[crdb]

> Uber could operate at breakeven by raising prices slightly more than 10%. [...] Uber could be highly profitable by raising prices 20%.

No, because the demand would be different at those price points, and lower demand might not compensate for high fixed costs.

I got a timely reminder yesterday in (newly Grab-monopoly) Singapore, taking a Grab for $15 that used to cost me $3-6 on Uber.

I took public transport back. One ride was enough to shake me out of my years-trained habit of taking Uber/Grab everywhere when it cost only twice the MRT or bus ride, never really looking at the price.

Travis Kalanick's apparent vision was to create an enormous amount of demand for private drivers by dropping the price to the floor, thus creating the volume needed to make the numbers work, in the same way that Standard Oil's massive facilities dropped the price low enough for Rockefeller to bankrupt all his competitors.

[uptown]

"Travis Kalanick's apparent vision was to create an enormous amount of demand for private drivers by dropping the price to the floor, thus creating the volume needed to make the numbers work"

The WSJ summarized it nicely in print:

https://twitter.com/neilanalien/status/627873374505562112?la...

[lotsofpulp]

Difference was you were in Singapore, where they have clean and reliable public transit. Many people would definitely pay $10 to $15 more to take a private car rather than public transit in the US.

[askafriend]

I can tell you right now that 10% wouldn't shift demand meaningfully in cities like San Francisco. I don't think most people would even notice a 10% increase to be honest.

Of course, they're probably already profitable in major cities like SF and pricing is probably already adjusted to reflect the maturity of the market.

People need to start talking about these companies on a per-market basis. The broad 10% number doesn't make sense since every market that these companies are in is at a different stage of adoption.

[JumpCrisscross]

> the demand would be different at those price points

Quantity demanded. Demand describes the entire curve [1]. :)

[1] https://en.m.wikipedia.org/wiki/Demand_curve

[hardlianotion]

Possibly, but 10% is a lot smaller than the 250%-500% rise you experienced.