There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.
The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets.
Skirting regulation and good labor practices were also supposed to help, but that can't last once you become competitive with the establishment.
Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. But even if it does, it won't be an exclusive technology. They won't be able to make any more profit from it. If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.
But in a way, that's the beauty of disruptive use of technology. Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer. They're not quite there yet, and are still catching up. The next logical step is a lift aggregation service that creates a marketplace.
>> There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs.
I dont understand this comment. Traditional taxis made money for generations, why cant Uber? If anything, Uber has more advantages.
EVEN: Traditional taxis had the "rent" of medallions. Uber has the rent of Corporate HQ costs.
People are willing to pay to get driven around for relatively short distances on-demand so I'm not sure why that's an inherently unprofitable business. I assume many taxi companies and black car companies make money.
What's probably true is that they probably have to raise prices and deal with decreased volumes in at least many markets to do so--and probably grow more organically. And it won't be the kind of profitability that's expected from VC-funded companies.
I'm not sure about the future profitability of this space, but I think you're disregarding a few key points.
1. The innovation was less the app and more solving supply problems. No app will be able to change that for the taxi business.
2. Competitive advantage in this space is having more drivers and less wait time. That drives folks to use one provider over another. The lock in isn't the tech, but the availability of rides.
You're right that the lock in or network effect in the ride sharing space is very different than other big tech cos (FB, Netflix, AMZN etc) in that they're localized, and should result in more competition.
The bet investors are making is that the market will shake out with one category leader, a runner up and virtually no competition beyond that. Should be interesting to watch.
No it wasn't. There were a ton of taxi related apps and startups before Uber and nothing about Uber's app was particularly impressive IP-wise - it's basically just distance search.
If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else?
* They have industrial facilities to build cars
* They have dealership networks to repair cars
* They have capital or can borrow easily to do it
I can even argue that all that stops car manufacturers from operating this are government regulations -- taxi medallions as well as anti-monopoly laws. Once Uber, lyft and the like undercut those regulations, someone else can undercut them.
Are you saying in any city with an un-regulated taxi market means all taxi companies operate at a loss? That doesn’t sound right (Stockholm, Sweden for example would be a counterexample).
You are just fundamentally wrong. There is a cost associated with operating the “dispatch,” operating the car and paying the employees/contractors. Take that cost, distribute it over the number of rides you expect to give to your customers and then add a little on top. The question is whether or not the customers will engage in that transaction or is the cost too high? Uber has plenty of fat to cut. If it were running efficiently, there is no possible way it would go out of business. You think Uber will raise their prices 10 percent and then everyone will decide to give up ride-sharing? Uber is the most efficient method of doing taxis. It succeeds by default. I don’t understand how you can possibly think that Uber can’t make money.
The disruption of taxi/rental business is going to come way before from self driving cars becomes perfect. most people know how to and prefer to drive especially if its not long distance inside dense urban areas. the real use case will be the fact that self driving car will drive itself at its own pace to nearest suitable pick up point, where u can get behind the wheel and drive it where u need to go, then leave it there for it to figure out how to drive itself to next customer who needs it. half of the population prefers to drive the car themselves or their partner rather than share that tiny space with a stranger and be driven around. this completely solves the liability issue and pr nightmares that will come from 'killed by/because of self driving car' news.
- They scale up massively and capture a huge fraction of the ride sharing market, thus allowing them to offer low cost / low margin rides, but making up for it by volumes : At least in India, they are in a good position, but they seem to have conceded the other markets with high potential for growth like SE Asia and China.
- They have a premium offering that is actually quite a trend-setter : Revive the Uber Black service and take it up a notch, target richer clientele which will be willing to pay a premium to ride in a much better car and with trained chauffeurs.
- They push heavily in the pooling space - this allows them to use their vehicular inventory better as well as drive up margins per ride : This doesn't seem to be a huge focus for them as of now, but it could change.
The other big change that could transform their fortunes is if they put out a viable self driving product. I do not think it'll be economically profitable, or even technologically viable in the near term.
Option 4: Uber uses the expertise, infrastructure, and brand it built in ridesharing to expand into the becoming the de facto standard for timely last mile delivery. This is why UberEats is such a major strategic focus for the company. It's proof of concept that they can do more than be a taxi.
An efficient platform for quickly and cheaply ferrying around stuff around town is a way bigger market than ridesharing. We're not only talking about the obvious examples like residential packages, groceries, and laundry.
But entirely new business models that didn't previously exist, because there's no efficient last-mile delivery solution. Cloud kitchen are an example of a nascent industry that could only emerge in a post-Uber world.
Pools are where the money is at, IMHO. If they can put together a good predictive transportation model, then I think they will really have a killer app. Personal transportation is just too costly for regular use. But having an "Uber Bus" that shows up down the street from your house right when you need it, then can bring you home right after work for maybe $5/day will have wide-spread appeal.
Option 4: sell your ride data to a 3rd party. Knowing who you are, where you travel to, what's around those areas. They - or a 3rd party - could advertise what's in the area you were taken to, track where you frequent and recommend riding to places you haven't been to in a while showing you what's "new" in those areas, etc.
I don't Uber (and have only used Lyft once), so maybe they already do this or are planning to.
Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is.
We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every project/sale. If you aren't able to achieve this, your pricing, product-market fit, etc. have failed, because the all-knowing, all-equilibrium-izing market has spoken.
Every politician out there shows reverence for the 'small businessperson' taking risks and bringing jobs and tax revenue into their communities. But once in office, the people they meet with are Travis Kalachian and others, people who cannot make a profit, but are excellent at convincing rich investors that they should make Travis a millionaire.
The reality is that a VC-backed company can simply outprice any competitor, and if it's not enough, can lobby city hall to change the laws to favour them. And this cash spigot can stay on for years, as long as you can show you're gaining customers every quarter. If you're a big enough play, you can move your whole HQ to a low-tax friendly country and administer local operations from there.
The jobs that are created by this are right around minimum-wage level, so how is this supposed to create wealth for anybody except the shareholders who got in early with cheap valuations?
Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.
There's either two possibilities for the self-driving future.
1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly.
When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a lot more data to constantly improve algorithm. This is a winner-take-all market with fat monopoly margins for whoever wins. If Uber prevails, it's likely that their profits will be larger than the entire global auto market.
2) People still mostly own their own cars. They're driverless, but people like the convenience, customization and sense of personal ownership with having their own vehicle. Ridesharing is still an out-of-the-ordinary option for unconventional lifestyles or special occasions.
But in this world, Uber doesn't need to own their own fleet. The same crowdsourcing logic still works. Personal vehicle ownership means a huge number of idle vehicles sitting in people's driveways. Without the pain-in-the-ass factor of actually having to be the driver, expect a lot more people to put their car on Uber's network.
If you maintain a fleet of thousands of driverless cars, there are at least some economies of scale you can leverage: More negotiating power with your suppliers, the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc.
If you crowdsource it, a lot of that stuff is going to have to be purchased at retail prices, which will raise the bottom line. You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars. But that's presumably only going to last for a short time, until private car owners wise up.
Also, unless you are the sole IP owner of pivotal self-driving tech, it will just be a commodity that all ride-hailing services pay to use, meaning that price competition still implies the same poor margins as for traditional regional taxi operations.
I'm not quite sure everyone discussing this, including the economist article author, is in the loop with why Lyft and Uber are getting valued the way they are. Wall Street is not paying for a taxi company, they are betting that Uber and Lyft are the best poised to first rollout driverless ride sharing, i.e. one of them will own and monopolize patentable tech that the mass public wants to use. The existing experience is a commodity business where profits go to zero, that's well known and old news.
That's like investing in Yahoo in the .com bubble. Uber and Lyft's only asset is the interface between the customer and the driver, not self-driving cars.
It's very easy for someone to come up with an app to order a robotic taxi. This is probably the easiest part of the robotic taxi business.
It's so much so, that unless Uber or Lyft's service is essentially "free," a robotic taxi business will probably consider the cost of working with Uber or Lyft not really worth it and bypass them. They might also prefer the experience of users sticking with their own app in their own walled garden. The robotic taxis will probably have large stickers in them that say something like, "order your next car through us and $AVE!!!" (Just like how JetBlue encourages customers to use jetblue.com)
Or, to be quite honest: If I can actually hail a robotic Tesla taxi next year, I'd rather use Tesla's app instead of Lyft or Uber's app.
Patents are not valid indefinitely. Given the ridiculous amounts of money thrown at this, patents will probably expire long before the break-even point is met.
Besides patents, Uber has no way to bind customers. Yes, it's a commodity business, and I see no way around it. Users can simply use a different and cheaper car, which will inevitably exist and become popular.
If it’s about driverless ride sharing why don’t you buy stock in a company like google that makes money and is developing driverless cars, instead of a taxi company that loses money.
Google could build everything Uber has in a weekend once Waymo gets driverless cars working.
No, in its current state, they can't be profitable. Other transportation options will become more desirable if Uber had to truly charge what it costs to transport a customer so for now and the near future they have to subsidize the rides which kills the possibility of profit.
Autonomous cars will help but that won't happen for years, 5-10 maybe more. Additionally, if autonomy becomes a reality for Uber it will happen for other modes of transportation too so they will have to compete there too. That will be even harder since it's easier to get a bunch of cars working once the tech is available.
Also Uber will not survive as it stands now. Regulations and public pressure will eventually force it to conform to something similar to a very large cab company.
Every industry eventually gets hit by consolidation. A business of individual drivers can be even more profitable if it joins drivers into groups. They become more reliable, they cost less to maintain and they gain power that they can leverage against large industry actors. Maybe then, it will become profitable. But that won't happen until the industry matures.
I wonder if self-driving cars will be like Fusion, but instead of always being 20-40 years away, it's always 5-10 years away.
I do really feel like Waymo will prove successful in specific environments THIS year and increment slowly, and eventually our transportation habits will change to better utilize a cheaper, safer form of transportation.
But I wouldn't be surprised if I'm still saying that ten years from now.
The mouse changed the way we work, and it got commoditized. Just because a company was first to adopt and make a business out of a disruptive technology doesn't mean it's going to corner the market with it. In fact, history shows that it's not the best approach to be the first adopter of a technology (Kodak, Altavista, etc..)
My observation - Uber is starting to have hard times competing on local market. The quality of local competitors - their apps, fleet and service overall is growing and Uber seems trying to reduce costs in this situation, which probably won't help in a way, so to speak.
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1) you own the rights to,
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4) you have consent of the copyright holder.
Re Competition
Taxis or Uber are not always the cheapest way. One of my friends used to do a lot of travelling to Tokyo on work assignments. The others from the company always hailed a cab and ended up paying $100 for a trip from the airport to the downtown hotels. My friend would jump onto the Tokyo subway and was always there at the hotel to greet the rest of them when their cabs would arrive. He usually paid just a few bucks for the subway token.
Myself, I would sometimes get rides in the day from people I just met on the plane. But then it was a more trusting time. But maybe there is an app there that pairs people arriving in the same town. Those that have their cars in the airport parking lot and are willing to share a ride and those that are willing to pay a few bucks.
With all of the ride sharing companies burning money it seems like the real bet here is being the last one standing. If Lyft folds, Uber will have much more leverage to play with the margins.
Theoretically, couldn't they just fire almost all non-maintenance engineers and continue running the app without building new features? Wouldn't that make them profitable instantly?
Stopping expanding would probably have a bigger impact. Are they really doing a lot of new features/incremental infrastructure development at this point? (Though I don't know how much they're still blowing on self-driving.)
This might be ignorant, but I've wondered about this for a while.
Isn't Uber essentially a software company? The drivers doesn't get anything besides their share of the fares?
According to the free part of the article they've lost 7.9 billion dollars since 2009.
How expensive can it possible be to develop and operate their software? According to some sources uber takes a cut from 20-25% (although some claim much higher fractions in practice)
http://www.businessofapps.com/data/uber-statistics/#6 claims ~10B _quarterly_ revenue for 2018, with net loss at close to 1B. (EDIT: seem the revenue is counted as full fare price - not ubers cut, so that brings "actual" revenue to ~2B/Q)
How are they not making money..? Lots of normal taxi services have booking apps too. If they IPO it'll be interesting to see a more detailed breakdown of their costs.
I want to talk to someone who has invested in Lyft (or plans to do so for Uber) through the public markets and is in it for a long-term buy and hold. Like someone who really thinks the share price represents the net present value of all future cash streams for Lyft/Uber.
I think I'd have a hard time finding someone like this. You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more.
> Here is the thing about Uber and Lyft (and much of the “sharing economy”).
> They don’t pay the cost of their capital.
> The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human.
> These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills.
Tesla is in the best position to win in this arena. As the article points out it's cutthroat so the one with the lowest costs, acquisition and operation will win.
Telsa makes it's own cars, the cars have super low operating costs: built for 1m miles, almost no ongoing maintenance, powered by electricity that is already much cheaper than gas and will continue to get cheaper. And finally no driver with self driving software.
No one else has this combination attributes for the lowest cost operation. Though it could be Tesla after it's bought by Google.
Uber wants to be the Walmart of taxis where they start with super cheap pricing to hook in new customers and then turn the switch on once everyone is dependent on them.
It'll be very hard or impossible for Uber to be a monopoly and having more competitors means the prices will have to compete to remain attractive to people.
An unlikely idea for Uber becoming profitable is if they form a cartel with Lyft and other Uber-esque services to give all users no choice but to pay the high prices, but then they'll be competing with traditional taxi services once again.
I think Uber can easily make money if they function more as a marketplace and less as an opaque transportation company.
Their job is to connect riders to potential taxi providers (which is what they are, since they're all 'contractors'). Contractors could have a rating that's viewable before accepting a ride offer from the driver.
Fire almost all of their staff, just need a skeleton crew to keep the webstore and ride-match stuff up. Stop wasting money on self driving stuff, it's never going to happen. Take a flat rate per-ride, done.
[+] [-] skywhopper|7 years ago|reply
The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets.
Skirting regulation and good labor practices were also supposed to help, but that can't last once you become competitive with the establishment.
Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. But even if it does, it won't be an exclusive technology. They won't be able to make any more profit from it. If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.
[+] [-] parksy|7 years ago|reply
I want a lift from x to y to z. Bid on me.
[+] [-] TuringNYC|7 years ago|reply
I dont understand this comment. Traditional taxis made money for generations, why cant Uber? If anything, Uber has more advantages.
EVEN: Traditional taxis had the "rent" of medallions. Uber has the rent of Corporate HQ costs.
DRAWBACK: Uber gets raw deals in some cities because the local Taxi commission has sweetheart deals with the city (Case in point: NYC, NYC TLC, and Mayor DeBlasio: https://www.nytimes.com/2012/07/18/nyregion/de-blasio-reaps-...)
BENEFIT: More efficiency, less wasted miles w/o riders.
BENEFIT: Group rides are highly efficient.
BENEFIT: National/international scale
BENEFIT: National/international scale to get better loan rates, prices, and even self-loan to drivers.
This isnt to say they dont have to raise prices, but I dont see how they can never make money.
[+] [-] ghaff|7 years ago|reply
What's probably true is that they probably have to raise prices and deal with decreased volumes in at least many markets to do so--and probably grow more organically. And it won't be the kind of profitability that's expected from VC-funded companies.
[+] [-] jsloss|7 years ago|reply
1. The innovation was less the app and more solving supply problems. No app will be able to change that for the taxi business.
2. Competitive advantage in this space is having more drivers and less wait time. That drives folks to use one provider over another. The lock in isn't the tech, but the availability of rides.
You're right that the lock in or network effect in the ride sharing space is very different than other big tech cos (FB, Netflix, AMZN etc) in that they're localized, and should result in more competition.
The bet investors are making is that the market will shake out with one category leader, a runner up and virtually no competition beyond that. Should be interesting to watch.
[+] [-] harryf|7 years ago|reply
No it wasn't. There were a ton of taxi related apps and startups before Uber and nothing about Uber's app was particularly impressive IP-wise - it's basically just distance search.
What Uber did that was unusual for a tech startup was to invest in lobbying - https://www.theverge.com/2014/12/14/7390395/uber-lobbying-st... - it allowed them to play across regulated markets where no one else had before.
[+] [-] prolepunk|7 years ago|reply
* They have industrial facilities to build cars
* They have dealership networks to repair cars
* They have capital or can borrow easily to do it
I can even argue that all that stops car manufacturers from operating this are government regulations -- taxi medallions as well as anti-monopoly laws. Once Uber, lyft and the like undercut those regulations, someone else can undercut them.
[+] [-] alkonaut|7 years ago|reply
Perhaps I misunderstood “mass market”?
[+] [-] nospitate|7 years ago|reply
[+] [-] YeahSureWhyNot|7 years ago|reply
[+] [-] govg|7 years ago|reply
- They scale up massively and capture a huge fraction of the ride sharing market, thus allowing them to offer low cost / low margin rides, but making up for it by volumes : At least in India, they are in a good position, but they seem to have conceded the other markets with high potential for growth like SE Asia and China.
- They have a premium offering that is actually quite a trend-setter : Revive the Uber Black service and take it up a notch, target richer clientele which will be willing to pay a premium to ride in a much better car and with trained chauffeurs.
- They push heavily in the pooling space - this allows them to use their vehicular inventory better as well as drive up margins per ride : This doesn't seem to be a huge focus for them as of now, but it could change.
The other big change that could transform their fortunes is if they put out a viable self driving product. I do not think it'll be economically profitable, or even technologically viable in the near term.
[+] [-] dcolkitt|7 years ago|reply
An efficient platform for quickly and cheaply ferrying around stuff around town is a way bigger market than ridesharing. We're not only talking about the obvious examples like residential packages, groceries, and laundry.
But entirely new business models that didn't previously exist, because there's no efficient last-mile delivery solution. Cloud kitchen are an example of a nascent industry that could only emerge in a post-Uber world.
[+] [-] mywittyname|7 years ago|reply
[+] [-] massung|7 years ago|reply
I don't Uber (and have only used Lyft once), so maybe they already do this or are planning to.
[+] [-] rchaud|7 years ago|reply
We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every project/sale. If you aren't able to achieve this, your pricing, product-market fit, etc. have failed, because the all-knowing, all-equilibrium-izing market has spoken.
Every politician out there shows reverence for the 'small businessperson' taking risks and bringing jobs and tax revenue into their communities. But once in office, the people they meet with are Travis Kalachian and others, people who cannot make a profit, but are excellent at convincing rich investors that they should make Travis a millionaire.
The reality is that a VC-backed company can simply outprice any competitor, and if it's not enough, can lobby city hall to change the laws to favour them. And this cash spigot can stay on for years, as long as you can show you're gaining customers every quarter. If you're a big enough play, you can move your whole HQ to a low-tax friendly country and administer local operations from there.
The jobs that are created by this are right around minimum-wage level, so how is this supposed to create wealth for anybody except the shareholders who got in early with cheap valuations?
[+] [-] TruthSHIFT|7 years ago|reply
[+] [-] dcolkitt|7 years ago|reply
1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly.
When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a lot more data to constantly improve algorithm. This is a winner-take-all market with fat monopoly margins for whoever wins. If Uber prevails, it's likely that their profits will be larger than the entire global auto market.
2) People still mostly own their own cars. They're driverless, but people like the convenience, customization and sense of personal ownership with having their own vehicle. Ridesharing is still an out-of-the-ordinary option for unconventional lifestyles or special occasions.
But in this world, Uber doesn't need to own their own fleet. The same crowdsourcing logic still works. Personal vehicle ownership means a huge number of idle vehicles sitting in people's driveways. Without the pain-in-the-ass factor of actually having to be the driver, expect a lot more people to put their car on Uber's network.
[+] [-] bunderbunder|7 years ago|reply
If you maintain a fleet of thousands of driverless cars, there are at least some economies of scale you can leverage: More negotiating power with your suppliers, the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc.
If you crowdsource it, a lot of that stuff is going to have to be purchased at retail prices, which will raise the bottom line. You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars. But that's presumably only going to last for a short time, until private car owners wise up.
[+] [-] rat9988|7 years ago|reply
[+] [-] seppin|7 years ago|reply
And to get to the point where it's cheaper might take decades. With Uber's burn rate there's no way it gets there.
[+] [-] mlthoughts2018|7 years ago|reply
[+] [-] fullshark|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] tjpaudio|7 years ago|reply
[+] [-] gwbas1c|7 years ago|reply
It's very easy for someone to come up with an app to order a robotic taxi. This is probably the easiest part of the robotic taxi business.
It's so much so, that unless Uber or Lyft's service is essentially "free," a robotic taxi business will probably consider the cost of working with Uber or Lyft not really worth it and bypass them. They might also prefer the experience of users sticking with their own app in their own walled garden. The robotic taxis will probably have large stickers in them that say something like, "order your next car through us and $AVE!!!" (Just like how JetBlue encourages customers to use jetblue.com)
Or, to be quite honest: If I can actually hail a robotic Tesla taxi next year, I'd rather use Tesla's app instead of Lyft or Uber's app.
[+] [-] perfmode|7 years ago|reply
Meaningful such that it actually delivers monetarily
[+] [-] amelius|7 years ago|reply
Besides patents, Uber has no way to bind customers. Yes, it's a commodity business, and I see no way around it. Users can simply use a different and cheaper car, which will inevitably exist and become popular.
[+] [-] empath75|7 years ago|reply
Google could build everything Uber has in a weekend once Waymo gets driverless cars working.
[+] [-] Marazan|7 years ago|reply
Why do any of their curre t activities make you think that?
[+] [-] WheelsAtLarge|7 years ago|reply
Autonomous cars will help but that won't happen for years, 5-10 maybe more. Additionally, if autonomy becomes a reality for Uber it will happen for other modes of transportation too so they will have to compete there too. That will be even harder since it's easier to get a bunch of cars working once the tech is available.
Also Uber will not survive as it stands now. Regulations and public pressure will eventually force it to conform to something similar to a very large cab company.
Every industry eventually gets hit by consolidation. A business of individual drivers can be even more profitable if it joins drivers into groups. They become more reliable, they cost less to maintain and they gain power that they can leverage against large industry actors. Maybe then, it will become profitable. But that won't happen until the industry matures.
[+] [-] onlyrealcuzzo|7 years ago|reply
I do really feel like Waymo will prove successful in specific environments THIS year and increment slowly, and eventually our transportation habits will change to better utilize a cheaper, safer form of transportation.
But I wouldn't be surprised if I'm still saying that ten years from now.
[+] [-] bariswheel|7 years ago|reply
[+] [-] viach|7 years ago|reply
[+] [-] dvh|7 years ago|reply
[+] [-] uptown|7 years ago|reply
[+] [-] dymk|7 years ago|reply
[+] [-] jtlienwis|7 years ago|reply
[+] [-] m_ke|7 years ago|reply
[+] [-] swarnie_|7 years ago|reply
I have a choice between 4 services in my city. I pick the cheapest one whenever i want to go somewhere (Thanks VC cash burn)
Last man standing gets the monopoly.
[+] [-] tw1010|7 years ago|reply
[+] [-] ghaff|7 years ago|reply
[+] [-] olejorgenb|6 years ago|reply
Isn't Uber essentially a software company? The drivers doesn't get anything besides their share of the fares?
According to the free part of the article they've lost 7.9 billion dollars since 2009.
How expensive can it possible be to develop and operate their software? According to some sources uber takes a cut from 20-25% (although some claim much higher fractions in practice)
http://www.businessofapps.com/data/uber-statistics/#6 claims ~10B _quarterly_ revenue for 2018, with net loss at close to 1B. (EDIT: seem the revenue is counted as full fare price - not ubers cut, so that brings "actual" revenue to ~2B/Q)
How are they not making money..? Lots of normal taxi services have booking apps too. If they IPO it'll be interesting to see a more detailed breakdown of their costs.
EDIT2: found the IPO prospectus including some numbers: https://www.sec.gov/Archives/edgar/data/1543151/000119312519...
[+] [-] habosa|7 years ago|reply
I think I'd have a hard time finding someone like this. You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more.
[+] [-] basementcat|7 years ago|reply
This is why people invest in gold and dogecoins.
[+] [-] miguelmota|7 years ago|reply
Almost sounds like a Ponzi scheme
[+] [-] carapace|7 years ago|reply
https://www.ianwelsh.net/the-market-fairy-will-not-solve-the...?
> Here is the thing about Uber and Lyft (and much of the “sharing economy”).
> They don’t pay the cost of their capital.
> The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human.
> These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills.
[+] [-] sunstone|6 years ago|reply
Telsa makes it's own cars, the cars have super low operating costs: built for 1m miles, almost no ongoing maintenance, powered by electricity that is already much cheaper than gas and will continue to get cheaper. And finally no driver with self driving software.
No one else has this combination attributes for the lowest cost operation. Though it could be Tesla after it's bought by Google.
[+] [-] miguelmota|7 years ago|reply
It'll be very hard or impossible for Uber to be a monopoly and having more competitors means the prices will have to compete to remain attractive to people.
An unlikely idea for Uber becoming profitable is if they form a cartel with Lyft and other Uber-esque services to give all users no choice but to pay the high prices, but then they'll be competing with traditional taxi services once again.
[+] [-] linuxftw|7 years ago|reply
Their job is to connect riders to potential taxi providers (which is what they are, since they're all 'contractors'). Contractors could have a rating that's viewable before accepting a ride offer from the driver.
Fire almost all of their staff, just need a skeleton crew to keep the webstore and ride-match stuff up. Stop wasting money on self driving stuff, it's never going to happen. Take a flat rate per-ride, done.
[+] [-] chriselles|7 years ago|reply
Airlines at least have the possibility of temporarily defending margins on city pairs with mismatched supply/demand.
Perhaps surge pricing on ride share is an analog to that.
The accumulated debts of ride share players seems akin to picking up pennies on ground getting stickier and the steamrollers are accelerating.
It will be interesting to see what happens if/when full spectrum subscription ride share options become available.