[bobthepanda]

1. The regulations that Uber skirted around and then loosened up to provide more drivers can also be used by other companies. The gates are open, but not only to Uber.

2. Drivers and customers are fickle. My market used to be mostly Uber and is now mostly Lyft because all the drivers hate Uber. When Uber and Lyft run out of cash to blow on subsidies, they don't really have much of a selling point.

The problem with Uber's business model is that the main cost is the driver, who is not going to go anywhere anytime soon. It's no Amazon, where they have efficiencies of scale in logistics, datacenters, etc.; you don't get economies of scale by being bigger in the taxi business. It seems more like Moviepass.

[repolfx]

Are you sure there are no economies of scale?

Everyone I know uses Uber exclusively for taxis now and it's partly because whenever they travel Uber works great, but using local taxis is a pain. The "taxis are local" argument is right some of the time but many people use taxis primarily when travelling, and that's a market that really only Uber and Lyft can automate with any degree of success. I don't want 50 half-baked taxi apps on my phone.

[bobthepanda]

That‘s not what an economy of scale is, that‘s branding. An economy of scale would be Uber saving a portion pf costs as it gets bigger, but that‘s not really possible because the per unit cost of a ride is tied to a driver, and they‘re not pushing drivers into driving buses or other vehicles that can carry more shared trips.

You could achieve the same thing Uber achieved with branding with a franchise; McDonalds maintains quality across franchises despite not being involved in the day to day operation. And McDonald‘s certainly doesn‘t lose money on every patty sold.

[jsloss]

All great points. I guess we'll see where the chips land.