Uber doesn't have much of a moat or lock-in effect. I just switched one day from being a frequent Uber rider to 100% using Lyft, simply because I don't like Uber's behavior as a company. The prices are so close it doesn't make any practical difference to me.
Anecdotally, among my friends I also see Lyft becoming the default, and sometimes price-checking with Uber. If Waymo or whoever came out tomorrow with a cheaper/safer driverless car, I'd just as likely drop Lyft in a heartbeat.
I have found that the drivers for Lyft are much happier than the drivers for Uber. This holds true even when a driver drives for both services. I asked several drivers why this is and the universal response was that Lyft treats them better, so they are happier to pick up Lyft customers.
I switched over to only using Lyft, but like the OP states, if Waymo came out tomorrow I'd probably switch to that.
Agree that the lock-in is weak compared to other markets. Their strategy has been to incentivize drivers and riders to not split usage between other apps.
Uber drivers who do a certain number of hours or rides per day/week often get bonuses, so they'd have to forego these bonuses to split time with Lyft.
Converse to this, I get a lot of bad behavior when I try to book Uber, especially late at night or in odd areas. Drivers who cancel, intentionally drive in the wrong direction to force you to cancel, who don’t wait or drive to the wrong place to pick you up, who don’t know where to go, who are rude, who refuse to turn off music...
I started using Uber because it was worth paying more to not deal with taxis. Now Uber is the cheap, bad option. I really wish there was a “middle of market” ridesharing service. Cheaper than a black car from whatever service, but still with good quality control. Uber used to be that but isn’t anymore. Lyft is kind of that but isn’t quite there.
Anyway, it feels like Uber is trading goodwill for volume. I only use it for free rides with Amex platinum or when I need a car ASAP and no taxis are available. Otherwise I use Lyft (and sometimes Lyft is cheaper anyway). It feels like Uber is shorting quality control and trading long-term profitablility for short-term volume with more, cheaper drivers.
It doesn't matter if the end result is a duopoly. The two need only stop competing and raise prices. It will be hard for a third entrant to come in because of the large cost to enter markets. The only viable entrant is, as mentioned Waymo, because driverless cars alters the economics and because they have the tech.
To this day I don't even really understand the value that Uber et al are supposedly adding that justifies the size and evaluation of their companies.
At the end of the day they're a layer on top of a taxi business. Sure this is useful in some way but like Airbnb or weworks or all these other companies that just throw one layer of service over the actual business I don't understand why they are treated like high tech companies.
The most extreme example was possibly moviepass which was basically just a subsidy from investors to movie goers.
They have different company culture for now but at the end of the day, the business practice dictates direction and I don't think there's anything fundamentally different with Lyft.
Their rides are both VC subsidized and unsustainable. They both punish customer loyalty. My wife and I rotate hiring rideshares. If one of us books too many, one person's fare becomes much costlier than the other. They're both godsends when initially disrupting markets (our Egyptian Uber driver definitely took a lot of personal risks engaging in shouting matches against street touts who were throwing themselves at the car and ready to drag us out so we spend our money at their shops) but once they reach semi-duopoly status in mature markets like the Bay Area, more and more crappy things happen. Things like drivers canceling you after 10 minutes or people using GPS spoofers to pick up rides while not even in the same county. And you clearly see both companies, over the years, trying to hide ways to get problems resolved behind more and more layers of circular forms labyrinths.
I've been taking more traditional taxies to keep the balance of power competitive (and because it's sometimes less frustrating).
With their new loyalty program and Uber Visa card, I definitely think they are trying hard to build that lock-in effect. Once that happens, I do think they'll reap the rewards of their platform. It's just hard at first. I hope they can pull it off tho. But then again, I do know a lot of Uber drivers who only use Lyft personally for rides.
The extent of their lock-in is that of any C2C company: the marketplace. Can one side be confident there are enough on the other side? And then it becomes about brand recognition and marketing. (And in this particular case, the Uber brand has some issues....)
No different than, say, consumer rental companies like Airbnb.
Depends, where I am there's Uber or Traditional Cabs. My experience phoning for a cab is pretty pleasent though (quicker than using uber). Although their app is unusable.
(When it comes to dodgey companies CabCharge is pretty terrible)
No moat? Of course it has a moat! So far Lyft has raised $1.5 BILLION dollars in order to compete [1]. Capital requirements are absolutely a barrier to entry and protect their position.
Try Gett. They have less drivers, but their quality is much better – they actually know the city, have excellent manners, and I've hardly ever heard any horror stories.
while it is true that you can easily switch from uber to Lyft or vice versa, there are only two of them. so they do have moats. its not easy for a new competitor to emerge unless they are doing something different like perhaps driverless cars.
The reason I'm reluctant to use Lyft is that they do not say beforehand how much my ride is going to be.
Edit: I stand corrected. Their UI mislead me because for airport rides the price is only shown after you hit a Confirm button, but that does not order the car as I thought, only takes you to the next screen.
This is one of those no-shit responses, parroted over and over again.
At the end of the day, Pepsi and Coca-Cola sells you sugar water. McDonald's and Burger King get the same meat form the same vendor trucks. You charge a credit card whether Visa or MasterCard.
The point isn't who brings you the convenience, it's that you have convenience at all.
Uber/Lyft has commoditized driving to a product sold at ~$2/mile. That's why this week they both launched loyalty programs, back to back.
And from there they'll just keep trying to add more value bit by bit. Not surprised at all if in 10 yrs Uber doesn't have cab hailing anymore, but you ended up on an Uber flight to Shanghai.
That is not a happy balance sheet. They have raised over $24B, then they shifted around the cap table when Soft Bank came in[1] where they valued the company at $48B. I have never played poker where the lowest valued chips were a million dollars but it has to feel like that to senior management at the company right? And their investors, they have serious money in the pot too. It feels like they have managed to create a company that is 'too big to fail.'
Every time I think I've seen the most amazingly challenging business situation I'll ever see, something comes along to top it. Win or lose, the book about Uber is going to be really amazing.
My "Uber sucks" story is that I left a jacket in the back seat of a car. I immediately tried to figure out how to call the driver but Uber decided they needed to make money off my misfortune. Not only did they charge me $15 to connect with the driver but they refused to let me message the driver directly, so what could have been a few minutes of time turned into a week long saga. Once I finally got a hold of the driver several days later she had the same story as me where she had immediately tried to contact me and return my item but Uber didn't let her contact me.
That permanently cost Uber a customer because now I know that they'll try to use dark patterns to screw me over any chance they get.
I can imagine there are very solid reasons related to stalking that result in Uber wanting to make it hard to contact past riders or drivers in either direction.
Nothing reminds me how out of loop the Hacker News and Silicone Valley is from the rest of the America like an Uber post. It always degrades into an anecdotal competition on who had the worst experience with Uber and how amazing Lyft has been. The fact that they are growing 38% in a quarter at their scale and we're calling that 'slow' is pretty nuts.
Personally I've had good and bad experiences with both, but almost everyone of my friends outside of tech uses Uber exclusively and love it. Can't wait to see how the race to a better self driving experience goes.
Uber's been buying revenue at the cost of margin in at least two ways by shifting rides to Pool (where they can declare the entire ride's cost as revenue, not just their cut), and ramping up Uber Eats (where they take a percentage of the total cost of the food and may actually lose money on the ride). Neither strategy can continue indefinitely.
Speaking as a infrequent user (1-3 times per month) in Lisbon, Portugal, I can't choose Uber anymore. There are so many other apps providing the same service with cheaper prices (some of them such as Taxify do not have surge pricing) and better drivers. The drivers' quality declined a lot: sometimes they don't speak portuguese or english and if they notice you're drunk they try to scam you (leave you in some random spot far away from destination and gaslight you with "nah mate you put the wrong address, but try again and I'll get you hoe"). I'm not that drunk and I'm not stupid.
There is always an "Uber is dead" sentiment floating around when losses come out, but I don't buy it. The long term on-demand transportation opportunity is absolutely massive. Uber has tried to win the land grab and "outlast" everybody with obviously unsustainable subsidies, and maybe that didn't exactly work out. But if the economics don't work for Uber, they won't work for anybody else at scale either. Consumers are benefitting as the industry is subsidized, but it won't last. As with most mature industries, there will eventually be 2-3 players that stay alive, and eventually become profitable. Uber, Lyft, Waymo, Tesla? I don't know, it will be interesting to see. But just because the economics are bad today doesn't mean they always will be. I wouldn't count them out.
Their prices are often worse than yellow cabs in NYC. They act like locals won't be able to tell but it's pretty obvious when it's a $10 more ask at a time that isn't even busy and there are yellow cabs everywhere.
I had a yellow cab driver claim just last month that his credit card machine was broken, after a ride from the airport into Manhattan. I told him too bad, plastic is all I got, and wouldn't you know it miraculously the machine worked when he tried it (with a sour face). As a cherry on top he then tried to charge me more than the fixed rate set for the airport fares. So taking a yellow cab in NYC still absolutely sucks in 2018 and you'll get swindled if you're a tourist.
This plus the news that Waymo is starting its autonomous ride-share service next month is a one-two punch for Uber this week. Might be one of the largest unicorns to die in our generation.
You don't get to the size they do and simply die. They'll be acquired and vertically integrated in a way that lets them be competitive on price. You can break even on the ride if you make it up in harvesting data, showing in car advertisements, having sample products placed in cars, and a million other "fremium" style revenue harvesting techniques.
Oh don't you know they want to IPO to cash out on gullible public investors based on hype. With accelerating losses as revenue grows means each dollar of revenue has negative return. More revenue means more negative return.
They only way to win is if they monopolize a segment enough that they can jack up prices to make up for the sustained losses. Other ways this looks like Groupon. The more they sell, the more they lose. It is like some kind of pyramid scheme.
A few weeks back I booked an Uber after a concert, then the Uber driver called me saying to come to him (he was way out + the GPS location of the taxis seems terribly inaccurate whenever I've used it, so who knows where he really was), we were by the official Uber pickup location. He said he didn't know how to get to where we were... Obviously some bad planning by someone. He said he could try, and not to cancel the trip. Then he cancelled it a few minutes later.
Then Uber connected us to a new Uber driver, we found the car in the official Uber road queue, but there were people already in the car. This was about a min after we were connected with this new driver, we asked if he could cancel as we can't wait for him to drop off his current passengers, but he didn't seem to know how to (or unwilling to). My question is, are Uber drivers just accepting people while they have people in the car, while stuck in concert traffic and obviously won't be done with there current fair for ages, then forcing the new passengers to cancel and get a MUCH higher rate.
Anyway, since we then had to force the cancel, we now had a HUGE uber fare quoted, like 3-4x our last price to try get a new cab. We tried it, but the guy was miles away, so we ended up giving up on Uber and taking public transport way out, then taking an Uber.
In hindsight, probably should have gone with public transport option first. Lesson learnt I guess.
I just assumed, since there was an official Uber tent setup and people with official looking Uber vests on that they'd have a system set up to get people to there Uber's fast... or some system to just link up each person with the first uber car in the queue. Was nothing like that, it was chaos.
I am a pretty loyal Uber user, and probably spend around $400 a month with them.
But... I was stuck out in the cold in the boonies of long island recently, and Uber kept bugging out and not finding rides since I was fairly rural. I downloaded Lyft for the first time and it found me a ride instantly. I'm going to have to use them more often.
what the fuck is going on when a company can lose over $1 billion a quarter with no profit in sight and still receive further investment? Would they be hugely profitable if not for reinvestment in expansion and R&D?
How can they incur that huge a loss? According to Crunchbase they have 5000-10000 employees. They have a backend to manage. They have limited sales and marketing expense.Where is their money going? R&D or just employee pay?
Right now honestly I don't see much of a difference between Uber and Moviepass when you (realistically) rule them out of winning the self-driving race. They are offering a service for less than it costs but have no way to stop customers from switching if they raise prices. And to boot Moviepass has a better corporate reputation than Uber somehow. I feel like this has been obvious for a year now, but as others said, I guess it has to be too big to fail now?
The only thing that looks like it could ever be profitable is Uber Eats, but there's no way that keeps the company afloat.
Not least surprised. In a country like India, these people are now facing infinite competition. Their original strategy of bankrupting their competition by offering deep discounts just isn't working, because in a country like India you kill one set, and give the overall scale of competition/population the next comes like up weeds.
The same problem is being faced by amazon/flipkart/walmart. Everytime you think that you are going to eliminate competition by offering discounts in say two years. Come two years and you see there is a whole new set of competition and you face a new task to burning $3 - $4 billions to the ground without the hope of seeing a dollar worth profit in return.
The fact that customer loyalty is totally absent and largely shifts based on prices isn't helping either.
Drivers have become worse. They used to have clean cars and were of all ethnicity. There also used to be a lot of women drivers. Now it's basically taxi drivers with their mate's cars. Cars are now often dirty, greasy interiors, dirty outside and bad smell.
And as soon as you have a 'usual' route, or you use the app a lot, you get charged more!! It's so disgusting.
I tried to book a trip to the airport for my inlaws using both my account and my wife's account. She rarely uses Uber, and hers showed a 10-15% cheaper rate. Do they think we're stupid? They targetted 'smart' people for using ride sharing as opposed to taxis, and now they try to play us.
Let's not even get started about dark UX patterns. It's hard to see peak rates now, and unless you get a bad gut feeling, you wouldn't know you're currently paying more than a cab rate.
What about that '3 mins away'? They're always 3 mins away for 10 minutes. Unless they fly close to a black hole it's just lies and horrific UX.
The same ride I used to pay $8 for is sometimes $25-32 now. Let's be honest, if anything better came along, I wouldn't look back.
At best now, my Uber rides always seem to be just about 10% cheaper than a cab.
I must be at "max milking rate".
(update: I went from +10 to -1 in 15 mins... I guess I touched a secret society)
One of the things I am noticing, at least in India, is that there are now lesser number of rides available at any given point in time. So, either the ridesharing demand has risen to match the supply or that the supply is dwindling. I think it is the former. But on routinely talking to driver they think it's the latter. Less and less people are now getting into the ridesharing game.
So, it seems drivers might be wary of driving for ridehsaring companies. What kind of knock-on effect will this have on Uber's profitability.
[+] [-] Androider|7 years ago|reply
Anecdotally, among my friends I also see Lyft becoming the default, and sometimes price-checking with Uber. If Waymo or whoever came out tomorrow with a cheaper/safer driverless car, I'd just as likely drop Lyft in a heartbeat.
[+] [-] agrippanux|7 years ago|reply
I switched over to only using Lyft, but like the OP states, if Waymo came out tomorrow I'd probably switch to that.
[+] [-] zhobbs|7 years ago|reply
Uber drivers who do a certain number of hours or rides per day/week often get bonuses, so they'd have to forego these bonuses to split time with Lyft.
On the rider side, they're pulling a play from the airline playbook, with their version of frequent flier miles and status: https://techcrunch.com/2018/11/14/uber-rewards/
[+] [-] cynicalkane|7 years ago|reply
I started using Uber because it was worth paying more to not deal with taxis. Now Uber is the cheap, bad option. I really wish there was a “middle of market” ridesharing service. Cheaper than a black car from whatever service, but still with good quality control. Uber used to be that but isn’t anymore. Lyft is kind of that but isn’t quite there.
Anyway, it feels like Uber is trading goodwill for volume. I only use it for free rides with Amex platinum or when I need a car ASAP and no taxis are available. Otherwise I use Lyft (and sometimes Lyft is cheaper anyway). It feels like Uber is shorting quality control and trading long-term profitablility for short-term volume with more, cheaper drivers.
[+] [-] babesh|7 years ago|reply
[+] [-] Barrin92|7 years ago|reply
At the end of the day they're a layer on top of a taxi business. Sure this is useful in some way but like Airbnb or weworks or all these other companies that just throw one layer of service over the actual business I don't understand why they are treated like high tech companies.
The most extreme example was possibly moviepass which was basically just a subsidy from investors to movie goers.
[+] [-] xster|7 years ago|reply
Their rides are both VC subsidized and unsustainable. They both punish customer loyalty. My wife and I rotate hiring rideshares. If one of us books too many, one person's fare becomes much costlier than the other. They're both godsends when initially disrupting markets (our Egyptian Uber driver definitely took a lot of personal risks engaging in shouting matches against street touts who were throwing themselves at the car and ready to drag us out so we spend our money at their shops) but once they reach semi-duopoly status in mature markets like the Bay Area, more and more crappy things happen. Things like drivers canceling you after 10 minutes or people using GPS spoofers to pick up rides while not even in the same county. And you clearly see both companies, over the years, trying to hide ways to get problems resolved behind more and more layers of circular forms labyrinths.
I've been taking more traditional taxies to keep the balance of power competitive (and because it's sometimes less frustrating).
[+] [-] garysahota93|7 years ago|reply
[+] [-] paulddraper|7 years ago|reply
No different than, say, consumer rental companies like Airbnb.
[+] [-] outside1234|7 years ago|reply
[+] [-] hornetblack|7 years ago|reply
(When it comes to dodgey companies CabCharge is pretty terrible)
[+] [-] janesvilleseo|7 years ago|reply
[+] [-] abrookewood|7 years ago|reply
[1] http://fortune.com/2017/12/05/lyft-gets-1-5-billion-funding-...
[+] [-] 8note|7 years ago|reply
[+] [-] golergka|7 years ago|reply
[+] [-] rvn1045|7 years ago|reply
[+] [-] megy|7 years ago|reply
[+] [-] dzhiurgis|7 years ago|reply
[+] [-] buzzdenver|7 years ago|reply
Edit: I stand corrected. Their UI mislead me because for airport rides the price is only shown after you hit a Confirm button, but that does not order the car as I thought, only takes you to the next screen.
[+] [-] alaskamiller|7 years ago|reply
At the end of the day, Pepsi and Coca-Cola sells you sugar water. McDonald's and Burger King get the same meat form the same vendor trucks. You charge a credit card whether Visa or MasterCard.
The point isn't who brings you the convenience, it's that you have convenience at all.
Uber/Lyft has commoditized driving to a product sold at ~$2/mile. That's why this week they both launched loyalty programs, back to back.
And from there they'll just keep trying to add more value bit by bit. Not surprised at all if in 10 yrs Uber doesn't have cab hailing anymore, but you ended up on an Uber flight to Shanghai.
[+] [-] ChuckMcM|7 years ago|reply
Every time I think I've seen the most amazingly challenging business situation I'll ever see, something comes along to top it. Win or lose, the book about Uber is going to be really amazing.
[1] https://www.bloomberg.com/news/articles/2017-12-28/uber-inve...
[+] [-] guelo|7 years ago|reply
That permanently cost Uber a customer because now I know that they'll try to use dark patterns to screw me over any chance they get.
[+] [-] manigandham|7 years ago|reply
[+] [-] romed|7 years ago|reply
[+] [-] Game_Ender|7 years ago|reply
[+] [-] atomical|7 years ago|reply
I was told, "we are all customers here."
I left, but found out later that they tried to do the same thing to the driver dropping it off. He left too.
[+] [-] iandanforth|7 years ago|reply
[+] [-] jbhatab|7 years ago|reply
Personally I've had good and bad experiences with both, but almost everyone of my friends outside of tech uses Uber exclusively and love it. Can't wait to see how the race to a better self driving experience goes.
[+] [-] femto113|7 years ago|reply
[+] [-] Ftuuky|7 years ago|reply
[+] [-] tompetry|7 years ago|reply
[+] [-] nemo44x|7 years ago|reply
[+] [-] Androider|7 years ago|reply
[+] [-] chapium|7 years ago|reply
[+] [-] deminature|7 years ago|reply
[+] [-] lemoncucumber|7 years ago|reply
[+] [-] ProAm|7 years ago|reply
[+] [-] jsonne|7 years ago|reply
[+] [-] segmondy|7 years ago|reply
[+] [-] kevin_b_er|7 years ago|reply
They only way to win is if they monopolize a segment enough that they can jack up prices to make up for the sustained losses. Other ways this looks like Groupon. The more they sell, the more they lose. It is like some kind of pyramid scheme.
[+] [-] wingworks|7 years ago|reply
Then Uber connected us to a new Uber driver, we found the car in the official Uber road queue, but there were people already in the car. This was about a min after we were connected with this new driver, we asked if he could cancel as we can't wait for him to drop off his current passengers, but he didn't seem to know how to (or unwilling to). My question is, are Uber drivers just accepting people while they have people in the car, while stuck in concert traffic and obviously won't be done with there current fair for ages, then forcing the new passengers to cancel and get a MUCH higher rate.
Anyway, since we then had to force the cancel, we now had a HUGE uber fare quoted, like 3-4x our last price to try get a new cab. We tried it, but the guy was miles away, so we ended up giving up on Uber and taking public transport way out, then taking an Uber.
In hindsight, probably should have gone with public transport option first. Lesson learnt I guess. I just assumed, since there was an official Uber tent setup and people with official looking Uber vests on that they'd have a system set up to get people to there Uber's fast... or some system to just link up each person with the first uber car in the queue. Was nothing like that, it was chaos.
// end of rant
[+] [-] cm2012|7 years ago|reply
But... I was stuck out in the cold in the boonies of long island recently, and Uber kept bugging out and not finding rides since I was fairly rural. I downloaded Lyft for the first time and it found me a ride instantly. I'm going to have to use them more often.
Just my random anecdote.
[+] [-] beaconstudios|7 years ago|reply
[+] [-] yalogin|7 years ago|reply
[+] [-] adjkant|7 years ago|reply
The only thing that looks like it could ever be profitable is Uber Eats, but there's no way that keeps the company afloat.
[+] [-] matchagaucho|7 years ago|reply
Their burn just reflects a continued, aggressive customer acquisition strategy.
[+] [-] kamaal|7 years ago|reply
The same problem is being faced by amazon/flipkart/walmart. Everytime you think that you are going to eliminate competition by offering discounts in say two years. Come two years and you see there is a whole new set of competition and you face a new task to burning $3 - $4 billions to the ground without the hope of seeing a dollar worth profit in return.
The fact that customer loyalty is totally absent and largely shifts based on prices isn't helping either.
[+] [-] keyle|7 years ago|reply
I'm a decent user, I use it 1-2 a week.
Drivers have become worse. They used to have clean cars and were of all ethnicity. There also used to be a lot of women drivers. Now it's basically taxi drivers with their mate's cars. Cars are now often dirty, greasy interiors, dirty outside and bad smell.
And as soon as you have a 'usual' route, or you use the app a lot, you get charged more!! It's so disgusting.
I tried to book a trip to the airport for my inlaws using both my account and my wife's account. She rarely uses Uber, and hers showed a 10-15% cheaper rate. Do they think we're stupid? They targetted 'smart' people for using ride sharing as opposed to taxis, and now they try to play us.
Let's not even get started about dark UX patterns. It's hard to see peak rates now, and unless you get a bad gut feeling, you wouldn't know you're currently paying more than a cab rate.
What about that '3 mins away'? They're always 3 mins away for 10 minutes. Unless they fly close to a black hole it's just lies and horrific UX.
The same ride I used to pay $8 for is sometimes $25-32 now. Let's be honest, if anything better came along, I wouldn't look back.
At best now, my Uber rides always seem to be just about 10% cheaper than a cab.
I must be at "max milking rate".
(update: I went from +10 to -1 in 15 mins... I guess I touched a secret society)
[+] [-] thisisit|7 years ago|reply
So, it seems drivers might be wary of driving for ridehsaring companies. What kind of knock-on effect will this have on Uber's profitability.
[+] [-] anigbrowl|7 years ago|reply