The few experiences I've had with local Taxi systems, coming from a everyone-drives-a-car suburban background, have been awful. Overcharging, credit card machine breakdown, and unreliability of driver arrival estimation have made me seek out more expensive alternatives, just to avoid the hassle.
I now live in a city where I take public transport 90% of the time. But that 10% has been made so much easier by Uber and Lyft(they offer the "same" features, so they are the same in my book). They tell me; How long until the driver is here(often incorrect, but only by a small factor), how long the trip will take(often incorrect, by only by a small factor), and how much it will cost(often correct or guaranteed).
None of the features above sound unique to Uber/Lyft, the only difference between them and Taxi's are subsidization by Capitalization. I've heard of Flywheel offering the same app features Uber/Lyft do, but Uber's are often under ~$10 where I am, which a Taxi can take anywhere from $25-$45. But if Uber's subsidization goes dry, as long as there's an feature-like alternative, I'd still pay for that.
The real advantage Uber has is brand trust when taxis go back to their shady and anti-competitive business practices and the regulatory environment relaxes. The important question is if brand trust will be worth anything.
They may not go where you want, they may not be available where you are, because you are not in the right part of the city.
Sounds like you're suffering from a pretty severe filter bubble.
I'd say it is bad form to base an argument like this as fact, when there is clearly significant evidence of the inverse. We know that Uber has targeted airport usage, with a seemingly offline cache of airport GPS locations baked into the app - to tap the travel market... I'd be hesitant to say this doesn't alone make an impact.
Expect Austin to occur elsewhere (Uber and Lyft leaving due to local regulation, and competitors filling the void).
Uber is not an angel, but at least with one app we have a lot of people pointing out privacy violations. With two (say, Lyft in US cities), there's some choice. If Uber really fails and the taxis end up running the streets again, I don't see any real pressure to make good ride hail / pay apps.
Features were pretty much on par with Uber.
Depends on a market I guess. Here you have a single app for all local taxi companies (actually, there are few competing apps, but you get a point), you can even select which companies do you want to use via checkboxes, because their price differs. Same centralized service works with SMS too, if you don't want to install app or have an ancient cell phone.
If we were talking about Uber's current model then you're 100% correct. But if we look at all to where they're going there's tremendous potential.
They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?
I'm skeptical of the notion that the big auto manufacturers (who had a conniption fit at the mere notion of Tesla selling cars direct, instead of through a dealership) nimbly setting up autonomous, on demand fleets of vehicles which destroy their dealership network and also cost them half of their revenue.
Yes, they are losing money, but they're playing a very different game than the local taxi company.
> They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous.
Otto until now is not a truck company. They are not producing any truck. They are just retrofitting their technology in existing trucks. It is like what Google does and what I told everybody and laughed at me. Google had and has no interest in building cars. They have a very bad track record in building hardware for consumers. That said, Google is a software company. Google wants to sell their Software knowhow to the car industry. The very same seems to be true for Otto. Otto is just a technology company that does retrofitting. But all the truck manufacturers are building their technology directly into the trucks. Remember, that Freightliner and other Brands are a Daimler company. Daimler has self-driving technology for their cars and are integrating them into the trucks. The future for Otto would be a partnership with at least one big truck manufacturer, which is not in sight. Otto will become obsolete, when it does not get such a partnership. So for Uber that is a high risk investment.
> They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?
You forget, that in the case of self-driving cars, then Uber has to buy (or lease) those cars. Today, they pay the drivers only for the work done, while the driver has to pay for the car and the service. So the risk and costs are distributed to the drivers. But with self-driving cars these costs are becoming Uber's costs. But Uber has until know no knowledge on handling own property. What about Car2Go, Zipcar, and alike? They can easily exchange their existing car fleets. They have knowledge and experiences on handle car fleets. Think about that.
> That said, Google is a software company
..is because Google is not primarily a software company.
Google is first and foremost an advertising (or 'profiling') company which uses whatever tool (software, hardware, service, complete stack) at their disposal to increase profit derived from -you guessed it- advertising. What Google wants is to have their software and service in every car in the world. Cars are akin to Android devices. At best, Google would make reference models to give the right example (this is what Nexus originally was as well). Google goes for volume (like it did with Android, and like Microsoft did with Windows and Office), Tesla is the Apple who goes for the top segment.
Facebook is in the same league. Microsoft, with Windows and Office, used to be a software company, selling software licenses. They're reinventing themselves away from that ever since Mr Nadella's been behind the steering wheel.
Don't mistake an advertising (or 'profiling', or even spying) company for a software company. Even then, traditional software company is vastly different from SaaS which even Oracle is heading towards. Tesla, Apple, and -sortof- Microsoft have very different business models than Google and Facebook.
All the big 4 accounting firms have HR, legal, PR people, in addition accountants but the reason why they are called accounting firms is because accountants dominate their hiring.
In other words, accountants make up the bulk of the people in their revenue centers.
Same with Google: they hire a lot of software engineers that contribute directly to their revenue.
As engineers that how we'd like to view the world, but that's not how accounting and business management work. Those engineers are a cost, nothing more. The sale of ads is Google primary source of income. The fact that engineers had to build the tools and platform for selling those ads is irrelevant. The technical stuff is "done" at this point, and now the sales people need sell enough inventory to make up the cost of production.
Even if you're a pure software company, one that sells software, the developers are still a cost, that does not directly contribute to revenue, only the sales department does.
Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.
No, the sale of AD SPACE is Google's primary source of income. And that AD SPACE is primarily in Google's own software products (Search, Mail, Maps etc) although of course they've built a platform for others to sell related ad space...
>the developers are still a cost, that does not directly contribute to revenue, only the sales department does. Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.
The recent season of Silicon Valley had a hilarious arc depicting this thinking. But it's important to note that not all business organizations maintain that philosophy
(I know nothing about accounting, so can't comment on that.)
Yes, in that sense it is true.
In the sense of the end product (software licenses not being the primary source of income), and the way profit is gained (advertising), it is untrue.
I guess it depends on perspective.
Self-driving trucks and, even more so, cars, are by any reasonable measure decades away. There are technical challenges that we have no answer for. Like all technical challenges, they can probably be overcome, but no one knows when or how, and what hardware advancements are necessary. That's not even getting into the regulatory hurdles.
Put out a demo proof-of-concept and people think that the product is ready. It's like those 'life-like' Japanese robots that have some people thinking that we are almost ready to replicate humans, just because they put a pretty silicone skin on top of a simple mechanical contraption.
This isn't a start up trying to figure out how to make money (Twitter) or a company that can't/won't change (Blackberry).
This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.
I don't know if this is accurate. They're fending off lawsuits pushing them to recognize their drivers as employees, their prices are artificially low (in the sense that it's subsidized by VC money), and they're racing both cab companies and car companies at once (if Tesla/GM/Ford gets autonomous cars first, who needs Uber?).
At a ~$70B valuation, they have no margin for error. Their only realistic positive option at this point is to IPO. Right now, they're valued higher than Ford ($50B), GM ($55B) and Tesla ($33B), and currently Uber is reliant upon them (and others) to manufacture the cars they rent to people; if they are beaten to autonomous cars, they have no reason to exist.
This is why I think Uber is in a tough spot; they've raised a ton of money at an enormous valuation, and have to somehow convince the public markets that they're worth it. Whether they can do it, who knows? I've been wrong on these things before (Zynga and KING seemed like obvious flops, but the public bought into them).
I have always looked forward to self-driving car networks because of what I perceived to be their ultra-competitive and ultra-low margin nature.
Then two years ago everyone started talking about an Uber monopoly and I got super upset. Are we seriously seeing another industry ultra centralize due to technology?
But I'm beginning to suspect that this may be a massive miscalculation on the part of Uber and its investors. Maybe it is a low margin, highly competitive industry and Uber will be remembered as that one company that subsidized everybody's rides for a few years until it just faded into the background.
As great as that would be, those are still a decade away from common use, probably much more.
The problem here is that ridership at current prices is rather higher than ridership at 2x current prices... and 2x current prices only brings you up to break-even. you want to bring that up to the point where Uber is making billions? ridership is going to fall off a cliff.
I use uber a lot mostly because it's really cheap; For five bucks? yeah, for five bucks, I'll have someone drive me to work. if that goes to $10 or $20? Yeah, I'll still use it when I go to the bar or when my car is broken or something, but for that kinda scratch I'm probably taking a shuttle, driving myself, or using a bicycle to go to work.
The point here is that Uber's competition isn't really lyft or the cab companies, it's the car I have sitting in my own driveway.
I don't know how many potential competitors are willing to blatantly ignore existing laws (I guess this is the mythical ethics barrier). Ability to raise money given there's Uber (and Lyft etc.) is also a strong barrier since the model only works with massive VC money to keep cost artificially low. Brand recognition is another one.
At the end of the day Uber seems to prefer the classical (as in 5 forces) cost leadership strategy, currently powered by VC funding. Which means long term the play has to be autonomous vehicles. Since the chain of operations requires vehicles in some way I agree with the many posters in this thread who have said their real competition will be the Teslas of the world. Which would worry me a great deal as an investor. I think they should push to IPO quickly while joe doe still thinks yeah Uber sure I use them every now and then take my moneyz (if that's ethical...I won't judge).
Have still never taken an Uber and don't feel the need to.
And in the UK the competitors must be much smaller, everyone I knew there always used uber.
Rs. 100 works out to under $1.5.
Or effectively, $0.10/km if you take a 15km trip.
How the hell is that ever going to be profitable?
You say this as if 75% of the reason people take Uber isn't price, and that one day Uber will simply be able to jack up all their prices and make money. Demand doesn't work that way.
Why does a drug dealer give free samples at first? ... Creating demand.
What they will not have for long though is a monopoly on supply in India.
Agree. Steve Blank argues that the first-mover or second-mover strategy has never worked [1]. Uber is a second mover, Lyft was first.
[1] https://shift.newco.co/why-startup-pioneers-have-arrows-in-t...
Uber really wants to be a logistics company.
I believe that Uber miscalculated the total sum of money in the "taxi-ride"-pool.
If uber has no barrier to entry, neither does facebook.
I don't care if my friends use Uber, if a different Taxi company offers me the same service for cheaper.
If the Taxi app has a significant number of users you might convince driver's to jump through those hoops. But if the Taxi app has no users it's impossible.
This is an easy problem to solve.
Not sure, when they will just have to accept that those drivers are their employees(maybe a lawsuit is needed in India as well).
Thus, I think one could easily argue that FB could be supplanted very quickly by a new service that offers many of its features but is more attuned to the use cases of the younger generation. In Uber's case, the situation is much different because their only appeal (low fares) is unsustainable.
It will however be horrible if Uber dies because of government's protectionist (Trump like) regime trying to protect inefficient taxies.
Uber has helped us bring more fuel efficient vehicles as rides, helped us pool rides etc. making travel cheaper yet causing less pollution.