If I need to go somewhere, or get home, Uber has never let me down. Likewise with food delivery, I certainly have been let down on that but Uber does the best job of letting me track the order and get a refund if needed.
Sure Lyft is an alternative, I have it on my phone but simply never use it.
It’s incorrect that nothing has changed about the cost of a ride. Taxi medallions used to be 500k-1m and require essentially taking out a mortgage. Now they are worth effectively $0.
And cost was never the core issue with Taxi’s, it was the unpredictability of the cost, having to pay in cash because the drivers incentive is to skim from the owner, having to find one or call for one, having to put your trust in a random driver in a random country with no idea if you are going the right way.
Look to NYC where they seem to have set the goal of making Uber as expensive as possible (10s of dollars in random fees per ride). It’s still popular - in a city with some of the best taxi options.
> At least for me uber has huge brand loyalty, it’s sitting in the dock of my iPhone
Hear hear. It feels to me that brand loyalty arguments are really opinions being extrapolated to the rest of the population. For example, one can reasonably argue airlines don't command any brand loyalty for the average traveler and how they are in a race to the bottom, yet many people will readily tell you how much they hate X airline or how they love Y airline. One could say the same of hotels, shampoos, socks, what have you. There always are those that don't care for the brands, and those that do.
It’s clear that airlines do not have brand loyalty sufficient to create significant margins like Apple or some such.
> If I need to go somewhere, or get home, Uber has never let me down.
The real test of brand loyalty it staying with them after a few bad experiences.
I wouldn't assume that just because people vocalise brand loyalty, means that they stick with it when it's time to open their wallets.
If people won't stop using a company that is so blatantly bad we're in trouble.
Those companies have been Microsoft, Apple, Google, Facebook and Amazon.
Financially you could have done amazingly well in the stock market simply by buying whatever big stock techies hate at the moment.
(Not saying Uber will necessarily continue this pattern. Even though they have the brand, I don't see how they intend to fix the enormous losses. That's very different from the optimized zero profit Amazon was making for years.)
> Those companies have been Microsoft, Apple, Google, Facebook and Amazon.
That's a great point. I'd add IBM to that list and the time frame would reach back to 35 years.
Now, that doesn't mean they're a good business of course -- they're probably a terrible business -- but that's a reason to use them, not to avoid them.
With that in mind, unit economics at both Uber and Lyft seem to be about the same, and both equally dreadful. Lyft never made some of the even worse investments (like trying to compete in mainland China without government support). Those days appear long behind Uber, though, for better or worse.
Also had trouble getting support- no way to contact them.
unfoetunate because t works great when I had it.
It may not warrant as much customer loyalty as - say - Apple, but "zero" is simply untrue. To give a most ovious example, in a foreign country/city I'd be strongly inclined to choose Uber over other alternatives because I'm already familiar with it.
For the same reason why I'd eat at McDonald's (rather than some local hot-dog stand): not quality, but safety. I see the risk that I get scammed / food-poisoned as lower.
> Uber has only made finding the ride more efficient but it has not made the actual ride itself more efficient.
It has, to some extent: in the form of shared rides. Traditional taxi companies don't provide such option, for fairly obvious reasons.
> And what if there are robot drivers? Wouldn’t that eliminate at least the human cost? It would. But it would do so for every other transport company as well, and by the same amount.
Not if you've got your own IP behind it - whereas your competitors need to rely on third-party solutions - or even if you can get a better deal on a third-party solution.
> Uber would still be fighting the same competitors in a similar race to the bottom. In summary, nothing can save Uber.
The exact same case could be made for Burger King.
It's quite possible that nothing can save Uber, it's clearly struggling, but I don't think your reasoning correctly sums up actual causes of that.
After we were picked up, the driver helpfully informed us if we'd ordered the same ride via Ola (he drives both), it'd have been ~50% cheaper (as a new user).
Naturally, I installed it and now I'll switch between Uber and m Ola. This then expands to Bolt, Grab, and so on, and you realise it's virtually the same experience with different branding and the sole differentiating factor is price.
I definitely buy the convenience aspect: it's way more comfortable to pull out your phone and order a ride on a platform you're already familiar with. My trouble is the barrier is so low to install another app (and new joiner incentives are financially motivating) that this leads to virtually no brand loyalty.
Perhaps in a different world, where there are no up significant upfront financial incentives and perhaps drivers were exclusive to a platform (i.e. to pass their rigorous screening processes is a sign of quality), that'd certainly buy some loyalty from me.
Back when Uber was new and everyone in SF was exclaiming how awesome it was and disruptive, one of the major taxi companies in Stockholm launched a new version of their app that basically had a big button going "I want a taxi to my location now", and you pressed it, and you got a "Hey, your taxi will arrive in X minutes".
And that's like the entire value of Uber right there, replicated cheaply by local competition.
# No money changes hands, so safer for drivers.
# No payment is made in the vehicle, so faster exit times.
# Uber records all trips, so easier to work out costs to expense.
# Uber uses any credit card, so your boss can pay for your ride without the need for separate expensing.
# Driver and passenger are tracked, so there it is easy to find who did what. There are a lot of rape charges and cases against Cabbies.
# Rating - I've been in a LOT of awful, awful cabs.
# Drivers can work 1 hour and make some money. Try that with any other job.
# No money changes hands, so safer for drivers.
Not true in many countries where cash is supported in Uber.
# No payment is made in the vehicle, so faster exit times.
Not true in many countries where cash is supported in Uber.
# Uber uses any credit card, so your boss can pay for your ride without the need for separate expensing.
I wouldn't do that a lot of times - I switched a few cards on my Uber account and had to contact support a lot of times because they froze all my payment options after that. Imagine being in the middle of US as European then getting all of your cards declined by Uber because you added your friend's card.
# Rating - I've been in a LOT of awful, awful cabs.
And I've been in a lot of awful ubers - the rating system doesn't work unless people actually do rate drivers, and people don't rate as much as you think. Also, if you don't want a driver but there isn't many drivers online, you keep getting reconnected to him even after canceling and selecting it's because of the driver multiple times.
# Drivers can work 1 hour and make some money. Try that with any other job.
Not really, the amount they earn in that 1 hour - when you remove Uber's cut, tax cut, gas and vehicle amortisation is terribly low. Some say they barely make ends meet with 8 hours driving.
Im not sure what you're trying to say? All Uber markets that support cash also support card.
> Card Declines Of course you will get blocked if you add an active uber accounts payment method. Thats basically a huge red signal for fraud.
> Rating Of course someone needs to be the first one to rate the drivers. Yet this is 100000x better than nothing, which is what most regular cab companies give.
>Money Not really? This is absolutely country/city dependent and the whole point is that YOU as the driver get to decide if its worth it or not. There are no upfront costs involved.
And the card decline wasn't done with a card that already was active on Uber. And their "fraud" system got triggered months later, repeatedly, after a drive or two.
Also yes there are upfront costs in my area, in US maybe it isn't but here you have them.
I'm not saying Uber is worse than cabs. I'm saying that a lot of "advantages" Uber has aren't really all that. They are in a race to not burn their money before their AV investment can can come in, and in the end, it's just cabs with an app, not much better or worse than cabs.
3-4 years ago, the play was different, but now, it's becoming "just another cab company" in that area.
Their fraud system is one of the best in the world, but of course it will have false positives. You know that your anecdote is not applicable to the business in general.
What upfront costs do you have? Where are you based?
I maybe get your point but I think you're vastly underestimsting the difference between a tech company optimizing digital transportation vs. A local cab company hiring a consultancy to make them a white label app.
I've taken Ubers in at least 7 countries, many of which have had a cash option (India and Vietnam), neither of which I took up. The average uber driver will have considerably less cash on them then the average cabbie.
> No payment is made in the vehicle, so faster exit times.
Only if you pay in cash.
> Uber uses any credit card, so your boss can pay for your ride without the need for separate expensing.
Uber supports having both a business and personal profile, which you can change before or during a ride. Every business uber I take has the receipt sent directly to my work email, and charged to my work CC.
They went 40 mins out of their way to return it and tried to refuse the money I offered them for their trouble.
This would have absolutely not happened with a cab.
IMHO, ubiquity, especially when traveling, will ultimately be the winning move.
Many of Uber’s customers are price sensitive. The minority who are not price sensitive are more likely to (be able to afford frequent) travel, but I fail to see how loyalty from this segment will translate into profits over the long term, especially since their international presence in multiple but not homogenous markets is a bet that economies of scale will yield a handsome pay off, where it clearly hasn’t as they had to pull out from direct competition in China for instance.
All their taxis do card payments, and have done card payments for decades before Uber.
> No payment is made in the vehicle, so faster exit times.
They didn't have that option when they launched the app with GPS booking, but they added it later. It now works just like Uber, you have cards on your profile, it charges your chosen card after the trip.
> Uber records all trips, so easier to work out costs to expense.
Of course they can email you your receipts if you want.
> Uber uses any credit card, so your boss can pay for your ride without the need for separate expensing.
So does this taxi app. Companies can also have accounts with the taxi company, so if it's a work trip you just use the company account that you've already entered into the app.
> Driver and passenger are tracked, so there it is easy to find who did what. There are a lot of rape charges and cases against Cabbies.
There are not a lot of rape charges and cases against cabbies in Stockholm, at all, so that's not a problem to solve.
> Rating - I've been in a LOT of awful, awful cabs.
Taxis in SF are godawful compared to taxis in Stockholm, so yeah, if you're used to the shitty cabs of SF, Uber is a step up. If you're used to pretty much every single taxi being a Mercedes like in Stockholm, Random Dude's Toyota is a step down.
> Drivers can work 1 hour and make some money. Try that with any other job.
That doesn't affect me as a customer, really. Also, when I get in a taxi in Stockholm I know I'm getting a properly licensed and insured ride, not just some gung-ho gig-economy hopeful who is driving his Toyota an hour a week.
Like I said, I understand that Uber was a step-up for the SF taxi market, but there are plenty of markets where it isn't, and where it's much-hyped technological invention just isn't very hard to replicate for local competition.
Last ride I got the driver told me he only considers the premium jobs from uber and prefers Didi.
Of course these businesses have some barriers to entry (so does Uber. Lyft et al. notwithstanding), but it's not a result of network effects that we're used to with companies like FB and eBay.
Of course! But they’re not valued at 10x revenue like tech companies. Uber stock has nowhere to go but down.
It doesn't help that the most visible "successful" tech companies are all monopolies or duopolies (Google, Facebook, etc.)
But for every category-dominating Microsoft, there are dozens of very successful software companies in every vertical. Dozens of project management software companies, countless task management software companies, etc.
McDonald's is top 10 most valuable brand in the world. It has massive brand loyalty & defensibility through it.
The only way Uber works as an investment (at the level they've accepted money) is if they somehow kill off traditional taxis and all competition and become the only game in town (where "town" is basically the whole U.S.), and charge taxi rates or above.
Given that the cost of entry I to the market (at least for customers willing to see the cheaper rates) is essentially zero as by the nature of the business your drivers can drive for anyone, making Uber work as an investment doesn't look very likely to me. Not that I'll feel all that bad when those people lose money. I'll just call that karmic justice for investing in a company with such a horrible record (I believe if Uber didn't have billions invested by the elite they would have been shut down or heavily regulated for bad business practices years ago).
Both companies are doing right thing to invest heavily in new businesses + experiences + new markets - despite what pundits say around here and that wall street wants to suck out all growth for short term "shareholder value maximization".
It's a race to the bottom and I suspect after all the hard work is said and done Uber will be the Yahoo of ride share. Tesla may very well swoop in and say "Thanks for blazing the trail"
That's exactly how they built their business. They should not be surprised of the consequences!
I enjoy the product and will enjoy the cheap rides while they last but the business mode seems flawed.
Would need to evaluate the one-time charges to determine if they actually would be ongoing. Simply having some one-time charges doesn't mean they will necessarily be perpetual.
In fact, the vast majority of riders have a preferred option even without the frequent rider incentives. This is even starker on the driver side.
The advent of pooling and continuing improvement absolutely have had a significant impact on the economics.
Uber has delivered various efficiency improvements including map-based routing and pricing, pooling. Lyft has "Shared Savers" that trade time/walking for lower fares and more efficient pickups/drop-ffs.
In fact, Uber & Lyft are frequently more expensive than taxis because of surge pricing and superior product.
Uber & Lyft are in the best position to take advantage of robo-drivers.
I don't think they are. The cost savings on using driveless cars for taxis are huge. Any operator will be able to massively undercut the competition. Consequently the most sensible thing for whichever company gets a level 5 driverless car first would be to run their own ride company and not sell or license the tech to anyone else. That's what Waymo is all about and why Uber are trying to invent their own driverless tech.
Any brand loyalty will evaporate literally overnight as soon as someone launches a driverless ride service simply because it'll be half the price of all the other human-operated services, far more reliable (no more cancellations for a better fare), and probably have many more cars available 24/7.
Wouldn’t be so sure about that. The operating company will still be trying to maximise profits after all.
This argument only makes sense if a driverless ride service can be launched overnight. Driverless rollout will take many many years. The slower the rollout and patchier the service availability, the better off the TNCs are.
At least on my case this means that I’m not always trying to pick the cheapest option, but instead go with the option that has had good price/performance ratio in the past.
Driver cost per trip = Driver cost per hour / Driver utilization.
By making finding the ride more efficient, Uber meaningfully increases driver utilization, decreasing driver cost per trip.
wow. how many trips do you do?
Seems like that's why they started limiting hackney carriages and regulating rates in London in 1662.
Also the horse had to be less than 14 hands high!
https://www.british-history.ac.uk/statutes-realm/vol5/pp351-...
My friend's sister got hospitalized after her Uber driver ran a red light because they were not privy to traffic queues most normal people would have caught on to (like stopping when a light is turning red)
I will gladly spend a couple extra bucks the ~20 times I need to Uber a year so that I am not getting into a screaming metal death trap with an unfit driver.
One of Ubers biggest problems is that they have zero brand loyalty. For a company that sells a utility (get me, or my food, from A to B) rather than an experience (like a cool vacation in a unique mansion), I will always pick the cheapest option. Whether that’s Uber or Bobs Taxis it doesn’t matter. That means this whole business is a race to the bottom. Profits will stabilize at approximately zero for everyone in that business. The second huge problem is that nothing about providing this utility (neither the driving itself, nor the human labor required of the driver) has decreased since Uber came into existence. Driving a car from A to B still costs the same per mile (gas or electricity and wear and tear), and the driver still costs the same per hour (at least minimum wage). Uber has only made finding the ride more efficient but it has not made the actual ride itself more efficient. So in the best case, Uber can be as profitable as a taxi company. But ONLY if it raises its prices to taxi company levels. And then it’s a taxi company. Taxis are expensive for a reason, because without a VC subsidy they have to be profitable to exist. And what if there are robot drivers? Wouldn’t that eliminate at least the human cost? It would. But it would do so for every other transport company as well, and by the same amount. Since there is no customer loyalty for a transport like this, Uber would still be fighting the same competitors in a similar race to the bottom. In summary, nothing can save Uber.