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Comment by gumby | Hacker News Reader

Really hard to see the defensible "moat" in the business models of these delivery companies. As the article says, Uber uses its balance sheet as its weapon, but the flip side of that is it will be hard for any new investor to get much of a return in any future round -- its hard to see its defence against a disrupting competitor. Even Lyft, which looks weaker, easily scoops up the same drivers as Uber.

All of which means it's not clear if this is a difficult fundraising market or not. It certainly is for these undifferentiated delivery companies, but for tech startups? Not seeing it yet.

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> Really hard to see the defensible "moat" in the business models of these delivery companies.

Couldn't the same be said about a lot of the "unicorns"? For example Dropbox or AirB'n'B don't have significant network effects and anyone with some cash can copy their software and directly compete with them (the same way Lyft is competing with Uber). The likes of Facebook and Twitter are an exception.

Dropbox has a mild network effect, as soon as people use it to share files with their friends and colleagues. Once Dropbox gets established inside a business (often because it's easier to use than internal IT), they're probably quite secure.

I'd say quite mild, since if Dropbox prevented me from sharing files to anyone over the web, half its utility is gone.

That's why they're avoiding the public markets. Their valuations will take a pounding once they're put up for everyone to scrutinize

I would think AirBnB has a pretty big network effect, in the same way as e.g. eBay.

I don't see it, since people could list themselves on competing listing sites just as the same drivers list themselves on both Uber and Lyft.

Then again you could say the same for eBay, yet Amazon couldn't get a competitor off the ground. One small moat (eBay has vs Airbnb model) is that you can automate the sale on eBay (so you'd have a hard time listing the same item on two sites -- you might sell it twice) while Airbnb still has manual intervention.

The difference is that all these food delivery companies need to acquire both customers and drivers. Uber already has the drivers and the infrastructure for delivery. That makes it much easier for Uber to compete against companies like Postmates. I honestly don't think Postmates, Caviar, et al. have much of a chance over the long haul.

Actually, they need to hire customers, drivers AND partner restaurants. Makes it quite difficult having to 'manage' three individual parties.

Sorry, I didn't mean to imply Uber as a competitor to Postmates-etc/DoorDash-etc/dry-cleaning-delivery etc. I just meant Uber as also being in a class which has only moderate barriers to entry. I agree with you that these delivery companies have little competitive advantage or particularly good business models.

I don't really see what advantage Uber has over Lyft, Didi etc except the balance sheet and using it in the hope of doing the largest, fastest land grab possible. To draw a tenuous analogy, it's hard to say that the 17th-19th century European land grabs worked out that well in the long term.

I think the thing to watch for Uber et al is Austin. If a good local alternative is created that is content to make $100m/year with no real ambitions of growing, then they will have to continue to fight city by city.

I was in Austin just after Uber and Lyft had left. There was a company called Fasten which had promo codes on seemingly every lamppost in the city. It worked just like Uber, and I believe it pays the drivers better. I don't know if they're still around and still have the market to themselves, but if they do I imagine they could become entrenched there.

I live in Austin and I'd be shocked if all the new ride share companies (Fare, Fasten, GetMe, RideShare Austin, etc) did 100mm a year in revenue combined. I think RideShare Austin has the best chance of sticking around here. They're set up to be a non-profit. So their intent is to follow local regulations carefully and stick around for the long haul. We'll see what happens.

fyi uber's revenue was leaked in 2014 and it generated $18m in sf in whatever month got out

http://www.businessinsider.com/uber-revenue-rides-drivers-an...

That's a $212m run rate; with moderate growth a $350m+ run rate seems entirely reasonable. sf is about the size of Austin. If Uber keeps 25%, that's an $87.5m business. Some extra growth on top of that (run a local delivery service; do some transit deals for elderly/kids/handicapped; etc) and you've built yourself a nice $100m business.

I don't doubt that Uber could do it. I think the current players in the market here cannot.

I misunderstood; thanks for clarifying!

I would be happy to see a worker owned co-op emerge in a city like Austin. It would probably be better for the city and for the drivers.

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