If they start making money in a given city, a competitor can sweep in and take the city from them. I know they are planning a monopoly on self-driving taxis. But as of today, the valuation seems to be 3 orders of magnitude off.
Odd. I see their network effect as rather strong. Why would a driver use a new competitor app if the customers aren't there? Why would a customer download another app they haven't used before or heard of, especially if the rides aren't there?
See: https://en.wikipedia.org/wiki/Perfect_competition#/media/Fil...
Because there is almost zero cost for the driver to sign up for yet another app. Already today, many drivers use multiple apps.
> Why would a customer download another app they haven't used before or heard of, especially if the rides aren't there?
He will hear about it and download it if the rides are cheaper.
Uber uses their network effect to cut prices and force the competitor out. They have done this in a number of cities. No city has ever been "taken" from Uber (in the US at least).
edit: and Lyft in SF