 12y ago
  Many competitors is good for the users. We have more choices and they will compete to provide the best to the users.
logicallee 12y ago
don't you think it's dangerous to argue from a monopolist position? we have laws against the type of reasoning you think Uber should be using... I'm not sure they are in a position to do as you suggest.
- starmole 12y ago
  I was more thinking about it like Peter Thiel's monopoly: http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://www.wsj.com/articles/peter-thiel-competition-is-for-l... Interestingly he is also a Lyft investor.
diminoten 12y ago
One doesn't chase losses with $540mm, generally.
- jonknee 12y ago
  It depends on the size of the game and this is a really big game.

lexap 12y ago

The industry is big enough for multiple players.

starmole 12y ago
It might be, but then it's a commodity! I think the valuation of Uber and Lyft is based very much on a winner takes all model.
- CamperBob2 12y ago
  To some extent those valuations are based on expectations for the future, where the companies don't even need to employ human drivers. Whoever owns the "Johnnycab" concept twenty or thirty years from now is going to be very profitable.
  - maxerickson 12y ago
    Is a strong brand much of a moat? It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. (For example: Why wouldn't an airport charge local cab owners a small fee to be listed in their registry? Why wouldn't passengers access that registry to save $10?)
    - CamperBob2 12y ago
      It seems the only way there can be much pricing power is onerous regulation preventing others from stepping into the market. That could be another aspect of first-mover advantage: no latecomer will have the same opportunities for regulatory capture that Uber and/or Lyft will have. It's not a question of if the taxicab incumbents will lose their grip on the regulatory process, but when. Whoever takes their place will be able to shut their competitors out, or at least make life hard for them.
- jasonwocky 12y ago
  Just because an industry supports multiple players doesn't make it a commodity. Commoditization is what happens when the product is widely seen as "good enough" that consumers don't value most of the industry's innovation anymore. If Uber and Lyft run out of profitable ideas, and only have "reduce costs" left as a means to more profits, THEN it's a commodity.
- tdaltonc 12y ago
  Then someone should write a meta-driving-service app. I tell it where I want to go, and it picks which of the commodities is cheapest. Or I go out driving and it automatically shuffles through the apps to tell me where I can make the most profit.
JohnLen 12y ago
Many competitors is good for the users. We have more choices and they will compete to provide the best to the users.

logicallee 12y ago

don't you think it's dangerous to argue from a monopolist position? we have laws against the type of reasoning you think Uber should be using... I'm not sure they are in a position to do as you suggest.

starmole 12y ago
I was more thinking about it like Peter Thiel's monopoly: http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://www.wsj.com/articles/peter-thiel-competition-is-for-l... Interestingly he is also a Lyft investor.

diminoten 12y ago

One doesn't chase losses with $540mm, generally.

jonknee 12y ago
It depends on the size of the game and this is a really big game.