As soon as one of them increase prices to generate profit ill just move on to the next ride sharing app, then the next, then the next.
You'd need a price fixing scheme worthy of British Airways make this work.
You'd need a price fixing scheme worthy of British Airways make this work.
What's actually the case, is the next clone will need $20 or $30 billion to fight and undercut Uber's entrenched brand, functioning system and scaled up position. And even in that case, the odds of winning against the large incumbents is low. It will cost even more to beat Uber via the undercut game than what Uber has already spent, because you have to take the market away from them - always a dramatically more expensive and difficult proposition.
VCs are not going to continue to burn massive amounts of capital trying to fund the next loss-making ride hailing company. The next $10 or $20 billion to put into an Uber clone in its major markets, does not exist and it will never exist.
Few things would scare a VC more than having the pitch that your plan is to destroy twice as much capital as what Uber did, to unseat Uber's entreched position, with nothing to differentiate you other than the speed at which you destroy capital.
That's why nobody is doing it right now. There isn't another Lyft, much less another Uber. Softbank isn't looking to drop $20 billion to fund the next Uber, to fight with Uber, in the US and similar markets that Uber dominates now.
Once prices get back to a sustainable level it will be more appealing for other entrants and they won't need to burn that much money.
Users seem to go with whatever is cheapest. Uber doesn’t have entrenched anything
Even Lyfts subscription plan seems tailored to people who take one to work every day, and how many jobs really compensate you well enough to hail a private vehicle 10+ times a week? Maybe if you make north of 200k a year it seems great, but if I took one to work I'd be blowing $70-100+ a week on commuting alone, about the going rate of a bicycle on craigslist, and over twice as much as an unlimited NYC metro pass.
In other words, the company that delivers autonomous won't need $10B to make a cloned Uber app. Since the driver is the biggest cost for Uber, riders will gleefully switch to the clone at even cheaper prices.
Uber is "the first airline" for ride sharing service. Lyft is "the second airline".
The way that you beat an airline is not to copy it's service. It's to figure out it's most profitable routes and provide cheaper service on only those routes. Ignore the unprofitable routes.
If Uber can make a good profit in one city, and loses money in hundreds of other cities, someone will come along and compete with them in just the one city.
You don't need $20 billion to beat Uber. You only need to compete in their 5 most profitable cities.
Imagine getting Uber Black upgrade for free if you've done 100 rides with them in a year....
Even American Airlines declared bankruptcy in 2011 and emerged from it in 2013... Delta in 2005. United in 2002.
[0] http://airlines.org/dataset/u-s-bankruptcies-and-services-ce...