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Comment by untog | Hacker News Reader

But will they continue to be profitable?

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?

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Pool. One-off rides are fungible; shared ride infrastructure is only cost-effective with scale.

If you compete on price through dumping, then the party with the most cash reserves (Uber) survives and bankrupts the competitors (Lyft).

That's completely iffy.

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).

But Lyft is now partially owned by General Motors, who have every incentive to make Lyft the winner here.

Driverless cars and state of the art engineering infrastructure.

Driverless cars at least half a decade if not a decade away from widespread adoption in cities. Who's to say they'll last that long? What does "state of the art engineering infrastructure" give users? I don't recall Lyft's app ever failing on me.

Finally, Uber get's pushed out of relevance by driverless cars, from BMW, Mercedes-Benz, Chevy, Ford, etc., who will ultimately never let them have this market.

Driverless cars don't exist and there's literally zero evidence that Uber has a stronger claim on that market than any other aspiring company.

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.

If anything Driveless cars is a huge threat to uber. Buying the cars would be a massive capital investment. Right now they rely on their employees/contractors to bring a 20k+ asset to work with them.

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.

And you know GM is invested in and partnered with Lyft, right? GM also fully acquired Sidecar, the recently shuttered Lyft/Uber competitor.

Driverless cars will happen at the same time for everyone. Uber's competitors will get them at the same time they do. It will not amount to a long-term or even short-term advantage.

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