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Comment by tomblomfield | Hacker News Reader

People said this about Amazon for 20 years http://www.ibtimes.com/amazon-nearly-20-years-business-it-st...

And for 8 years about Facebook http://www.theinquirer.net/inquirer/news/2219503/facebook-gr...

I wish I'd bought stock in both while they were still losing money.

CapEx. Amazon eschewed profits, instead investing ungodly amounts in building out the infrastructure for a distribution network that no other company can compete with.

Walmart was (and is) tooled up to distribute to its stores. Amazon tooled up to distribute to your house.

That's a competitive advantage, a moat. It's defensible and 20 years later paying huge dividends.

What is Uber investing in that 20 years from now will prove defensible? They're plowing cash in to subsidizing rides and investing in self-driving cars.

Today, Uber has no moat. There's little friction for a driver or a rider to switch to Lyft or another app. Maybe self-driving pays off. Assuming they get the tech working, what's the business model? There is a lot that is unknown. Economic success the likes that Amazon is seeing today is if far from a foregone conclusion for Uber.

CapEx doesn't reduce the earnings for the current year (it gets treated as an expense on subsequent years, though, and you get depreciation charges).

Both of those (Amazon, Facebook), though, built things that weren't a commodity in the end, and highly leveraged a network effect. Such that the barrier to entry for a competitor is just way too high.

There's nothing about Uber's app or self-driving car approach that suggests an insurmountable barrier to entry. Their global presence is a barrier, but there are players who wouldn't be starting at zero if they wanted to catch up. Either auto manufacturers, global tech firms (Google), or some partnership between the two.

How come Uber's driver-rider network is not a moat in the same sense Facebook's friend network is?

The departure of both Uber and Lyft in Austin, TX seemed to be filled by others pretty quickly. I don't sense any driver loyalty...I believe a large portion of them already drive (at the same time) for both Uber and Lyft, some also for taxi services.

Facebook, on the other hand, if I pack up and go to say, Google+...none of my friends and family are there.

Uber needs to hit its timeline esp. with self-driving car very fast, they are for now branching into eats etc to buy some time. I used to think Uber is a slamdunk, but their humbling in China and India, showed that they need to protect Fortress America very bad and get Self-driving cars on the roads by turn of the decade.

I am more long on AirBnB than Uber.

I don't see how self-driving cars will be legal, let alone cost-effective for Uber by 2020. A cycle in the auto industry is 5-7 years and no amount of pixie dust will change that :)

> get Self-driving cars on the roads by turn of the decade.

It is not the same to create an app than to purchase and maintain a huge number of cars. That is a completely different business model.

Isn't the article about how "sharing economy" is so good. Then why Uber wants to get rid of it so badly?

AirBnB is more focused in its core business. The equivalent for them will be to create Hotels around the world. Hotel industry is a good one, but AirBnb doesn't has the business experience to work on that. And that's why they experiment on that in a less visible more realistic way (http://www.businessinsider.com/airbnb-builds-hotel-japan-com...).

Also I see no reason to give Uber a high chance of being the first to develop level 4 autonomous cars. Google, Tesla and Volvo all seem ahead. And then why should they give the market to Uber rather than run their own taxis? Tesla are already talking about competing.

("Tesla says it will roll out Uber-style ride-hailing program "http://europe.autonews.com/article/20161020/COPY/310209846/t...

"No, you can't use your self-driving Tesla to make money through Uber" http://mashable.com/2016/10/20/tesla-ride-sharing-ban/#6Mklf... )

Neither of those are based on a third party resource of underpaid and upset drivers/renters/city councils.

I have very reserved feelings about both Uber and Airbnb. Any company that makes it their secondary mission to get into fights with as many city governments as possible doesn't have good odds.

Amazon could for over a decade have flipped a switch and started churning out dividends. They made profits and reinvested them into growth.

Uber has been making a loss on each ride and trying to make it up in volume. It's a long-shot bet on self driving cars working out in the next 3 years.

Yes always easy to say after the fact.

Sure, we can point to exceptions after the fact. That doesn't mean every company is going to follow those trajectories. In other words, criticism is still valid.

By the same argument you can predict that everything will fail and be right most of the time. That sort of blanket dismissal is intellectually lazy and therefore uninteresting. Let's try to do better than that here.

> By the same argument you can predict that everything will fail and be right most of the time.

Yes, exactly. It's worth reminding people that for every success there are many unheard of failures.

I find it lazy when people claim "They said that about <example>", as if that's actually a counterpoint (it isn't).

Yep. https://en.wikipedia.org/wiki/Survivorship_bias

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