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Competitors lowering their pricing is not going to magically cause an exodus of customers who are attached to using Uber. Price change would be gradual, if done

Competitors lowering their pricing is not going to magically cause an exodus of customers who are attached to using Uber. Price change would be gradual, if done correctly, imperceptible. Plus, those competitors are being squeezed right now, who knows if they will be around once Uber decides to raise pricing to move towards profit. As they say on Wall Street, the market can stay irrational longer than you can stay solvent. No doubt this saying is apt for this present circumstance, especially since Wall Street is involved. Uber is in the service industry, and winning in the service is not always on price.

erispoe 11y ago
Customer attachement is still a largely unproven hypothesis. How many people in San Francisco have both Lyft and Uber? The cost, as a consumer, to use indifferently one or the other is null. The really hard challenge for Uber is: not becoming a commodity. I have no doubt they can crush incumbent taxi companies. How Uber will avoid being swallowed by the competitive beast they created is another, and harder, challenge.
onion2k 11y ago
Let's assume their strategy works and they win an effective monopoly. What's stopping a "new Uber" coming along, funded by a couple of billion in VC money, to attack Uber's monopoly position by offering the same service cheaper. If winning a market can be done by subsidising your offering with VC cash then someone else will come along and do it as soon as Uber push for higher prices. While there's huge amounts of private equity money available Uber will never be able to raise prices, especially considering there are plenty of investors around who are unhappy about missing Uber's first few rounds.
- pbreit 11y ago
  Reality is the opposite. Uber is building a commanding, monopoly-like position whereby it can raise and lower prices as necessary. Not only does winning a market require way more than subsidies but Uber is also in the best position to subsidize.

erispoe 11y ago

Customer attachement is still a largely unproven hypothesis. How many people in San Francisco have both Lyft and Uber? The cost, as a consumer, to use indifferently one or the other is null. The really hard challenge for Uber is: not becoming a commodity. I have no doubt they can crush incumbent taxi companies. How Uber will avoid being swallowed by the competitive beast they created is another, and harder, challenge.

onion2k 11y ago

Let's assume their strategy works and they win an effective monopoly. What's stopping a "new Uber" coming along, funded by a couple of billion in VC money, to attack Uber's monopoly position by offering the same service cheaper. If winning a market can be done by subsidising your offering with VC cash then someone else will come along and do it as soon as Uber push for higher prices. While there's huge amounts of private equity money available Uber will never be able to raise prices, especially considering there are plenty of investors around who are unhappy about missing Uber's first few rounds.

pbreit 11y ago
Reality is the opposite. Uber is building a commanding, monopoly-like position whereby it can raise and lower prices as necessary. Not only does winning a market require way more than subsidies but Uber is also in the best position to subsidize.