Source? And what do you mean by margins specifically?
> one of the most powerful network effects in business
Disagree. One result of a very strong network effect is that it means higher switching costs for customers/users.
- Rider switching costs are near zero. For example, it's as simple as downloading a new app. If I switch from Facebook to Path (if it was still around), I have to re-establish all of my connections again, which is a massive amount of friction.
- It has one of the frailest controls on its sourcing. Drivers switching costs are near zero (unless of course the drivers are sucked into preferential leasing by the rideshare company).
Ridesharing will become a race to the bottom. Stronger network effects imply margin expansion (see what Facebook did to its gross margin circa 2013-2017).
Source? And what do you mean by margins specifically?
> one of the most powerful network effects in business
Disagree. One result of a very strong network effect is that it means higher switching costs for customers/users.
- Rider switching costs are near zero. For example, it's as simple as downloading a new app. If I switch from Facebook to Path (if it was still around), I have to re-establish all of my connections again, which is a massive amount of friction.
- It has one of the frailest controls on its sourcing. Drivers switching costs are near zero (unless of course the drivers are sucked into preferential leasing by the rideshare company).
Ridesharing will become a race to the bottom. Stronger network effects imply margin expansion (see what Facebook did to its gross margin circa 2013-2017).