P.S: Also mixed messaging (http://www.wsj.com/articles/fidelity-in-reversal-raises-valu...). Maybe its not all sky-is-falling doom and gloom.
Most Uber drivers I ride with have at least one other ride share app open, none of them have a loyalty to the company. In fact, many actively dislike it. And riders I talk to aren't loyal either - they'll happily flip between Lyft, Uber, and whatever else is available, depending on who is offering a discount code that week. I don't doubt that Uber has a better investment in the future (self driving cars and the like) but it remains to be seen if they'll make it that far - that future is still a ways off.
By itself that wouldn't be so drastic, but Uber has taken on a lot of funding and obstinately refused to go public. It could put pressure on other companies that are currently quite happily staying private, too.
Imagine a new startup launches today offering ridesharing in NYC. Drivers - who already have Lyft running - add the app to their roster. After some advertising spend, so do users. What is Uber's strategy to stop them? Spend more money, usually - more advertising! More drivers! Is that sustainable?
What is Uber's moat?
Engineering for an app like this is non-trivial but hardly insurmountable.
The one advantage they do have is network effect, the more drivers and users they have the quicker it is to get a ride and more lucrative for drivers. That does matter, the question is how much.
Someone like Hertz or a General Motors already have fleets and know how to manage them. All they have to do is engineer an app.
What is easier? A nationwide vehicle fleet or an app that connects drivers to riders.
Maybe the party with biggest publicity budget wins, or maybe it's the one with lower overhead (in things like publicity), or maybe it's the one that pays better the drivers...
Or maybe there comes a company with a really open network, and destroys the entire market in exchange for a couple million (what is a good thing, by the way).
Their profitability in America, means they are in no
threat of "dying".
http://www.businessinsider.com/uber-says-its-profitable-in-t...
Citing previously undisclosed financial documents,
Bloomberg pegs Uber’s February US profit per ride at
$0.19 (not including “interest, taxes, and equity-based
compensation for employees").
Does that $0.19 come from (total margins from US rides - total US operating expenses) / (total number of US rides), or is it (total user payment - total driver costs) / (total number of US rides). The former means that they're actually bringing in about 10m in total net profit per month, which isn't terrible. The latter means they're probably not doing so well.
In Uber's case it turns out "better than a yellow cab" is a pretty low bar to clear, and neither drivers nor consumers have much loyalty and are highly price sensitive, creating a race to the bottom.
In Square's case it turns out merchants will gladly use a slightly-worse iPad UI for payments if the fees are lower, and consumers don't really care regardless. Again, race to the bottom.
Right now it looks like Uber is engaged in an epic price war in many markets where the prices are unsustainably low - and these prices are sustained by a combination of setting VC cash on fire and squeezing driver pay. Having no insider information into Uber, I'm a bit skeptical that they're that close to be sustainably profitable.
My mother drives in SF for Uber and Lyft. She makes about one quarter (with the same time/schedule) she did less than two years ago.
Some call this _market efficiency_ and point out this is functioning as designed.
My mother, she's moving back to Washington State.
Better than a yellow cab (UberX) isn't the interesting part of Uber's business, Pool (and a swarm of dynamically routed cars buzzing around a city, picking up and dropping off people and cargo) is. Further, that swarm becomes more cost-effective the larger it is.
People I talk to about this sort of thing USE online services, but we're also fully backed up and ready to move at a moment's notice. Probably a consequence of watching so many of these things go up in smoke.
I agree but not, I think, in the way you intend. If someone asks for a Kleenex and they get passed a non-Kleenex brand tissue, they rarely object. "Uber" could just become the 21st Century "Hoover".
Uber still has to compete on price, for sure. But there's certainly friction to A) download non-Uber ride sharing apps and (even greater IMO) B) open multiple apps to compare prices.
If Uber's price doesn't seem unreasonably high, what reason is there for people to compare?
that gives me an idea...
Some of these are still around but most are not. Not sure if the ride-sharing space will turn out the same or not. I feel at least Uber and Lyft are probably safe.
> that gives me an idea...
...for the ride service fare and time comparison feature in Google Maps?
Google Maps (on Android, at least, but I assume generally, I just haven't checked elsewhere) has that feature already, though when I've checked what it showed it only listed Uber. Even if it is currently Uber-only, the feature's UI makes very clear that its intended to be a ride service time & cost estimate comparison feature, so...
My friend wrote it. Includes other modes of transportation like buses and scooter-shares.
And so have customers. It's like grocery shopping. One store might be a little cleaner than another, have longer hours or feel safer, but, mostly, you go with the low-price leader.
It looks like they last raised money at a $62.5 billion valuation [1], which suggests that investors are expecting the company to operate at a global level. Unfortunately, Uber is facing extremely stiff competition in China [2] and India [3]. There's also the well-publicized tension between Uber and various European companies. And that's not even taking into account increased regulation in US cities like San Francisco [4].
So, while Uber is clearly a successful company - how successful will it be? $62.5 billion dollars successful? My guess would be no, which would drive a correction for the company.
[1] http://www.bloomberg.com/news/articles/2015-12-03/uber-raise... [2] http://fortune.com/2015/07/08/uber-didi-kuaidi-china-funding... [3] http://qz.com/645258/uber-sues-ola-for-allegedly-using-the-s... [4] http://www.sfgate.com/bayarea/article/SF-to-require-Lyft-Ube...
Yea--Uber has always rubbed me the wrong way, on so many levels.
This would be a win-win for many reasons, one of which would be that cities would keep the revenue from these services, or they could run it at cost and send more money to the drivers (thus stimulating the local economy and not VC valuations)
At their HQ the bottom floor had astroturf and a lot of windows. This is where the pet day care was for all of the employees. You'd walk past and see how great it was to work there - just look at the pet day care!
When they shut down, they shut down so suddenly that nobody cleaned up that area.
I forget how long that space was vacant, but I want to say it was roughly a year. You'd walk by the space and you'd see little doggie turds in various forms of decay on the nearly-neon astroturf. The dot com boom in a nutshell!
One challenge is that when things aren't going well companies are much quieter than when companies are going well.
[1]: http://www.nytimes.com/2016/01/15/technology/foursquare-rais...