In summary, the article argues that some platforms, such as Uber, benefit far less than others (such as Amazon, AirBnB) from network effects due to the fact that their userbases are clustered over multiple locations :

> Drivers in Boston care mostly about the number of riders in Boston, and riders in Boston care mostly about drivers in Boston. Except for frequent travelers, no one in Boston cares much about the number of drivers and riders in, say, San Francisco. This makes it easy for another ride-sharing service to reach critical mass in a local market and take off through a differentiated offer such as a lower price.

The article raises others points and is quite an interesting read in itself. Strongly recommended.

For Amazon, their Network effect is huge because they have a huge delivery and storage facility network. The barrier to entry is huge.

For Airbnb, it might be closer to what this article is saying. But also it's less convenient for home owners to have their location on multiple sites (need to sync calendars, the subscription takes much longer...). So they pick one, which is Airbnb.

I disagree that there is no network effect. When one travels to another country it is much easier to use Uber rather than to find what local brew of 'carpooling' service is available, create an account, put in credit card info etc.

Their tech is easily replicable but their global presence is not.

I've been in lots of places - pre Uber - where I didn't even speak the local language. Even then finding a taxi was not taxing. If Uber can't make a profit on local traffic it is going to be a mighty feat if they make money off non-local traffic.

Driver took advantage of their complicated fare system to add supplement charges that didn’t apply: charged us the baggage supplement for our backpacks that we carried in the car, and charged us a supplement for going to the train station, which should only apply from the train station.

The local taxi authority requires us to complain by post with an original receipt.

The postage costs of sending that with tracking defeats the purpose.

Most people wouldn’t even realize they were overcharged, after all, we paid what was on the meter. And issuing receipts is only by request.

We don’t have enough data to determine if the driver was excellently skilled or suicidal.

Meanwhile with Uber, you get a fancy receipt emailed to you listing route/charges, a sensible (if unregulated) complaints process, and ratings from other riders.

Lyft is also around, and it seems that there is very little friction for both drivers and riders to choose/arbitrage.

I think smart money in Uber recognizes their position as a gamble.

Regularly you hear about hundreds of millions being poured into companies like Uber and self driving tech companies. At least one of those companies is going to win big, and investors don't want to miss out.

Your answer is good. I agree. The stock market is Vegas. The stock market fueled by cheap money, is Vegas times a billion.

I find the article lacking. And I'm being polite.

Their bet is on Uber reaching autonomous taxi service. Without this Uber stands no chance in the long term.

Ppl said the same about Facebook in 2006-2012. "Anyone can make a social network." Yes, the technology can be replicated but the network and market-share cannot.

Of course a social network has by definition a network effect, no one argued this.

Uber is definitely not a social network. Maybe they plan to become one, but they are not yet.

No network effect here.

The same can be said for web shops like Amazon. The tech is nothing special, but the brand and network are. The promise of Uber is in becoming a trusted brand, with capacity everywhere, and convenient enough that you don't bother looking to the competition. That said, whether they can actually become this is another question.

Prime lock-in is not innovative or valuable as a concept in itself, it's just a way of capitalising on the loyalty of their customers, which would not work for many other retailers.