We'll see what you think of the cab industry when uber raises their prices by 3 times in order to become profitable, after the cabbies all gone.
People always claim this will happen, and it never seems to. If Uber tripled prices, a competitor would start up to cut into their market share.
I'm not concerned with the price of rides increasing, I'm concerned with the unemployment our country is going to get punched in the face with. Between cab drivers and OTR (truckers), we're going to have a MUCH bigger problem on our hands than we've seen since Detroit collapsed (which was arguably less of an issue since it occurred over a longer period of time).
Uber will run out of money long before we have self-driving cars.
This is a very good point. Also consider that many more people need help with groceries than with luggage.
Heck, with amazon groceries and other similar services, why do they even need to go to the store?
As for "at their home" - if you think that the cross section of elderly people who:
Can't lift their bag into a car.
Travel frequently.
Have no friends or family to help.
Have no neighbors to help.
Don't live in assisted living.
Is enough to sustain the industry, I think you're in for a rude awakening.
Self-driving would take away a big chunk of that market, but estimates vary on when that becomes a reality. With every major technology improvement, there were massive employment and social shifts. Wars and revolutions were often side effects. However, I don't think the percentage of the population engaged in the taxicab and trucking industries are enough to destabilize society. By its nature, the employees in that business are often transitory. Perhaps there will be legislation to force self-driving vehicles such as taxicabs and commercial trucks to keep a human "driver" to supervise and assist when the vehicle gets into situations outside of its programming.
Due to Uber's network effects you could say they'd have even greater power to change prices dramatically. Let's say Uber became the dominant transportation network in a particular geography and then trebled prices. Any new competitor has to both lure riders and drivers from Uber. Riders, sure they can be lured by cheaper travel but drivers want to earn the most money. Uber could simply double how much they paid drivers. All the existing drivers (and any new drivers) would rather work for Uber and get paid more. In fact they would have a vested interest in seeing the competitor fail.
1: https://en.wikipedia.org/wiki/Phoebus_cartel
2: https://en.wikipedia.org/wiki/Bell_System#Nationwide_monopol...
3: https://en.wikipedia.org/wiki/General_Motors_streetcar_consp...
Bell System ended up being heavily regulated, and it's service was second to none. It was nearly a natural monopoly because of the cost of running phone lines. If Uber ever became that, we could resolve any problems with regulation.
But in reality Uber can never become a natural monopoly, entry into their market is too easy and just gets easier over time as costs decline for systems development/operation.
What will happen if they succeed is that Uber will become a valuable brand, people will prefer it, and other competitors will be forced to compete solely on price. So far brand building is something Uber is struggling with.
I think it's unlikely that the current political climate will allow such problems to be solved with regulation.
Politics is politics. I was just re-listening to Dan Carlin's podcast series on the fall of Rome. He starts with the Graccus brothers, who were populists. Rome had an elitist power structure, basically the founding families controlled the senate, with the Equestrians and Plebes below them (and slaves below that).
The Graccus brothers got themselves elected Tribunes, which were roles intended to check the power of the senate, and took those roles to push forward land and other reforms to check the power of the senate and give things to the middle class and poor (some would say to buy the mob).
To stop this, the Senate at one point recruited their own Tribune candidate, and he didn't promise to rollback the Graccus reforms, in fact he did the opposite. Instead of giving away land for cheap prices to the Plebes, he offered them free land. He offered even more bread subsidies, and instead of the state paying for a foreign colony for the plebes, he offered to pay for 12 of them. And he got elected to replace Gaius Gracchus.
All politicians are sensitive to where the wind is blowing and most try to take advantage from it.
Uber's service costs pennies per ride to provide, drivers pay them dollars per ride to participate. There is almost no chance Uber can't be profitable at current prices. The only question is whether prices need to rise to ensure a decent supply of drivers.
There's some truth to that: whenever I bother to check I find that Amazon is no longer price-competitive with brick-and-mortar.
> If Uber tripled prices, a competitor would start up to cut into their market share.
...unless there's no actual profit at anything less than 3x the current prices. Isn't Uber running on a VC subsidy right now?
3x the current prices would put us at roughly what taking the cab looked at before Uber cost-wise.
Also public transit, car rentals, etc.
Car rental because you have to pick up the car and later drop it off and the costs are significantly higher than a taxi, and public transportation because it's slower, more crowded (therefore more difficult with luggage) and doesn't always go directly where you want to go.
On a city-wide scale you can't expect car rentals and public transportation to be a valid replacement for a taxi/taxi-like service.
I love that I live in one of the few cities with a train that leaves directly from the airport.
(I now wonder how many others I don't know about from personal experience!)
> and who do you think is paying for your cheap Lyft trips?
Mostly my own contribution, and partially VC money.
1. http://www.cnbc.com/2017/01/12/pipsqueak-lyft-could-reach-pr...
Answer is they provide great rates for passengers - see all of the anecdotal evidence here - and great pay for drivers.
It literally is "too good to be true."
It's just an app--with a $20B valuation and about as much in free cash.
My guess is they are spending a lot of money expanding. Once done, they will be instantly profitable.
The genie is out of the bottle.
Except pharma, telecom, energy, airlines and one or two others...
I am not sure who would like taxi industry to pharma?