The network effects will take care of the competition.
Will it? Why? Unlike social networks, I don't see why would Uber benefit particularly from network effects; it doesn't even have switching costs, since the consumer can use both concurrently.
Will it? Why? Unlike social networks, I don't see why would Uber benefit particularly from network effects; it doesn't even have switching costs, since the consumer can use both concurrently.
A consumer can use Uber and a competitor. This, however, is not unlike social networks, it is entirely like social networks. A consumer can use two social networks as well. However, in practice if one car service or social network does a good enough job the consumer is unlikely to use another.
As nickpinkston said, those are economies of scale, which is a related concept, but not the same.
A consumer can use two social networks as well.
Yes, but this is where the difference highlighted above kicks in: in a social network, the total number of users is not as relevant as the number of connections the user has, so the user can be "stuck" even if he feels the product is not good enough. In a product like Uber, there's no such effect; people can switch as soon as they feel like trying the alternatives.
This is still network effects, just with two different parts. The drivers benefit when there are more users, and the users benefit when there are more drivers. It falls clearly into the definition of network externalities when you take the drivers into account.
But the absolute numbers of each do not matter. Adding more drivers does not benefit existing users if more users are added as well to cause those drivers to be active on trips whenever a new user tries to book a trip. And adding more users without adding more drivers is, of course, bad for the users, because it produces a scarcity of cars.
This is pretty much wholly unrelated to the idea of network effects.
If all the calls are going to Uber, the drivers will too. If Gett/others have no drivers, they won't be able to build a base of customers.
I believe this is what the OP was referring to with network effects.