[clairity]

> "...you just need to sign up 5000 or so drivers. At a $5 signup bonus that costs like $25,000."

that's nowhere near the cost of acquisition for a driver. having worked on driver acquisition, i can tell you it's hundreds of dollars, not $5.

[joshe]

Sure, but neither have a guaranteed cash signup bonus. They have guaranteed first month earnings and bonuses per ride.

Uber trying to raise it's fees is an invitation for someone else to jump in with lower fees and compete. You don't need any kind of national reputation, taxi companies never did. You can just compete city by city.

That is lack of pricing power.

[jngreenlee]

Not trying to be rude, but can you explain your credibility a little further? I'm sure it would be interesting and add to the discussion.

[vladd]

Uber and Lyft businesses are a marketplace that benefits from the effects of scale: when lots of drivers and customers are present, supply and demand are near each other and balance out nicely. It also suffers from the chicken and the egg problem in new cities being launched: there's no driver close-enough in order to ensure low latency for new orders.

To mitigate that, Uber and Lyft heavily subsidize launches in new cities by pre-signing up drivers well ahead of initial demand, to ensure low minute order fulfillment. This is done by giving drivers activity bonuses in the initial new-city market formation stage, no matter the actual orders. This ensures order low latency fulfillment for early adopters in new locales, which leads to customer satisfaction, word-of-mouth advertisement and soon enough full marketplace formation (and lock-in).

If you were trying to compete with Uber in New York City, the main problem you would have is that you'd need a lot of capital to have hundreds/thousands of drivers to ensure order fulfillment on average under 5 minutes by having a driver as close as possible to any new order being placed.

Convincing people (using money) to stay idle despite lack of initial order demand (until the marketplace is formed) takes more than $5 per driver.

[joshe]

It's a very local market though isn't it? You just have to be better (cheaper, faster, nicer) than them in your city to win that city. People don't even really travel that much, and when they do, and the guidebook said "use Careem in the middle east", well then they would.

[goobynight]

I'm not that guy and don't have the credentials, but none of rideshare or food delivery apps pay out $5 for a referral. If they could, they would. In the earliest days, there were even 4 digit incentives for getting into driving for Uber.

People aren't desperate enough to hustle for $5. Even $200 is low. I'd consider that the minimum to even have a program worth running.

[clairity]

i worked with a number of on-demand companies (ridehailing, delivery, home services, etc.) helping them fill their supply-side funnels. as others have pointed out, it doesn't take much exposure or expertise to realize that the supply side of a marketplace can be expensive. of course retention also highly influences the cost.

[robszumski]

This page [1] was the first search result and contains many mentions of hundreds of dollars. It easily costs them millions of dollars in each market they enter.

[1] https://ridesharecentral.com/uber-sign-up-bonus