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There is no network effect. As soon as you pay the drivers more, and charge the riders less, they will install your app. What keeps drivers and riders from chec

There is no network effect. As soon as you pay the drivers more, and charge the riders less, they will install your app. What keeps drivers and riders from checking both Uber and SuperDuperUber apps at the same time to make/save some extra money?

crdoconnor 11y ago
Networks that have a larger customer and driver base can link them up quicker. That means that, at no extra cost to the network, the customer will end up waiting 2 minutes for a cab instead of 40, and the driver will end up waiting 2 minutes for a fare instead of 40. Would you pay extra for those 38 minutes as a customer? I would. Would you accept a lower commission as a driver if you spend less time waiting for fares? I would. As soon as the competitor tries to muscle in, the dominant player can maintain that advantage while dropping their costs and still remain profitable. They can undercut the new player until they go out of business. Realistically speaking, the new players will recognize this built in advantage and will not challenge the monopoly at all unless their pockets are very, very, very deep and they are prepared for a protracted period of heavy losses. Uber is still fighting to gain that monopoly advantage, but it looks like their investors are willing to sustain heavy losses for a long time to get there. Once they do have it, it will become self-sustaining. The more powerful their monopoly power is, the less likely it will be challenged, so the more powerful it will become. At that point they can start milking their customers and drivers and then earn some truly ridiculous profits. Part of the monopoly advantage means that they can covertly punish drivers who choose to use competitors' apps by sending them fewer rides. If it's not already here, this tactic is probably coming very soon.
- quonn 11y ago
  > Part of the monopoly advantage means that they can covertly punish drivers who choose to use competitors' apps by sending them fewer rides. If it's not already here, this tactic is probably coming very soon. If they try this as a monopoly, the Department of Justice will probably start investigating.
  - deleted 11y ago
    [deleted]
  - crdoconnor 11y ago
    This is where political donations come in useful. They can be used to keep the DoJ at bay.

crdoconnor 11y ago

Networks that have a larger customer and driver base can link them up quicker. That means that, at no extra cost to the network, the customer will end up waiting 2 minutes for a cab instead of 40, and the driver will end up waiting 2 minutes for a fare instead of 40. Would you pay extra for those 38 minutes as a customer? I would. Would you accept a lower commission as a driver if you spend less time waiting for fares? I would. As soon as the competitor tries to muscle in, the dominant player can maintain that advantage while dropping their costs and still remain profitable. They can undercut the new player until they go out of business. Realistically speaking, the new players will recognize this built in advantage and will not challenge the monopoly at all unless their pockets are very, very, very deep and they are prepared for a protracted period of heavy losses. Uber is still fighting to gain that monopoly advantage, but it looks like their investors are willing to sustain heavy losses for a long time to get there. Once they do have it, it will become self-sustaining. The more powerful their monopoly power is, the less likely it will be challenged, so the more powerful it will become. At that point they can start milking their customers and drivers and then earn some truly ridiculous profits. Part of the monopoly advantage means that they can covertly punish drivers who choose to use competitors' apps by sending them fewer rides. If it's not already here, this tactic is probably coming very soon.

quonn 11y ago
> Part of the monopoly advantage means that they can covertly punish drivers who choose to use competitors' apps by sending them fewer rides. If it's not already here, this tactic is probably coming very soon. If they try this as a monopoly, the Department of Justice will probably start investigating.
- deleted 11y ago
  [deleted]
- crdoconnor 11y ago
  This is where political donations come in useful. They can be used to keep the DoJ at bay.