[sherlock_h]

Over the long run, at least in the U.S. it seems like Uber/Lyft are edging towards a comfortable duopoly. Usually their prices move in lockstep (each has insights into the other company's prices through email receipt intelligence, credit card intelligence, webscraping, etc.). And their services are fairly exchangeable. For either one to win there needs to be either a massive cost advantage or some sort of stickiness factor – which neither have. Will be fun to follow the '19 IPO season with Postmates on the horizon and DoorDash fat with Softbank money

[phamilton]

> comfortable duopoly

I don't think they have hit true market dynamics yet (rides are subsidized), so comfortable might be a strong word here.

[reitzensteinm]

Do you have a source for the ride subsidization? My understanding is that for mature markets they're making a decent profit; their losses from subsidies are from new markets, or new initiatives in existing markets (Pool, Eats etc).

There have been a number of "Uber is cheaper than taxis because they are losing money" newspaper articles, but they usually point to the loss of the company as a whole.

[bduerst]

I don't think there's clear metrics into market and price performance because they're still privately traded, and changing consistently.

[trimbo]

> Uber/Lyft are edging towards a comfortable duopoly

A duopoly the likes of which not seen since that of Yellow and Checker.

[deepVoid]

I would not call it comfortable since both are bleeding money every year. In addition, Waymo, Cruise etc. are all trying hard to put robot taxi's on the road. When that day comes, it will be interesting.

[jacques_chester]

I suspect car companies will move in at that point to disintermediate the ride companies, possibly spinning up subsidiaries using fleet purchasing to get around their dealership networks.

It's just as easy to rent a self-driving Camry from Toyota.

Oh and then there's the thing where Google and Apple and probably a hundred startup hopefuls scraping APIs will try to disintermediate them at the device.

[erikpukinskis]

Waymo has robot taxis on the road already.

[fierro]

don't discount the ability for either company to build that stickiness. They know this is important.

Think credit cards, collaboration with last-mile transportation (Uber + Bird), discounts on restaurants, things of that nature. They can and are working towards building more of a brand ecosystem.

[sherlock_h]

That's what they are both trying to do but I just don't see the big breakthrough there yet. Even Ridesharing + X (e.g. bikes or scooters) they are moving the same direction. really curious to see how this plays out – pretty exciting from a spectator perspective.

[fierro]

certainly exciting!

[vkou]

Restaurants are the most price-sensitive, tight-margin business you can think of. Groupon was a famous disaster for them.

Who is going to pay for these discounts? Uber's investors?

[maxxxxx]

Until the money runs out.

[celticninja]

It's a race to either profitability or the death of the opposition, at which point subsidies disappear and prices rise, so does Ubers cut of the fares.

[maxxxxx]

They can't really raise prices because otherwise local taxi companies will start again.

[celticninja]

once you knock out the current infrastructure it is hard for some one to reenter and compete. And in some locations they may lose but on the whole they would maintain 85%+ market share and set the prices. Local firms would know they are operating almost with permission of e.g. Uber, because Uber (or whoever wins) could set local prices lower to put the firm out of business again. This time however the subsidy would be by higher prices across the rest of their market.

[munk-a]

And this will last until... self-driving cars enter the picture and bankrupt them both.

[untog]

Given the amount Uber has spent on self driving cars, I doubt they'd let themselves get replaced.

Given the money the entire industry has spent on self driving cars and gotten little reward for, I don't think anyone is getting replaced for a very long time.

[warp_factor]

Uber has spent a lot of money on Self Driving car (remember the Otto fiasco ?) and is hypothetically the least advanced of them all!

[ham_sandwich]

Yes, from the looks of it, they are well behind in self-driving tech. If it’s inevitable that self-driving will bankrupt them, why would anyone invest in them at all?

The two scenarios I can see are

1). That their ride-matching platform will still play a role in a self-driving world. However, I think a worst case for Uber is Waymo gets there first and then Google can almost trivially replace Uber with their own matching platform.

2.) They acquire a startup that has a successful direct self-driving play.

Either way, the economics of their core offering changes drastically. I have a hard time believing investors in Uber aren’t pricing this in at least somewhat accurately.

[macintux]

There's always the possibility of 3) No one achieves sustainable self-driving in the short to medium term.

[Barrin92]

Also, uber has no assets. Are they going to add the overhead of an autonomous car fleet in every city on top of their already crazy cash burn rate?

I don't see how this business model even works.

[icedchai]

That's a ton of time. Self-driving cars are decades out.

[hopler]

There's a time limit on this. 10years later, it's much easier to clone Uber's business and recruit the same drivers (Uber's desert for not hiring drivers as proper employees)