If both companies are approaching bankruptcy trying to outlast the other, wouldn't the lesser evil be a world with a ride-share monopoly rather than a world without (large scale) ridesharing?
With the amount of people that use these rideshare companies as their primary job or to make their daily commute, it seems hard to imagine going back to the pre-Uber/Lyft days. Not that the government or any regulatory body would see it this way. I just think consumers are better off with a monopoly here. Plus, whatever rideshare service that survives will still have to compete with local taxi companies.
The drivers don’t seem to be very loyal to any one company. The thing about ride sharing is you can achieve a high density of drivers in a small geographical location at relatively low costs. It is really hard to stop a competitor that is localised.
If I was going to take on Uber I would wait until they IPOed and then build out a business based on local dominance in secondary markets where I would concentrated on getting the transport and maintenance costs down as much as possible. I would lobby the local governments to make life difficult for Uber while promoting the “local hero”. Done well this strategy would be hard for a large player like Uber to fight.
That might be bad for taxi companies, but what happens to Lyft in that scenario? Won't other ride sharing companies start up?
Uber only becomes a monopoly if they can keep all competition out, not just taxi companies. Taxi companies succeeded in doing that for decades by colluding with politicians to limit competition. Uber would have to adopt a similar strategy to get anything close to a monopoly.
I take it that Uber is betting on being thee brand for ride sharing. Maintaining market leadership is critically important for when autonomous cars take off. Even if any car manufacturer were able to undermine Uber on cost, Uber will already have a significant upper hand with people already seeing it as the company you call to get somewhere. The only question I ask myself when looking to go somewhere is, Uber or Lyft?
If car manufacturers tried to clone what Uber has built they'll probably flop on making the technology usable, and the experience may just be overall frustrating.
Instead of burning cash by subsidizing travels, Uber could have just bought some competitors but still... The only chance Uber has is becoming a monopoly, and I don't see how they can achieve it.
Do you think ridesharing is just going to die as a product or do you think it will become easily commoditized and all margins will essentially disappear? I think it's going to be around for at least another 10-15 years, and considering how much money uber and lyft had to burn to get to where they are now, I feel like it will be quite hard for competitors to capture relevant amounts of market share in the US
How do you regulate Uber to not take the mindshare of ride sharing services so it doesn't become a monopoly?
The problem with Uber, and Facebook, and Twitter, etc is that to have competition you need users, and to have users you need mindshare, and whoever is on top always has the mindshare.
Its also a modern phenomenon. You could Xerox it while competing copiers could effectively compete in the market by making a better product for value and getting fewer sales as a result of less marketing and brand recognition than what Xerox had, whose customers than pay an advertising and brand premium. Same with kleenex, or even search. The dominance of a competitor does not impair the competitions ability to compete unless those competitors use force of law to break a free market.
With Uber and Lyft, the more dominant Uber is, the less likely Lyft can get drivers and thus the less likely Lyft can get customers because Uber has all the customers and drivers. Its the same problem you have with operating systems, where you need the software users want, but the software also needs users to justify the investment, which is how Microsoft can continue to dominate with a demonstrably inferior product.
I'd love for there to be a way to break up mindshare monopolies, but destroying Uber through tax regulation and killing an entire fledgling industry is anything but a solution.
If uber gets a monopoly and is charging too much, another company like Google, Apple, or whoever will start offering ride sharing, to get a slice of the pie.
In the US we have Lyft, so not quite a monopoly. Possibly an oligopoly though. I'm building an app that pits them against each other on price to promote a competitive transportation market. In some countries Uber does have a monopoly, or has been kicked out in favor of a different monopoly...
I see Uber as wanting their own future monopoly. They aren't some egalitarian democratic plumb bob making the world better for everyone. They are a national and trans-national transportation monopoly that has deep brand recognition while forcing drivers to play or pray, same schtick as the taxi companies. Why else would Goldman Sachs and Blackrock be involved?
Someone needs to make the craigslist of Uber or a Meta-Uber. The fact that many uber drivers are also taxi operators is very telling.
I think NYT misses the point. The problem with Uber isn't some cultural issue, it's that they're in an extremely tough and competitive business. It's really a race to the bottom.
The logic I kept hearing repeated is ride-sharing is a winner take all market. Like once you have a network of drivers setup giving people the lowest times for rides, you can force other competitors out and raise prices.
Time has proven how wrong this thinking was. It's almost impossible to stop competitors in ride-sharing because the cost of switching for customers is low, there are no legal or capital ex competitive barriers, and you can be picked apart city by city. Even drivers are incentivized to download as many of these apps as possible.
The whole situation seems awfully similar to Living Social and Groupon.
I'm not sure this is bad for Uber. Having competition can be helpful politically. It reduces claims of monopolization and makes laws that help "ride sharing" services less likely to be perceived as a favor to a single company.
If Uber and Lyft cause the downfall of the taxicab industry, it would probably hurt some people without access to technology or in less serviced areas. But, somehow I think taxi services would rebound if Uber or Lyft started abusing their monopolies.
The two market leaders are losing money hand-over-fist in the hopes of becoming a monopoly. I'd say it's affected competition in the market as a whole.
Heck, if you buy Uber's logic, they don't actually compete with Taxi companies. Lyft is their only serious competitor, and both of them are losing a ton of money (arguably, but I'd like to see a court weigh in) because of Uber's irresponsible behavior.
I don't think ride-sharing companies and taxi companies are in the same market (kinda like cars and horse-drawn carriages aren't in the same market, even though the former killed the latter). Uber's losses don't stem from them trying to kill taxis, but rather from rapid expansion and intense competition from other ride-sharing services.
Let's assume Uber dies. One bad outcome from this could be that Lyft gets a monopoly. I hope that doesn't happen.
Also, it will be awesome if instead of another Uber created there will be an open pool of ridess/seats available and people can use the platform of their choice. A la airline ticket booking model (of course the exact same approach will/may not work) or the bus ticket booking approach. Also, airline industry isn't hyperlocal.
Completely agree re competitors. If you look at when Uber and Lyft left Austin, almost overnight, competitors willing to follow the local laws sprung up and soon began providing equivalent service. In my opinion, it's going to be impossible to establish a moat (aside from incumbency) in ridesharing (absent some kind of regulatory change heavily favoring incumbents). The second someone thinks they can do it better, they will try (provided the capital is available).
The existing taxi industry is a protected monopoly. In a hypothetical future where uber has displaced the competition any other company could spring up and take their business.
With the amount of people that use these rideshare companies as their primary job or to make their daily commute, it seems hard to imagine going back to the pre-Uber/Lyft days. Not that the government or any regulatory body would see it this way. I just think consumers are better off with a monopoly here. Plus, whatever rideshare service that survives will still have to compete with local taxi companies.
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