Re:Big tech is built on predatory pricing
by repsilat on Tuesday November 28, 2017 @12:09AM
(#15794597)
> When this happens, statistically the closest driver will take X less time to get to you.
If everyone is spaced evenly around the place and there's no congestion, you need four times as many drivers to halve response times. For a while you get good gains per additional driver, but as the numbers increase the marginal benefit tails off. This means a new player with some capital can likely compete (and is probably what the grandparent meant by "saturation".)
Re:Big tech is built on predatory pricing
by amenghra on Tuesday November 28, 2017 @12:56AM
(#15794784)
The same thing happens from the driver's point of view. Each additional rider adds a marginal value to any given driver; there's only so many rides they can make in a given day.
In most two-sided markets, the ratio of users on both sides plays a more important role than absolute numbers.
For every additional driver, the density of drivers on a map gets higher. When this happens, statistically the closest driver will take X less time to get to you.
Two sided markets are not about having a minimum number of people.
Two sided markets are literally a network effect.
https://en.m.wikipedia.org/wiki/Two-sided_market
The "traditional" network effect is describing one sided markets. But it is a normal economic concept to talk about the two sided network effect as well.
Think of it this way. In a 1 sided network, ever user type A makes it more valuable for other user type As.
In a two sided market every User A makes the network more valueable for User type Bs. And every User type B makes it more valuable for user type As.