I'm not sure I've ever seen the difficulty of starting a marketplace company with built-in network effects so vastly underestimated.
Take a smaller margin (or subsidize more, if the margin is already negative), build the driver side to be aware of and compatible with the reality that drivers are going to be driving for multiple services at once (with the exception of your seed drivers, maybe)
Now there's a reference I have not heard in a long, long time.
Google doesn't still do that, do they?
Source: I work there
maybe you guys don't like to talk about it anymore though...
Reasonable answers include:
- Google and friends don't perceive the ride-sharing market to be a profitable market to enter, in which case Uber may have problems, but competition from Google, Amazon, et all is not one of them.
- It actually isn't so simple to just "spin up" such a service. It would require a large investment in terms of development, regulatory hurdles, and marketing just to get a foot in the door, with a high level of risk that the effort doesn't succeed (see most all business ventures ever).
Uber has many problems. But competition from Google, Amazon, et all is not one of them. Lyft? Yes. Google, Amazon, Apple, Facebook, and so on? No.
Most tech companies have made their billions by automating processes and undercutting the old school competition. If you can't automate driving you can't build a strong competitive advantage against traditional taxi businesses.
Uber realizes this and they're willing to do anything, no matter how unethical, to get self driving vehicles first. That will be the true market disruption, and likely winner-take-all because you will instantly have such a gigantic cost advantage.
That's why you see Ubers competitors all working on self-driving. They're trying to leapfrog the next obvious evolution of the transport business.
Why wouldn't they develop their own self-driving technology while at the same time assisting in the building of using ride sharing as a habit, and simply wait until uber goes out of business or retreats even further into "profitable" markets before unleashing their low cost self-driving fleet into those markets previously dominated by a heavily subsidized uber?
oh wait a minute ...
People said the same thing about Google Plus and yet they completely failed. Its not so easy as it looks even if you have billions in the bank.
Amazon or Google or any other cloud provider could spin up a service that pairs drivers with ride-seekers. This kind of software is no longer a secret sauce and they have the infrastructure to scale instantly and the customer base to market it easily.