6 ms·

The industry is big enough for multiple players.

by lexap 12y ago

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.

The industry is big enough for multiple players.

by lexap 12y ago

The industry is big enough for multiple players.

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.