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Comment by austenallred | Hacker News Reader

San Francisco just granted two companies a monopoly when previously there were multiple companies fighting for the same business. That’s the exact opposite of what you’re advocating.

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This is a time-limited pilot program that also caps the number of scooters. It's far from a market monopoly.

In addition, there's no network effect with scooters. Car sharing has the chicken-and-egg problem where you need enough drivers to meet demand, and you need enough passengers to give drivers a reason to drive for you. But scooters are cheap and easy to dump a whole bunch on a city, so there's no reason why a new company can't move in on an existing scooter market. For the most part the only important pieces are the brand recognition of the company and how easy their app is to use. If Uber is serious about scooters, I fully expect them to just move back in when the pilot program is over and immediately pick up a sizeable chunk of the market.

I disagree. There is a network effect here, people will use the brand that already is installed on their phone PLUS the one that has the most scooters. This is what can occur here.

If someone wanted to sell a new app, they have to get people to recognize their brand and install their app no matter what.

Ride sharing companies then also have to reach a critical mass where drivers and riders can match in a reasonable time. I think overcoming that is the network effect.

"Overcoming entering into a new market" is categorically different from "Overcoming a mandatory 6 month freeze on your ability to compete while your competitor gets first dibs."

Using the app already on your phone isn't a network effect. A network effect is when the more users there are, the more valuable the network is to each new user. For ridesharing, the more drivers there are, the more useful the service is to passengers, and the more passengers there are the more attractive the service is to drivers. But for scooters? Whether a given scooter brand is popular or is unknown has no bearing whatsoever on its utility to a new user, all that really matters is whether the scooters are available when and where the user wants them, and whether the app is easy to use.

There is definitely a density effect with scooters although. And seeing the past behaviors of governments, 'temporary' things often become permanent limits.

Well maybe those companies shouldn’t have been huge assholes the way that Uber was. The city is once bitten and twice shy with Uber.

What did Bird or Lime do?

They created conditions for a massive degradation of the public sidewalk especially for wheelchair users. They did nothing to fix it. Regulators act slowly and rarely, but when they do they always overreact. Entirely predictable.

VCs would not be giving billion $ valuations if they thought this will be a highly competitive market with many players. Everyone is betting on a winner takes most market.

Scooters are cheap enough and slow enough that the benefits to scale

- aren't hard to reach for anyone with funding, and

- can be maintained over relatively small geographic areas (neighbourhoods/cities, not states/countries/globally).

If some new company invents a scooter with better tires or a better battery or a disco ball and a stereo it's not hard for them to enter the market. And, in fact, this regulation is happening because the city thinks it's too easy for upstarts to get a toe-hold and cause negative externalities like sidewalk crowding.

(Besides these points: Has anyone made the argument that "overwhelming, unapproachable network-effect leads" are kinda great outcomes for consumers? Like, assume there were 10 facebooks instead of one -- kinda terrible. Or if there were a hundred Ubers and Lyfts, and you didn't know which one had cars close to you... awful.)

I’ve noticed that a lot of “natural” monopolies are regulated under the assumption they will become monopolies but before they actually do.

I suspect a lot of that regulation has been wrong, monopolies would not have emerged, and we would be better off regulating only the monopolies that actually exist.

I’d rather see the scooter companies fight it out than have the city government pick winners and losers when the industry is only a few months old and multiple viable competitors already exist.

That's certainly the conventional wisdom, but there's very little in the way of evidence that this is anything other than a cheap commodity.

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