[southerndrift]

Uber is preparing for a future with self-driving cars. If they are the network to rent those cares, they will make back everything and more. The manufacturers and even the self-driving software won't matter. All that matters is being the app that summons the rides.

The network is not as defensible as facebook, but all the other players would have to stick together to dethrone them.

[vkou]

What stops me from getting a billion dollars in investor money, developing an Uber-clone app, buying a bunch of self-driving cars, and renting them out as taxis in the top five metro areas in North America?

The network is not 'not quite as defensible as Facebook'. The network is not defensible at all.

The Uber app adds no unique value to the user. The Uber logo on the cars adds no unique value to the user. If the cars are off-the-shelf self-driving vehicles, then there is no sane reason why anyone would care whether or not they are riding in an Uber, or a Vkouber.

It's not like all the hooballaa about licensed and vetted and non-asshole higher-quality drivers is at all relevant in a self-driving car world. The only thing you'll be competing on is price.

You know which industry operates this way? The airline industry. And do you know what's the easiest way to have a small fortune? Start with a much larger fortune and invest it into an airline.

[southerndrift]

Nothing is stopping you. But will you retain your market if you are not the biggest network? You need deep enough pockets to get 50% of the market or Uber will get its share back once you try to be profitable since they can leverage their scale.

[vkou]

As an airline passenger, do I care whether or not Alaska, or American has the biggest network?

I want to get from point A to point B, as cheaply as possible. If the Alaska flight is the cheapest, I'll take it. If the American flight is the cheapest, I'll take that.

I have no brand loyalty for airlines. I have no brand loyalty for taxi companies. Why should I have brand loyalty for taxi-in-an app?

How can Uber leverage their scale? Are you saying they are going to price-dump to push me out of a regional market? Isn't that illegal, and something that our esteemed President complains about on a regular basis?

I'm not sure 'Become so big, and engage in blatantly anti-consumer monopoly behaviour to the point that you are practically begging to be put on an anti-trust trial' is a great moat to have.

[southerndrift]

The airline argument is quite convincing.

How about the frequency and the fair price? It's worthwhile to compare airline rates. It's more difficult for in-app uber purchases that are more frequent for less money. Will people compare rates? Especially if rates are not cheaper elsewhere? The biggest network will have the best cost structure.

Uber can keep other companies alive by slightly rising their prices. So no monopoly problem but nobody who has the money to innovate. Then they have the money for the most advanced technology and by adjusting their prices they decide how big their market share is.

[vkou]

> How about the frequency and the fair price?

The case looks even worse for Uber, than it does for Alaskan in that case.

The capital costs and logistics of getting more airplanes, more (highly limited!) slots at airport terminals, working this out for point-to-point connections, getting all your staff moving from flight to flight efficiently, are horrific.

The capital costs and logistics of scaling up a self-driving taxi network, in comparison, are peanuts.

> It's more difficult for in-app uber purchases that are more frequent for less money.

It's a simple as checking the ride price in two apps.

> The biggest network will have the best cost structure.

No, the network with the lowest profit margins will have the best cost structure.

Uber will either be a defensible business, or a profitable, but entirely indefensible one.

[southerndrift]

The limit of the airline metaphor is that uber doesn't have to own the fleet. The fight is in subsidizing rides, like with lift. Then comes softbank and they pick the winner because they have the deepest pockets. Who would go up against those pockets but a bigger player? And then, uber can offer them shares and the fight is over and uber keeps on winning.

Regarding the price checkking: it's one thing to compare ride prices if you fly once a month but it is something else if you buy a ride 5 times a day. Like businesses buying flights from one supplier, consumers will buy rides from one app.

Uber will be profitable once nobody is willing to burn more money. That day will come sooner than later.

Uber has thought this through because their name is not lift, but uber.