Uber is literally all over the world, though. Google can barely launch a keyboard app outside the US. Or a payment system. Lyft is still constrained entirely to the US and a handful of large Asian cities.
I think people severely underestimate Uber's worldwide push in preparing themselves to be a force to be reckoned with when the autonomous vehicle takes off.
User is ubiquitous only because of its ability to burn an astonishing amount of money. Their bet is that they am do this long enough to make themselves the market leader. I am not convinced that they can continue to lose money at the rate they currently are for the future potential as a monopoly provider. At some point investors are going to ask for a return or bail on the company.
Amazon's biggest quarterly loss ever was about $437 million. That's roughly Uber's average quarterly loss, and Amazon did it on quarterly revenues of $20B, while Uber's revenues are optimistically $5B.
Amazon can collapse really fast. My bet is that if it does it will be almost overnight and everybody will claim that nobody saw it coming.
The reason I believe that it may collapse is because now when I want to buy something online I rather go to Walmart,Target or to the specific brand store. When I think of Amazon the picture that comes to mind is of shady people trying to scam me out of my money. My perception, even if erroneous, right now is that Walmart is less shady than Amazon when it comes to buying merchandize.
If enough people start to feel this way about Amazon there may come a tipping point and the entire company will collapse. Once the tipping point happens I don't think it will be possible for Bezos to reverse it, though he will spend mountains of cash trying to.
Do you actually go to the brand stores though? The other day I needed something that wasn't on Amazon, so I bought it from the retailer directly. And then I remembered why I love Amazon and Prime. The ordering was terrible, and I had to wait 10 days for it to arrive.
With Amazon the purchasing is seamless. That's where they really win. And they just keep making it easier. Now I can order things with my voice (using Alexa).
A few times yes. So far I've had good experiences. For example, when I decided I wanted to get a new leather notebook from my favorite brand [1] They had it in B&N, Amazon and the brand store themselves. I finally decided to buy it from the brand store and had no problems.
Of course, take everything I'm saying with a big grain of sand since this is all anecdotal. I've also purchased from Columbia Sportwear Store and some other brands that I do not remember right now. I guess so far I've been lucky.
Amazon is 1000% easier to use than to compare prices from different places. I also view it as more secure than entering my information on 10 different websites. I don't know that many people share your perception.
I'm the opposite, Amazon is a bajillion times more convenient for me to use than other online stores. And judging from how their business keeps growing, I'm guessing more people are like me than you.
I really doubt they'll let it reach a tipping point. Major companies keep tabs on user sentiment, etc, and tweak their operations accordingly. Small losses like some people finding them shady are expected in a profit maximizing model, much like lawsuits by burnt people are an accepted cost by McDonalds to avoid having the rest of their clients complain about cold coffee.
Do you have any reason to believe that many other people share your perception?
Also, doesn't Amazon have unique defenses against this possibility? If sales suddenly fall off a cliff, Amazon has AWS and lots of B2B products that could keep them afloat for a time while they tried to recover. If people en masse decided to stop shopping at Walmart, they would have nothing to fall back on.
Amazon's infrastructure is not easily replicated. As far as I can see Ubers infrastructure is essentially their app and whatever routing/mapping/job matching algorithm they have. Both of which could be replaced by a better implementation relatively easily.
The same economy of scale that keeps people using Facebook despite constant privacy issues and bad press: the network effect.
That said, Facebook has a much larger network effect than Uber. The friction to create a profile and attend an driver orientation on a competing ride broker network is much smaller than telling your everyone on your Facebook friends list you're moving to Diaspora.
You know it's funny though because I stopped using Uber with the most recent update that completely screwed up the UX. There's a billion variables that will go into which companies succeed and fail.
That may have changed with a recent update. I'm pretty sure I set it to "only when in use", but the app updated soon after. Now I went back to check, and it got set to "never".
Why does Apple even allow apps to remove the "only when in use" option?
How does that work? Is it an iOS specific thing? I haven't launched the Uber app in a while and use Lyft instead - but I just turn location services on when I want to use it and off again afterward. How does the app get any say in the matter?
They changed the UX, you now drag the pin after setting your general location and choosing your destination. I think this is because they want to suggest more efficient pickup locations instead of just wherever you happen to be standing. Felt a little weird at first but I'm already used to it.
Which is fair enough, but nearly every driver I've spoken with hates the pin and a reasonable percentage get lost unless you put a landmark in as the address.
Weird, I've literally never used a landmark and drop pins 100% of the time. I've been taking 2-6 Uber rides a week for about three years. I've never had a problem.
It won't be worth anything because autonomous ride-sharing will be a pricing game. Anyone who undercuts Uber, and there will be plenty of willing and able companies, will beat them.
There are a few other things they could compete on:
- Availability. Who has the largest network and highest availability?
- Car Design. Who has the most comfortable or fully featured cars?
- Safety. Who has the safest car? Who has the safest track record?
It might eventually become a race to the bottom, but I think there's still plenty of opportunity to compete on other fronts for at least the next five years.
Availability barely matters though. When I need a ride I open Lyft, see if they have a car nearby, and if the answer is no, I switch to Uber. The switching cost is so low it's negligible.
We tried this with our fleet of landrovers. Each one has a waterproof interior and is plumbed with sprinkler pipe with hoze-lock connectors on the back of the vehicle so it can be plugged in to the water supply.
It doesn't work, the water spray is not strong enough, or directed enough to remove the mud and sand. We still have to have people going round with water jets to spot clean. A have my doubts a fully automatic system could ever work effectively.
If you are competing on price for commuters the obvious thing is a waterproof interior and some high pressure nozzles in the ceiling. Car drives up to machine with hose, hose attaches, water sprays.
An app that books the cheapest ride for you out of all the ride-sharing companies. Like Kayak but for ride-sharing. This comment is the same as a patent, right?
You know how a person nowadays can register for uber and drive people around?
In the future, maybe people will register their CAR (which can drive itself). So they sit at home, getting work done, while their car is off autonomously driving itself and picking people up. When you want it to come home, just call it home.
Good ideas are a dime a dozen. Whatever you're thinking, a thousand other people on the planet have DEFINITELY thought of as well. The difference between people with ideas, and entrepreneurs, is that entrepreneurs make an attempt to bring that idea to life.
> In the future, maybe people will register their CAR (which can drive itself).
Until an optimized business supporting lots of cars supporting fewer people undercuts the individual owner on price per ride, sure. Uber with individual driver/owners makes some sense, because you need the individual driver no matter what the ownership structure is. But with autonomous cars, fleet ownership is going to win over individual.
Why wouldn't Toyota just launch Toyotas On Demand? If the cost of the car and fuel are the only significant costs, Toyota could probably do it more cheaply than Uber.
Uber's network effect is its driver network. It will find it a lot harder to compete if you no longer need drivers, when it has to compete with real car companies that could be able to undercut them on cost.
> Toyota could probably do it more cheaply than Uber.
I agree. The fact that autonomous cars will likely reduce ownership will put a squeeze on car companies, and it might make sense for them to branch into service areas, as they can get the cars at cost. I guarantee that for 10,000 Camrys purchased by Uber and 10,000 Camrys built and shuffled to a ride service division by Toyota, Toyota's ride-sharing division will get the sweeter deal on price.
Put another way, it's much easier for Toyota to start a ride service company than it is for Uber to start manufacturing cars to get them at cost.
I think that is suboptimal vertical integration. Hertz is a fleet buyer for a good reason; it doesn't want to be reliant on its Hertz Automotive subsidiary to meet a production quota. It doesn't want that capital expenditure. It wants to buy cars at volume and sell them as they depreciate.
Ah, but the car companies have already expended that capital. The problem here is they will have a lot of building capacity from all the factories they own, and possibly less to build with that capacity. There's nothing stopping them from buying extra needed capacity from another company, but in the meantime it may help them fill the lack of utilization they may see. At some point, some factories will need modernization as normal, and they can choose at that point to reduce factory capacity.
The point is that it's a possible strategy to get them from point A to point B when they've already banked heavily on certain future production trends if they've overestimated.
Hertz lives in an equilibrium where lots of people buy and operator their own cars. Autonomous cars may well move us to an equilibrium where most people do not own cars and instead rely on services. That totally changes the economics of the situation.
How does it change the economics of the situation? More volume or shorter rentals? Would having more frequent rentals mean that rental companies would want to produce their own cars?
It isn't efficient for Toyota to fully stock every city in the world for peak demand, and yet that's what they'd have to do to compete with the surging multi-manufacturer fleet of Uber.
They don't need to stock for peak demand. They don't need a monopoly (nor will they be permitted to get one).
To succeed worldwide, they simply need to be as good as Uber, but cheaper. And if the capital cost of the car becomes half of the cost base of taxis, a 10% saving matters.
To get as big as Uber means they need to be as convenient which means that there's always a car available. Uber handles that by being multi-brand, and by incentivizing their fleet with surge pricing.
Toyota would have to prepare for worst-case load and let those cars sit idle to keep them available. And they'd have to do that in almost every city in the world or their app would just be another local annoyance.
Also, if you order a Toyota and a Ford shows up you're going to laugh and tweet it.
On the other hand, it does give them a stable production target which would level out manufacturing spikes...
> On the other hand, it does give them a stable production target which would level out manufacturing spikes...
That's the underlying assumption I was working with. If they've invested heavily in production yet they see a downturn in individual ownership, it's a way to capitalize on that resource (factories) to stabilize production until some factories reach end-of-life and have theoretically paid for themselves. Factories which require large capital expenditure are not something you want to see sitting idle. Every year is another year where the tooling is becoming more obsolete.
I take it that Uber is betting on being thee brand for ride sharing. Maintaining market leadership is critically important for when autonomous cars take off. Even if any car manufacturer were able to undermine Uber on cost, Uber will already have a significant upper hand with people already seeing it as the company you call to get somewhere. The only question I ask myself when looking to go somewhere is, Uber or Lyft?
If car manufacturers tried to clone what Uber has built they'll probably flop on making the technology usable, and the experience may just be overall frustrating.
People will still buy Rolls-Royce or Mercedes S-class for the comfort, but most Toyota customers don't care if they're car pooling with 3 other people or sitting in a car that's not their own.
Furthermore, if there are a bunch of self-driving car services, that service will be commoditized the same way cabs are. These ride-giving services will [and kind of already do] only compete on price.
Uber's ride sharing model is fine for the major markets around the world (that have accepted it), but I think they're going to have to stretch quite a bit to successfully operate elsewhere.
Uber's autonomous trucking model is likely to aid in the complete change of that industry, though.
Not only is Uber no longer burning $1B to be in China, they now own a 20% stake in what is now a monopoly in China to (ostensibly) make all of it back and then some.
Yes, Uber may have a global precense, but that's from burning VC cash and they're not exactly successful in major markets like China. And for what? Uber is essentially a messaging app between users and drivers, and their users/drivers are not loyal.
Uber as a self-driving company would need to sell hardware to drivers to convert their vehicles into self-driving cars, and I don't think they'll have the bank to get that far, especially against larger companies with deeper pockets and existing hardware experience/partnerships.
They're already a force to be reckoned with. How do you compete against a company that might as well burn cash in the streets?
The rich are buying the future on the backs of the working class. When uber goes under, the jobs won't come back, but transit can't be that cheap. It's not like the cost of a ride was actually based on the cost of the car OR the labor.
I think people severely underestimate Uber's worldwide push in preparing themselves to be a force to be reckoned with when the autonomous vehicle takes off.