[msabalau]

Is your theory that absent subsidies no one would prefer an Uber over a taxi? Because if not, presumably Uber could just raise prices and hunker down for 10 years. (Assuming they survive lawsuits and assorted revelations) Is their another clock that prevents them not just from not just growing, but existing?

[usefulcat]

Not a clock, but potential competitors. The barrier to entry is simply too low. For example, look how quickly Fasten/Fare/etc appeared in Austin after Uber left.

As a product, ride sharing is not quite a commodity, but it's not far off either. As a consumer, I care more about what the product does (a better taxi service) and how much it costs than exactly what company is providing it. Absent artificial constraints (e.g. taxi licenses) it's never going to be a high margin business.

So yes, they could hunker down and "exist", but that doesn't seem like a viable strategy to the get the kind of projected growth their current valuation depends on.

It's hard to see what inherent long-term advantages they have. Their core business is already a commodity. Even if they somehow get usable driverless tech better/faster/cheaper than anyone else, at some point that will become a commodity too. When that happens, there won't be much left on which to compete beyond price.

[yourexwasteman]

You bring up some good points. But I think it's important to not forget that Uber has been around 2009, and wasn't spending their entire time trying to achieve driverless vehicles.

Don't doubt for a second that there is a ton of engineering that went on in Uber's app that allows it to handle scale. For example, I was in Austin a few weeks ago and used RideAustin. Same experience as Uber. Then I read on the news that the weekend of SXSW, the entire app was basically crushed from the volume of ride requests and couldn't service anybody.

And besides, who wouldn't use Uber if it cost the same amount as a taxi? For me, the advantages of Uber has always been the quality of service. The drivers are nicer, the cars or cleaner, the drivers don't demand tips nor insist at the last minute that their credit card machine doesn't work at the last minute.

And most importantly of all, I would argue that Uber's inherent long-term advantage is their brand. Anywhere in the world that has Uber, I get the same service. I can go to Honolulu and Uber works the same. I just open the app, punch my destination in, look for my driver and go. Same if I was in Mexico City. Same if I was in Delhi.

However, the same is not true for taxis. In certain places (notably South East Asia as a tourist), you agree on a certain fixed fare before getting into the taxi. In the United States they expect tipping, whereas other countries may not. They might insist their credit card machines aren't working in Toronto. There's no accountability of the driver, no GPS trip details in the app...the list goes on.

I think that kind of brand and user experience is highly valuable.

[untog]

> Anywhere in the world tha

In my experience that's not true at all. In NYC it has to be a qualified black car driver. In LA it can be anyone.

[vannevar]

I personally think they could get away with raising prices, but then the drivers would become their customers, and profit margins for Uber as a dispatcher would be driven very thin---it's just not that hard to run a GPS-driven dispatch service. The only thing that makes an Uber an Uber is a window sticker and an app on the driver's phone. How long before there's an uber-Uber that just sends your request to all the dispatch services and the first one that shows up gets your fare?

[ProblemFactory]

> How long before there's an uber-Uber that just sends your request to all the dispatch services and the first one that shows up gets your fare?

There already is an app for this, with over a billion existing users: Google Maps.

If you search for directions in London, there's a "ride hire" tab next to public transport. It gives you price estimates for Uber, London official taxis, and Hailo - all booked with a button from Google Maps, never having to open the Uber/Taxi/Hailo app.

[__jal]

Whether or not humbling themselves into a mere taxi firm with unsubsidized rates would be competitive, I doubt the investors would allow that.

There's an awful lot of other people's money in Uber. There's an Ayn Rand joke here, but I'll skip it.

[sf_rob]

Ya, the cynic in me thinks the subsidy is to bleed Lyft not retain users until driverless cars are a thing.

[mr_luc]

Yeah - I dislike Uber's tactics as much as the next guy, and the Waymo lawsuit is nuclear.

But they're spending money like crazy because they still feel like it's getting them "upwind" in ways that will be lasting. New markets, and market dominance in existing markets.

If they scaled back their immense outflows, and used profitable markets to subsidize less profitable ones, I'd bet they could be profitable.

[ryanmarsh]

Do you have any data to back this up?