I think what most people seem to be missing about Uber/Lyft he sums it up well in this tweet. Uber more so because of the sheer extent of their scale. Contrary to popular belief i believe they will be profitable sometime in the near future. If we do hit a recession i think they’ll do even better as people are more likely to get rid of their cars to cut back on monthly payments and hence end up using ridesharing even more. https://twitter.com/jason/status/1172972229555998720?s=21
This dude is a locked up early investor in uber trying to keep his fortunes. He’s also recommending illegal collusion through price fixing (not surprising coming from uber). He doesn’t take into account new labor employment laws and the fact that increased prices means less demand. 🧐
I know he was an angel investor in Uber and what’s he suggesting might be borderline illegal. But the base logic still stands strong about the scale of things.
He’s assuming demand inelasticity which isn’t true. If these services charge more, people will ride less. I don’t see car ownership going away any more than it has already with increased rideshare prices.
I thought price fixing is illegal.
So you think during a recession people who have a car will just sell their cars and start paying more and go around with ubers...makes total sense
Uber can t just increase per ride25 cents.. overseas ride price is much lower than in us
It’s not that easy. Ridership declines when you increase prices.
The question here is two fold: 1) Whats the price elasticity for a rider (remember competition is not just lyft but any other mode of transport). My guess and anecdotally I price a ride in my head. For example from Caltrain sf to 1455 mkt its worth $x for me to get there in an Uber v. walking (for short trips even taking a scooter). For long daily trips no one will Uber everyday (the economies of car ownership or car “subscriptions” kick in) 2a) Profitability will only be possible if companies stop following a scorched earth strategy which neither company is doing (at least until now) - one possible option in the future is a merger of Uber/Lyft (good luck on that from an anticompetitive angle) 2b) Even if a merger happens, self driving will kill them. Self driving tech will not be much of a long term competitive advantage (the same way that having an erp system lost its competitive advantage for a manufacturing co) - brand will help but only so much and it will end up becoming a Walmart play (razor thin margins for walk in the door products) which to me are “daily/commuter” use cases with higher margins on say airport rides (infrequent) Furthermore, this is only the US. There is no “rule the world strategy” They can potentially unlock goods delivery or become a multimodal aggregator which might help growth a bit) - again razor thin (there is no “eyeball” or “intent” competition here that facebook/goog have). You need to get somewhere you need to. Period. Overall Uber will survive just fine but the days as a cool “tech” company are over. Their stock price has any and all growth baked in. Some investors got rich, Masa got screwed. Thats the reality of venture capital (yes even late stage) My 2c. No flames
In a duopoly, very difficult for them to turn profit in US, price is a key factor and there is no Brand royalty, service is the same.