Uber is a transportation marketplace. If they’re successful in cornering the market all transportation is arranged through them but they employ zero drivers, and therefore would be wildly profitable. That’s why they’re all about market share at any cost.
If Uber disappeared tomorrow, everyone would download another app and do the same journey in the same car with the same driver and the day after tomorrow would forget that Uber ever existed.
But today they have the biggest network of drivers, and until they do disappear (or get disrupted by something like self-driving cars), network effect ensures that they'll remain the default option.
Same can be said for Instagram or Twitter?
Yes and no. There’s no ongoing relationship between people on Uber, drivers don’t have passengers as “followers” or “friends” or vice versa. There’s no network effect really. And many users and many drivers have multiple apps anyway. The stickiness of Uber is incredibly low.
Re:Blue Apron lays off more workers
by kanyethegreat on Wednesday November 14, 2018 @02:45AM
(#18448255)
Yeah, and Uber's founder's name is Travis Kalanick. How does spitting out random facts about Uber at all address his comment that Uber doesn't have a sustainable competitive advantage.
Their sustainable advantage is in dominance. If they offer the most transportation options people check them first, and drivers flock to where the people are.
That's not how it actually works. Customers flip back and forth between Uber and competing services based on cost and availability. There's literally zero switching cost and no customer loyalty.
It's called a network effect
Re:Blue Apron lays off more workers
by andyidsinga on Wednesday November 14, 2018 @03:09PM
(#18453375)
I don't think there is a network effect present in either Uber's or Blue Apron's business model.
<snip snip> A network effect (also called network externality or demand-side economies of scale) is the positive effect described in economics and business that an additional user of a good or service has on the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.[1]
Blue Apron, not really. Uber certainly has a network effect. While many switched to Lyft given bad press, plenty more still got Uber originally (both sides of the market) and just use that. As they add more transit capabilities to their app (bikes, scooters etc) they will raise their moat as people just go there for all their transit needs.
Yet they're somehow looking at a $120B IPO next year.