Uber Is Going to 0, and Benchmark Knows It | Hacker News Reader

Uber Is Going to 0, and Benchmark Knows It

thinkgrowth.org

32 pointsmailarchis7 comments

This article goes off the rails when it starts praising Airbnb. Most the arguments levied against Uber could equally apply to Airbnb.

I don't really know how you start with the premise that travel isn't a race to the bottom. If you think customers have zero loyalty toward hired cars then you haven't dealt with travel customers. Business notwithstanding, travel a typically a large expense in both money and time. Customers will aggressively shop for the lowest prices and Airbnb is just one category of alternative for customers looking to travel -- BnBAir isn't even close to their biggest threat, although the rise of meta-travel agencies does suggest that it might be in the future.

Also, hotels list on many different travel sites. Why wouldn't AirBnB hosts? It's basically zero cost for potentially more customers. Hell hosts would probably be willing to list on 10+ individual sites for all it costs them.

Yea they completely brushed over the likes of VRBO and other competitors.

I think the biggest similarity is consumer mindshare and the art of turning your brand into a verb.

Even if I'm ordering a Lyft, in conversation I'll say I'm "ubering".

Likewise when booking an "AirBnB", I'll browse all sorts of alternative sites just to spot check locations/prices/etc.

The real limit to the market is how many players are in the game.

Remember when Austin Texas had a fingerprinting law that prevented Uber/Lyft from operating inside the city? There were a million and one alternative services, but generally both drivers and riders would recommend and use one or two based on personal experience/word of mouth recommendations. (ie- Ride with a driver that provides a good experience and who talks about which ones he or she uses and likes, then you will tend towards those apps rather than the smattering of others)

In markets like these where both the buyer and seller are using a 3rd party to accomplish a secured transaction, there seems to be only room for a few. This generally is down to mindshare of both the buyers and sellers, which comes down to marketing and getting your name out there.

Uber and AirBnB are in the same boat. They have the market's mindshare and brand name recognition... and thats about it.

I think you missed the point about the local vs international services. AirBNB has potential competitors, but effectively those competitors need to have an international or at least national scope. AirBnB makes most of its money on tourists that will use their service over an over again in a different city. Most people will use something like ChicagoAirBnB.com once when they go to Chicago for their vacation that year. Thus, ChicagoAirBnB.com would need to make their entire customer acquisition cost back in one transaction. That's far less viable than AirBnB which can spread it out over dozens of transactions. AirBnB's problem (if it has one) is that there's dozens of competitors with that scope in the online travel industry. They are just missing the supply.

Compare with ride sharing. In that case, your business is almost entirely local. Someone that uses ChicagoUber will likely use it for as long as they live in Chicago. So you can spend $20 (or $100, or $200) to acquire that customer and make it back over time. The result is that Uber has to defend their turf against theoretically thousands of competitors across the globe.

> tourists that will use their service over an over again in a different city

This is the part that I don't think follows. Why would they? There are a million different travel sites and people do their homework. There's nothing preventing people from using different booking sites for each trip. I see an advantage in having a large portfolio of hosts but I don't think they will ever be at the point of charging a premium because they have lock-in.

Except that the Uber app works in every city and has lots of drivers in every city. Most People aren’t going to download the app for some local company to test if they have drivers. They know Uber works and that it will work when they travel. Brand matters and Ubers works.

Booking.com and expedia alresdy exist as competitors who could enter the space more aggressively. Right now I think cross listing is an actual burden for room owners. That could change though if competitors start accepting "accepted to do business on Airbnb" as a pass to be on their network.

"Moving first is a tactic, not a goal….It’s much better to be a last mover."

That reminds me of the fact that I always find things in the last place I look.

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