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If Uber "pops" it will be because the ride sharing industry died. There is no scenario where Uber becomes MySpace to a competitor.

Retric 11y ago
There is no scenario that's rather optimistic of you. Don't get me wrong there currently very popular and profitable so they don't need to worry about a Pets.com style crash. However, the barriers to entry are relatively low just look at Lyft. Eventually investors are going to want to get their money back, so they either start issuing dividends or face a hostile takeover.
- uptown 11y ago
  >and profitable Are they? Everything I've read indicates that they are not. http://www.bloomberg.com/news/videos/2015-06-30/uber-loses-money-as-it-grows http://www.bloomberg.com/news/videos/2015-06-30/uber-loses-m...
  - x0x0 11y ago
    Actually, everything I've read says they are in mature cities. Leaked numbers say they're stupendously profitable in their oldest markets: nyc, sf, etc. They are losing money overall because they subsidize drivers when they move into new markets. But the key is always to look at existing markets. The quickest numbers I could find were leaked in 2014. est yearly rev run rate city ======================= ==== $212+mm sf $312 mm nyc $141 mm dc $150 mm chicago ======= ======= $815 mm total http://www.businessinsider.com/uber-revenue-rides-drivers-and-fares-2014-11 http://www.businessinsider.com/uber-revenue-rides-drivers-an... edits: made table
    - uptown 11y ago
      I guess the larger question is how do drivers respond when their rates get dropped after a market is mature. I imagine the answer is different depending on the market.
      - x0x0 11y ago
        Those above cities are, I believe, post rate drops. Also other leaked numbers have said Uber continues to grow. My guess is driver happiness doesn't impact Uber's business much; our economy seems to generate enough desperate people that they have a nearly never ending stream of people willing to drive for $5/hour (a reasonable estimate of an UberX driver's true net comp.)
        uptown 11y ago
        Seems like much of that short-term profit would easily be negated by increased frequency of maintenance due to wear-and-tear on driver vehicles.
- pbreit 11y ago
  Saying the barriers to entry or low is completely uninformed. The incumbent has a massive advantage in driver/rider liquidity that is nearly impossible to overcome. Lyft is the perfect example in that it still massively trails Uber in every one of its markets despising having very deep pockets and for many, a more attractive product.
  - Retric 11y ago
    IMO, Lyft's mistake is attacking more than one market at the same time. Spending 100M to just get NY is a good investment and there are far smaller cities out there with lower barriers to entry. Further, if you can demonstrate that Uber only raises rates after they show up you can build up a lot of hate in the driver’s community. AKA: Uber pays a lot to get ex: NYC and LA drivers, wins both markets, lowers payouts to make money. New competitor shows up in NYC so Uber dramatically raises rates in NYC and not LA. Then, before that competitor moves to LA a lot of drivers are going to get pissed there stuck with low rates. Basically, by attacking one city, Uber is forced to either raise rates in all its cities’ which it can't afford or piss off all their drivers.
ceejayoz 11y ago
> There is no scenario where Uber becomes MySpace to a competitor. Sure there is - the IRS says their drivers are employees and they need to provide multiple years worth of backpay/benefits. Any competitor that's been doing that already wins.
- onewaystreet 11y ago
  It's debatable whether the ride sharing industry can survive if drivers are classified as employees (which is why Uber and others are working on self-driving cars).
  - s73v3r 11y ago
    It's not debatable; there are plenty of companies that do it already.
danielweber 11y ago
If they play it smart Uber will never die, but I've seen lots of companies fail because a competitor showed up and forced them into a vicious cycle of cutting quality to keep profits up, which drove out customers, etc. If the good drivers stop working for Uber because Uber is squeezing them, for example, Uber may get a reputation for having poor drivers.

Retric 11y ago

There is no scenario that's rather optimistic of you. Don't get me wrong there currently very popular and profitable so they don't need to worry about a Pets.com style crash. However, the barriers to entry are relatively low just look at Lyft. Eventually investors are going to want to get their money back, so they either start issuing dividends or face a hostile takeover.

uptown 11y ago
>and profitable Are they? Everything I've read indicates that they are not. http://www.bloomberg.com/news/videos/2015-06-30/uber-loses-money-as-it-grows http://www.bloomberg.com/news/videos/2015-06-30/uber-loses-m...
- x0x0 11y ago
  Actually, everything I've read says they are in mature cities. Leaked numbers say they're stupendously profitable in their oldest markets: nyc, sf, etc. They are losing money overall because they subsidize drivers when they move into new markets. But the key is always to look at existing markets. The quickest numbers I could find were leaked in 2014. est yearly rev run rate city ======================= ==== $212+mm sf $312 mm nyc $141 mm dc $150 mm chicago ======= ======= $815 mm total http://www.businessinsider.com/uber-revenue-rides-drivers-and-fares-2014-11 http://www.businessinsider.com/uber-revenue-rides-drivers-an... edits: made table
  - uptown 11y ago
    I guess the larger question is how do drivers respond when their rates get dropped after a market is mature. I imagine the answer is different depending on the market.
    - x0x0 11y ago
      Those above cities are, I believe, post rate drops. Also other leaked numbers have said Uber continues to grow. My guess is driver happiness doesn't impact Uber's business much; our economy seems to generate enough desperate people that they have a nearly never ending stream of people willing to drive for $5/hour (a reasonable estimate of an UberX driver's true net comp.)
      - uptown 11y ago
        Seems like much of that short-term profit would easily be negated by increased frequency of maintenance due to wear-and-tear on driver vehicles.
pbreit 11y ago
Saying the barriers to entry or low is completely uninformed. The incumbent has a massive advantage in driver/rider liquidity that is nearly impossible to overcome. Lyft is the perfect example in that it still massively trails Uber in every one of its markets despising having very deep pockets and for many, a more attractive product.
- Retric 11y ago
  IMO, Lyft's mistake is attacking more than one market at the same time. Spending 100M to just get NY is a good investment and there are far smaller cities out there with lower barriers to entry. Further, if you can demonstrate that Uber only raises rates after they show up you can build up a lot of hate in the driver’s community. AKA: Uber pays a lot to get ex: NYC and LA drivers, wins both markets, lowers payouts to make money. New competitor shows up in NYC so Uber dramatically raises rates in NYC and not LA. Then, before that competitor moves to LA a lot of drivers are going to get pissed there stuck with low rates. Basically, by attacking one city, Uber is forced to either raise rates in all its cities’ which it can't afford or piss off all their drivers.

ceejayoz 11y ago

> There is no scenario where Uber becomes MySpace to a competitor. Sure there is - the IRS says their drivers are employees and they need to provide multiple years worth of backpay/benefits. Any competitor that's been doing that already wins.

onewaystreet 11y ago
It's debatable whether the ride sharing industry can survive if drivers are classified as employees (which is why Uber and others are working on self-driving cars).
- s73v3r 11y ago
  It's not debatable; there are plenty of companies that do it already.

danielweber 11y ago

If they play it smart Uber will never die, but I've seen lots of companies fail because a competitor showed up and forced them into a vicious cycle of cutting quality to keep profits up, which drove out customers, etc. If the good drivers stop working for Uber because Uber is squeezing them, for example, Uber may get a reputation for having poor drivers.