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Gustomaximus

Here is the solution;

1) Uber comes in pays well - sources on the net for hip drivers - You get awesome English speaking nice drivers

2) Uber starts to drop rates

3) Good Uber drivers quit for lack of pay, existing cabbies start to drive for Uber

4) Alternate company, takes lower margin, pays drivers well and offer better customer experience.

5) Uber hold some inertia in via brand name while the majority of the market recognises new services is better and uploads new app on their phone over the course of a year or 2.

This is the beauty of the Uber model. Its relatively easy for new entrants to enter. There's no medallion system holding out innovation. The day Uber mucks around their customers/drivers significantly I'll delete their app. I already use an alternate one occasionally for comparison and cause I like to see competition in the market.

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> 4) Alternate company, takes lower margin, pays drivers well and offer better customer experience.

It doesn't seem to me that your crucial step will work. Uber is worth >$50bn, but more importantly has a substantial amount of cash on hand. I can't imagine anyone could out last them in a price war.

Certainly Uber are becoming an increasingly formidable competitor in this space for alternatives. And money helps ALOT. But Uber started out as nothing against an industry worth more than 50bn.. They won on 1) price, 2) convenience and 3) customer service.

Give that response was largely about someone saying when Uber has lost their customer service quality, that would be a large switching point alone. I went to Uber more for service and convenience. Price was a bonus.

And they will be limited on price wars. If someone comes in at slim margin, paying more to drivers, Uber can hardly go negative in pricing. Firstly they have investors to appease. And in many countries they would be charged with predatory pricing and be in a heap of trouble. They might knock out a few competitors this way but eventually anyone competing would have massive regulatory protection in this area.

Convenience is another protective moat. Simply having cars available. But its easy for a car to run 2 versions at once if they feel the demand is there, even if Uber demand exclusive service (again possibly causing regulatory issues), policing it would be nightmare when one can simply have a second phone in the car. And pushing for exclusive would likely shoot themselves in the foot if there is increasing demand from the market elsewhere as some drivers will be forced to jump ship hurting their own service.

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