Can someone explain this to me? What competitive edge does Uber have that would stop literally any well-funded company from entering their market as a competitor? I know they have pervasive brand awareness and a large driver network but does that really justify a $69B valuation? What's to stop consumers and drivers from jumping ship en masse?
> I know they have pervasive brand awareness and a large driver network
Look what happened to Uber in China where a local competitor had pervasive brand awareness and a large driver network before Uber got established there.
Uber bled cash, and bled some more cash, and bled some more cash while trying to build market share, and then finally gave up and sold their business to their competitor.
That's basically what's stopping a well-funded company from entering the market as a competitor, an aversion to bleeding cash to build market share which they might not ever be able to do.
And by "that won't last long," I mean that era has seemingly already passed. The quality degradations in the past few months alone in NYC have been serious enough for me to default to Juno whenever possible. I'm not saying Juno is sustainable either (I don't know), but so long as any ridesharing app is willing to burn investor capital at a loss, I'm willing to benefit from said loss. I have no allegiance to Uber and I doubt anyone else does either.
An AirBNB for self-driving cars will be as cheap or cheaper to operate: no overhead for managing or paying drivers, no need to invest your own capital upfront to buy cars or loan money for cars. You just connect car owners to people who want to rent their car for 30 minutes.
Even better: No need to subsidise fares to undercut competitors, just let your owners pick whatever price they like. Most of them will underprice for wear and tear, just as they already do, at no cost to the company making the connections between owners and riders. Meanwhile, Uber can't really ignore depreciation or wear and tear, even though it tries to place them at arm's length through loans to drivers.
The economies of scale in such a market are weakened. Sure, you can buy a giant fleet of vehicles at a discount. But your competitors don't need to and will never need to. And if your competitors have massive piles of their own cash, which they don't need hype to acquire, you're looking at a fairly brutal car-wreck.
Lyft won't kill Uber. Google Lifts will.
This is, of course, massively risky and commits tremendous resources in a very short time. There is no good way of evaluating how this will go, because(as is typical in this generation of tech companies) the KPIs might be the wrong ones for a sustainable business and this gets figured out too late to change course. But that's what the investors were sold on, and that's what they're going to build until the day the cash runs out.
The other two manufacture cars, Uber manufactures, well, nothing.
The economic value they have comes from 'creating' a market and being first in it (brand recognition), which gives them a competitive edge over newcomers. In addition, from investors, they have a 'war chest' which allows them to make the barriers to entry harder.
Some of these companies, I think, have realized that they are too dependent on the will of their suppliers; so now, they're actually manufacturing or creating something tied solely to the company. For example, Uber investing in self-driving cars.
https://news.ycombinator.com/item?id=12759649
Tl;Dr: Uberkiller focusing on Hitchhiking, proof of identity, and set-your-own-rates. Skims from % of paid transactions.
Copying Uber at a small scale with a limited feature set is feasible, just like making a little boutique search engine to compete with Google is feasible. But where do you go from there? Seriously competing means you need to do better than them, and with Uber already have advantages of scale and brand, what's your angle?
> Can someone explain this to me? What competitive edge does Uber have that would stop literally any well-funded company from entering their market as a competitor?
As long as it's possible for a small group to compete with uber even on the margins, Uber will never have monopoly pricing power. Someone can always start a small company to take people to the airport, pick up executives, etc. Anecdotally, most serious travelers I know in NYC have reverted back to using car services to do airport trips, since it's a much more predictable experience than Uber.
As long as that's the case Uber will never reap the windfall profits that accrue to a monopoly. Which makes me seriously wonder why they would burn such remarkable amounts of money thinking they can establish one.