> Either one of them failing would guarantee a monopoly for the other
Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?
Why? Is there some reason someone else couldn't make a basic app-based service to get taxi rides?
Uber's big competitors, on the global front, aren't really competitors. Uber, Grab and Didi all own each other, and Masayoshi Son has massive stakes in all 3, it's an oligarchy. The global rideshare companies aim to bring accountability and logistics supremacy to ad hoc and inefficient transportation networks all over the developing world.
I expect profit margins will forever be slim, but if it's a safe bet that rideshare is here to stay, then I believe over the long run Uber is a safe bet. I won't be investing in Uber myself because I have morals.
Much like, I am arguing, the market for taxi hailing will continue to be.
The alternatives I’ve tried in Canada succumb to failing miserably to even get the app experience right. There’s an extra level of competency needed to get an alternative to be considered competition.
Either they have huge margins or they don’t. If they do have large margins someone will come along and attack the most profitable segment of the business. That could be airport rides, or having extra cars outside the end of a sporting event, or whatever.
As long as switching costs for customers are low then they can’t defend high margins. For monopoly to work you either have to corner supply somehow or lock the customers in. There’s no plausible mechanism for either with taxi services.
At their current scale uber and lyft don't need to have huge margins, they just need to break even and can make up for it with volume. Like amazon they could undercut any new competitor and play the long game. Their marginal costs are so low that they could win out any city with competition by aggressively cutting their 25% of the fare.
No, they don't. They could just hang out outside of big crowded events, like the end of a stadium concert, or rush hour at the airport. Or whatever the peak crunch point is for the existing service. It would be trivial to make at least some money doing only that.
Then the existing service sees its margins eroded. And so on.
There's just a ton of handwaving here, but there's no mechanism for a monopoly. Burden of proof would be on your side to demonstrate it. It's absolutely trivial for customers to switch, there's no way to lock them in. At least some people would do it literally to save $10 on a single ride to the airport. And you don't need a fleet to take one person to the airport. Or a couple. Or to strike a deal with one large company, or airline, or whatever.
Acquiring a monopoly is pointless if you can't defend it. And you can't unless you can constrict supply or lock in demand. Uber and Lyft can't and aren't ever going to be able to.
Driver acquisition isn't cheap.
Then there's the question of which city you start in. The mega corp could probably just cut prices in that city until you give up.