[thisisit]

This whole thing reminds of Buffett, Charlie Munger and the textile mill machinery story. I need to find the exact link for it though. Here's what I can remember from top of my head:

They were offered more "efficient" machinery, which could manufacture more textiles than the old machines. "It will pay for itself" was the pitch. But they refused as more efficient machines meant they had to pass on the savings to the customers. With lower prices, machinery was not exactly going to pay for itself.

I guess that will be the case for Uber and Lyft too. Any efficiency with low enough barrier will mean no one is reaping profits rather passing it on to the customers and hence making less money.

Edit:

Found the link:

https://www.farnamstreetblog.com/a-lesson-on-worldly-wisdom/

[lgas]

I don't understand why they would have to lower prices just because they bought more efficient machines. That defeats the point (as mentioned) but has two obvious solutions that I can think of: keep prices flat, or raise prices.

[sumedh]

They have to lower prices because their competitors buy the same machines and thy pass on the savings to the customers, xo your company needs to do that as well.

That is the problem with commodity business because consumers dont care where there corn or cloth material comes from. Consumers will go for the cheapest option.

[lgas]

It doesn't make sense that they would refuse to buy the efficient machines then... because they would be forced out of the market by people who did.

[thisisit]

It's all about the moat. If other people have the same efficient machines they will try to get price advantage by lowering prices. And because one person does it, everyone follows the suit, starting the race to the bottom.

I have included a link in my previous post where Charlie Munger talked about this.

[corruptbytes]

I don't think self driving cars will ever have a low enough barrier. You need data to train the cars, and you need a lot of data.

Google is mining millions of captchas for their self driving cars, they could publish their algorithms for it too, but unless you have access to all that beautiful training set, it wouldn't be much of use.

I have no idea how lyft or uber is going to get that much data, maybe potentially buy paying drivers more to stick sensors on their cars to collect insane amounts of data? But it's gonna be a tricky thing to get right