After seeing a lot of negative press on Uber and its questionable tactics, I'm wondering the following:
Is it necessary for Uber to be so cutthroat, sneaky, and brutal to survive in the space they've carved out for themselves, or is this just a reflection of the poor character of the management team?
Here's how things will go. Über will continue steamrolling the country and locking down the market and subduing drivers into subjugation, then they will start regulatory and policy capture by corrupting politicians to write rules that keep them in power with as little effort as possible.
The reason Über is trying to crush competition, is that it knows they are currently still vulnerable for real competition to enter. Once they have dominated all the major metropolitan centers, they will know that they dominate to a point that significantly disincentivizes entry by real competition.
I don't think this is true. I think that the ridesharing market will become split between many interchangeable ride-sharing services. Three main reasons: (1) the barriers to entry for this market are actually very low, (2) it's hard for even a dominant company to differentiate itself from the competition, and (3) it is easy for both drivers and consumers to use all ridesharing services, to optimize pricing and wait times.
> the barriers to entry for this market are actually very low
How so? First you have to line up enough drivers to make it worthwhile, and then get enough app downloads by consumers to make it worthwhile for drivers.
Both groups will inquire about your differentiating factor, and to sign up on either side you would have to promise higher payouts to the drivers or lower prices for consumers, both at expense of your margins, which limits the scale of your deployment.
> First you have to line up enough drivers to make it worthwhile, and then get enough app downloads by consumers to make it worthwhile for drivers.
You're assuming that drivers/consumers will be exclusively using your service.
Few drivers are going to drive exclusively for your service. The assumption is that your drivers will already be driving for Uber, Lyft, etc. and will sign up with your service just in order to marginally raise their expected number of rides per hour (hoping that your service might get them a ride when business is slow on Uber, etc.).
Similarly, few consumers are loyal to exclusively one service. They don't care about the difference between Uber and Lyft, they care about getting a cheap ride, quickly. They'll try Uber for a ride. Maybe Uber will be surge-priced. They'll try Lyft, which might not have any drivers on the road. They'll try your service.
I'd say that, while this almost sounds like a reasonable argument to put forward, it isn't probably going to work that way.
Case in point: Gett in NYC. They are running a $10 flat fare anywhere in Manhattan, and promising drivers double pay for three months already. That should undercut incumbents as well as cause drivers to flee, right? Why is Uber and Lyft totally winning NYC while Gett is not even operating at 1/10th the scale?
I think it's got to do with liquidity and reliability. Even if the driver has 10 apps running, the probability that the driver gets the first/most ping from the app with the best client liquidity is extremely high. As long as he's constantly engaged, there is no need for him to open another app. On the flip side, when you're small, your supply runs out quick. If clients opening the app constantly see that, they'll eventually not open your app and go to one with the most supply liquidity. There are strong network advantages in this game. Your paper mostly discounts that.
Right, I'm not saying that acquiring both is impossible, I'm just saying it's not free - someone has to recruit drivers, hopefully in more than one city, someone has then to recruit their first thousand of consumers, make them aware of the app, possibly expand by introducing a referral program and giving away the first ride (seems to be the incumbents' preferred technique, so it probably works).
Which tends to involve human costs, so for anything of scale this is not a low-barrier business to enter.
You can probably start a regional competitor fairly cheaply though, as examples of GrabTaxi, Gett or Yandex.Taxi show.
Not free: okay, sure. But the barriers aren't that high. Let's take a look at the capital expenses: setting up some re-targeted advertisements isn't very expensive at all, and giving away a thousand rides at an average ride-cost of, let's say, $25, is only a $25k expenditure.
To recruit drivers (maybe in more than one city) might be a little expensive, just in terms of a time cost. If you're paying recruiters, that might cost a month or two of salary for every city you're launching in. Alternatively, some of these employees might just take an equity share in your startup.
The last big part is the design of an app: this could take a handful of competent engineers perhaps one or two months. This might be your biggest expenditure (a team of 10 might cost you $100k/month), but it might also be possible to pay them (partially) with equity.
I would wager that you could start up a competitor regionally (or perhaps even in a small number of cities) for less than $1M, which is a modest amount in the current tech. climate (specifically w/r/t/ venture capital). Especially considering the potential returns, it seems likely that some entrepreneurs will go for this.
And concerning regional competitors: yes, certainly. And it only takes a couple of competitors in every major city to make it very difficult for Uber to hold on to a monopoly or majority market share... :-)
In a nutshell, constant confrontation with politicians, taxi medallion owners, its own drivers, and competitors make this a fairly cut-throat industry. Uber took up this battle. Would a nicer, gentler company succeed in this space? Hard to say, so far the data says no.
Lyft is that nicer, gentler company. That's their differentiator: "We're like Uber, but friendlier." Whether that can succeed in the marketplace will depend upon consumers like cutthroat & efficient over friendly & quirky. So far most of my friends prefer Uber, but then again, we're evil techies who are taking over SF with our laptops.
Lyft is US-only so far, so they haven't had a chance to run into European regulators, airport operators and cabbies. They also haven't entered combatant US markets like Las Vegas.
I try to distribute my spending equally, since a dominating player would be quick to raise the prices on consumers, but it's certainly hard to spend more money on Lyft unless you happen to live within one of their coverage markets and don't travel much.
Interesting, I was just in the USA and caught up with people my partner knows in SF (none techies mind you). All of them told me uber was old news, service was not as good, coverage not as good as Lyft.
I have no idea if it's true while over there but enough of them said it that I stopped using Uber while I was in SF and only used Lyft, and managed to convert my partner's parents to using Lyft as well.
Well I think for starters they haven't carved out a space for themselves. They were the first to a new space made possibly by recent advances in technology, but that's it. Furthermore as technology continues to march forward it's only going to become easier and easier for competitors to enter the same space.
So from that perspective yeah, yeah I guess they do have to be cut throat to survive. The service they provide is not far off from being commoditized. It's easy and cheap for competitors to step in and drive prices down. Will be very, very hard for Uber to secure their space. Honestly the only thing that will make it possible is the same time of legal protection that taxi companies have had.
> [I]t's only going to become easier and easier for competitors to enter the same space.
Not going to happen. Those "regulators" they decry so loudly? I'm sure they have plans to buy a few once they get big enough and use them to put barriers in place to put a stop to any competitors. Combine that with their size (and thus their ability to undercut any new competition), and I don't see anything but an Uber monopoly on the way.
They can also protect it through scale, since more drivers and users on the platform means better liquidity in the rider driver market, and a more pleasant seamless experience compared to a newcomer.
What's absurd about it? Being hired to oversee Uber's overseas markets, it's hard to see what personal incentive he would have had to take all that data with him.
It's even harder to see what incentive Uber would have to ask him to spy on his employer? Besides, I get the impression Uber is beating the pants off Lyft. What do they want from them?
Who knows why he did it. Maybe he had anxiety about getting rid of things. But it's worth mentioning that Lyft did not name Uber in the lawsuit, which they would certainly do if they had any belief Uber instigated it.
To beat them in the market of course - the same incentive as in any other case of industrial espionage, if such it turns out to be. Most businesses would like to know what their competitors are up to. You're assuming that Uber is beating the pants off Lyft through merit, and concluding from that that Uber has nothing to gain.
Who knows why he did it. Maybe he had anxiety about getting rid of things.
Spreadsheet nostalgia!? Defending against this litigation is likely to be very expensive and his personal reputation has taken a severe hit regardless of outcome. That's some weapons-grade OCD you're suggesting.
Lyft hasn't named Uber but has left open the possibility of naming additional defendants. They do mention VanderZanden's admission to a Lyft board member back in August that he was in talks with Uber (before the termination of his employment), so you can bet they'll be wanting to look at any emails he might have exchanged with Uber. It's very common for legal complaints to be amended following the discovery process.
Are you a conspiracy theorist generally or just when it comes to Uber?
Having anxiety about letting things go has nothing to do with a sense of nostalgia. It's about the power of feeling like you have access and information, about the anxiety of losing something from years of your email that you might someday want or need, about a sense of entitlement that if you write it, it's yours to keep. I'm just speculating, but I could go on and nowhere on my list is "nostalgia". I think it wouldn't be on your list either; maybe you just wanted to score a debate point with a false equivalency?
I'm not one for online debates so please, have the last word. But so far all I've seen is you making a baseless accusation. And yes, it is absurd. Tell me, at what point in the Uber interview process does the coercion and fraud happen? How exactly do you think it went down? And why do you think it's more likely that this was a conspiracy, instead of just a guy who liked having access to things and felt entitled?
I don't get any new information about Uber from this, but it's interesting to see Lyft pursue it. It's also interesting to see what appears to be several of the top people from Lyft choose to go over to Uber. This doesn't look good for Lyft.
Is it necessary for Uber to be so cutthroat, sneaky, and brutal to survive in the space they've carved out for themselves, or is this just a reflection of the poor character of the management team?