[killbot5000]

The Uber business model is:

Undercut competition. Use borrowed money to sell rides under cost. Wait for all competitors to die. Jack up prices.

AFAIK they’re still living on borrowed money.

It reminds me of the airline deregulation of the 90s. New airlines would use borrowed money to sell seats at below cost to attract customers, driving established carriers out of business.

The funny thing is that this smells a lot like “the tragedy of the commons”. Everyone wants to use this amazing infrastructure for flying, but no one wants to pay for it. New firms undermine the stability of the system by charging less than cost in order to starve established competitors whose business model is focused on being profitable.

[tmoertel]

> The Uber business model is: Undercut competition. Use borrowed money to sell rides under cost. Wait for all competitors to die. Jack up prices.

The interesting thing is that there is more than one startup using this model. The competition isn't the other startup; it's the other startup's investors.

I wonder how long those investors will keep on pumping money into the scheme, hoping their guy will be the last standing. Or will they ride the sunk cost fallacy all the way down?

[missedthecue]

That's not their business model. Uber knows very well how low the barrier to entry is in ride hailing.

It's not like they're building railroads here. It's an app.