The original plan was to start out with human drivers while developing the technology for self-driving vehicles. This was a solid plan because owning self-driving tech is a good moat.
However it’s clear by now that Uber won’t be anywhere near the first to bring self-driving tech to market.
Ridesharing itself has only weak network effects because drivers are interchangeable and can easily switch apps. All Uber have in this case is their brand, which is more toxic than a Machineel tree.
If self-driving does eventually pan out then they are also in a bad way because whoever develops that tech will likely directly compete with Uber, at lower margins.
Because the taxi business is a commodity. The returns are ~2%.
Uber doesn't have any geographic or other advantages. "Self driving" is a nonsense claim that doesn't stack up because it's not going to be available for at least another 5+ years. Even when it does happen, Uber doesn't have the capital to establish the necessary fleets of vehicles and is currently "outsourcing" that to the owner/drivers.
There have been any number of articles about Uber's lack of a sustainable business model.
Uber does have the advantage of operating globally and having a single app that will get you a taxi almost anywhere in the world. Given that traditional taxi companies often only operate in a single town or city that's quite an advantage. They would easily have a sustainable business if they dramatically cut their costs. Whether they can do that having taken the amount of VC money they have is another question.
I'd assume a decent chunk. I don't generally use a taxi in my home country, but used Uber a few times when traveling. That being said, I have 0 issue downloading a local taxi app and deleting it afterwards.
They're bleeding money and have no path to profitability. They have no competitive advantage over the various local competitors, so the moment they increase prices ( their only chance of increasing revenues enough) consumers will shift and use Bolt/Lyft/Freenow/Deliveroo/Glovo/whatever.
This can be seen in markets like Ireland, Germany, where Uber are prohibited from using their ride sharing model so are only fielding out to taxis. Free Now is already dominant in those markets as they got established while Uber was still fighting it out with legislators to go for their unlicensed model and Uber has nothing compelling to offer when it can't undercut by pushing the costs to their staff.
However it’s clear by now that Uber won’t be anywhere near the first to bring self-driving tech to market.
Ridesharing itself has only weak network effects because drivers are interchangeable and can easily switch apps. All Uber have in this case is their brand, which is more toxic than a Machineel tree.
If self-driving does eventually pan out then they are also in a bad way because whoever develops that tech will likely directly compete with Uber, at lower margins.