Author Topic: Uber/Lyft have defective business model?  (Read 5947 times)

rkbabang

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Re: Uber/Lyft have defective business model?
« Reply #20 on: March 06, 2018, 11:10:38 AM »

I am also going to guess that a fully autonomous car is going to cost at a MINIMUM $50k.  What if these cars cost $75k or $100k?  They are going to buy a very expensive piece of machinery to capture $8/hour in profit (maybe?).


Autonomous cars will kill Uber/Lyft.

Why wouldn't I take out a loan, have the car drive itself for the 22 hrs/day when I don't use it myself, and capture that $ myself?

And how are people going to find and call your personal car to them if not through the Uber or Lyft app?


LC

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Re: Uber/Lyft have defective business model?
« Reply #21 on: March 06, 2018, 11:12:16 AM »
They could just hail it down with a sharp whistle like in the good ole days   :-X
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Pelagic

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Re: Uber/Lyft have defective business model?
« Reply #22 on: March 06, 2018, 11:18:21 AM »

I am also going to guess that a fully autonomous car is going to cost at a MINIMUM $50k.  What if these cars cost $75k or $100k?  They are going to buy a very expensive piece of machinery to capture $8/hour in profit (maybe?).


Autonomous cars will kill Uber/Lyft.

Why wouldn't I take out a loan, have the car drive itself for the 22 hrs/day when I don't use it myself, and capture that $ myself?

And how are people going to find and call your personal car to them if not through the Uber or Lyft app?

That's Uber v3.0 after they figure out owning and maintaining a massive fleet of AVs is an expensive, low margin proposition. Uber 3.0 will connect your car with customers where their platform just acts as a middleman. Like the current version but without the drivers demanding better wages. WSJ headline circa 2032 - "MIT Study Reveals Autonomous Vehicles are Working Well Below Minimum Wage"

Jurgis

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Re: Uber/Lyft have defective business model?
« Reply #23 on: March 06, 2018, 11:28:08 AM »
Here is the information you are looking for:

https://www.wsj.com/graphics/uber-financials/

Of $11bn revenue $7.5bn goes to drivers and their cars.  It's an enormous opportunity for both revenue growth and cost optimization.

Self driving cars will cost less than a typical vehicle today and will be much better utilized.

But what is Uberís edge running a large fleet of cars exactly?

I would guess scheduling and routing algorithms are not trivial. Is that enough of a moat, I don't really know.  8)
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Jurgis

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Re: Uber/Lyft have defective business model?
« Reply #24 on: March 06, 2018, 11:38:11 AM »

I am also going to guess that a fully autonomous car is going to cost at a MINIMUM $50k.  What if these cars cost $75k or $100k?  They are going to buy a very expensive piece of machinery to capture $8/hour in profit (maybe?).


Autonomous cars will kill Uber/Lyft.

Why wouldn't I take out a loan, have the car drive itself for the 22 hrs/day when I don't use it myself, and capture that $ myself?

A company that owns a fleet and optimizes routing/scheduling will kill your one car operation. Although you could try to limit your car to profitable airport routes... but then everyone else will try this too. And if company optimizes to predict good locations for its cars, your car will always lose the pickups.

Also, people will order through some portal, so you'll have to pay for your car to be included in one. So perhaps portal with no car fleet will win. Who knows.
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Cigarbutt

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Re: Uber/Lyft have defective business model?
« Reply #25 on: March 06, 2018, 11:52:05 AM »
"I would guess scheduling and routing algorithms are not trivial. Is that enough of a moat, I don't really know."
"Also, people will order through some portal, so you'll have to pay for your car to be included in one. So perhaps portal with no car fleet will win. Who knows."

Reflecting on the airline industry, over time, profitability (cyclical) has often been linked to superior "scheduling and routing algorithms". As road transportation becomes more commoditized, it is hard to imagine that the coordination activity will be separated from the fleets of vehicles.

Who knows who will win long term, but I wonder if the moat won't be passed on to the end-consumer in correlation to what I imagine to be continued deregulation and free markets.

Then again, the airline industry has been referred to before as a death trap, in terms of investment returns, only now to be considered a reasonable investment since it is felt that the industry will show more than ususal capital and operational discipline (?).


Jurgis

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Re: Uber/Lyft have defective business model?
« Reply #26 on: March 06, 2018, 12:01:11 PM »
Then again, the airline industry has been referred to before as a death trap, in terms of investment returns

I would not invest in Uber/Lyft even though I posited that they might have some kind of moatiness. There's definitely a number of outcomes some of which are pretty disastrous for Uber/Lyft.
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StevieV

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Re: Uber/Lyft have defective business model?
« Reply #27 on: March 06, 2018, 12:10:07 PM »
I think thatís a fallacy. Having a huge fleet of cars is going to be expensive to set and expensive to mantain - Itís today and it will always be. Having a real and huge network of cars/drivers on demand an the digital ecosystem supporting that network is the most valuable thing here.

As mentioned in my post, I think car companies themselves and rental car companies are natural competitors.  Car manufacturers should have some advantage by making the cars and rental car companies do maintain a large fleet of cars.
 Uber/Lyft don't maintain any fleet of cars today.


Just as anybody can replicate the ITunesí model (but in reality is not just that easy!), anybody would be able to replicate Uberís model but itís not going to be that easy!

I don't think Uber's current model is easy to replicate, but I think the AV one will be easier.  At least because the two-sided network mentioned above, will become one sided.

-------------------------------
In any event, I don't think the margins will be there.  As I understand it, right now, Uber loses a ton of money, and that is without a very good deal for drivers.

I think the question/proposition above was that the company or investors or someone says that they can make money with a shift to AV.  So, AV has to be not be better than the human driver model.  It may be better from a customer standpoint, but I think it will be easier to replicate and, so, a tougher business for Uber.

Could be wrong for a lot of reasons.  Uber could be under-earning during its growth phase and it could be profitable today.  Perhaps they will have a subscription model that will reach such scale that it will be difficult to compete.  Perhaps other competitors won't enter the market.  Lots of other things I could be missing.

But, if I had to guess, I'll stick with my original answer.

rkbabang

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Re: Uber/Lyft have defective business model?
« Reply #28 on: March 06, 2018, 02:36:39 PM »

I am also going to guess that a fully autonomous car is going to cost at a MINIMUM $50k.  What if these cars cost $75k or $100k?  They are going to buy a very expensive piece of machinery to capture $8/hour in profit (maybe?).


Autonomous cars will kill Uber/Lyft.

Why wouldn't I take out a loan, have the car drive itself for the 22 hrs/day when I don't use it myself, and capture that $ myself?

And how are people going to find and call your personal car to them if not through the Uber or Lyft app?

That's Uber v3.0 after they figure out owning and maintaining a massive fleet of AVs is an expensive, low margin proposition. Uber 3.0 will connect your car with customers where their platform just acts as a middleman. Like the current version but without the drivers demanding better wages. WSJ headline circa 2032 - "MIT Study Reveals Autonomous Vehicles are Working Well Below Minimum Wage"

All fine and good until the robots unionize, then weíre screwed.

LC

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Re: Uber/Lyft have defective business model?
« Reply #29 on: March 06, 2018, 05:57:53 PM »

Also, people will order through some portal, so you'll have to pay for your car to be included in one. So perhaps portal with no car fleet will win. Who knows.

Open source network traffic algorithms exist. Google hosts the platform a la google maps. Cheap and easy.
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