[philsnow]

Doesn't this, so close to their purported IPO, fly right in the face of what they consider to be their network effect? Why would they need to buy competitors if not because it's expensive for them to compete against local upstarts who own a smaller market?

[DevX101]

Uber's network effect is localized to cities. If Uber attempts to enter a market with a strong local player, the local player stands a decent shot at defending since Uber's global dominance doesn't really transfer over to that particular city.

This is unlike social networks, like WhatsApp, where the network effect is truly global since people often have friends and relatives in distant cities.

[z2]

There's an article I read recently on this very subject. Apart from social networks, it argues that even a platform like Airbnb is much stronger because the network is broad by design, with travelers coming from far away.

https://hbr.org/2019/01/why-some-platforms-thrive-and-others...

[adventured]

Uber's network effect isn't localized at all.

Try getting someone to keep 27 different ride hailing apps on their phone, and convincing that person to maintain them all and remember which accounts correspond to which cities.

Uber only doesn't have a national network effect if you view people like software in appraising their potential behavior. Actual human behavior is thus: I have zero interest in maintaining many ride hailing accounts, I have zero interest in having numerous ride hailing apps on my phone, I want as few as reasonably necessary.

If you can get people to keep two or three ride hailing apps on their phone for one country, that's pushing the limits of consumer behavior. They do not want to bother. They also do not want to be negatively surprised by a new competing service, which limits their willingness to experiment when there are existing known solutions. They'll choose well-understood Uber at 75%-85% good enough rather than risk having a bad experience in regularly trying out a new upstart. Actual consumer behavior functions as an enormous competitive moat in fact.

[govg]

I think it's a very small segment of their customer base that actually requires cab hailing services in 10+ cities. Most people working day jobs will not visit more than that many cities over the course of the year, and Uber possibly serves most of them.