The only advantage of going international is just to be bigger
This is not the only advantage. Another is being able to serve international travelers. You can step off a plane in another country and keep using Uber. These users may be relatively few in numbers but they have an outsized influence.
Yeah. It’s note-worthy that as foreigner, I can’t use Lyft at all currently, even when I’m in the states, as none of their payment methods work: they don’t accept credit cards outside the US/canada, they don’t accept Google Wallet if your account is non-US and their PayPal payment option just said “Server error”.
That's exactly why I initially joined Uber: I was overseas, and if I'm travelling I don't have to learn how the local taxi system works, I just continue using Uber. It's a bit like McDonalds, it's similar enough in every country that you can rely on it and you know what you'll get. I use Uber a fair bit at home, but my heaviest use of Uber is when I'm travelling to other cities & countries.
In several countries it is legal for Cabs to individually define their rates.
Then they prey on tourists who didnt get that the rate was bumped up by 10x.
Hard to watch out for in certain areas if you dont know the local currency that well (esp if the 10x shift looks like they show cents values) and often they group up to make places look like legit normal cab waiting spots.
Completely normal and legal in eg Rumania and Bulgaria. Stuff you know, learn, have to watch out for but is still highly annoying.
I can relate when someone doesnt want to hazzle with this adventure on eg business trips.
I can relate to that. Buuuut, it's also pretty easy to look up "about how much does it cost to go a mile/kilometer" beforehand, and map the distance to your hotel. Then, when you're hiring a cab, you just give them a price within 10-20% of that. If they try to overcharge you, onto the next one.
Americans don't like haggling, but it's actually pretty fun once you get into it.
Again, local flavor. But I also get that some people want to go eat at McDonald's whatever country they end up in, so to each their own. (I'd just personally regret it if I visited some foreign country and only had stories about US-based fast food chains...)
It's actually pretty easy to avoid being ripped off. You just have to know about how much something ought to cost, and offer that as your price. You also have to be brave about offering $5 for something if someone tries to sell it to you for $100.
Yeah, so? You're travelling in a foreign country. I get that some people want McDonald's wherever they go, and some people stay at Disney resorts, but again, show a little grit, I say.
Oh, don't get me wrong - when I'm in Germany I love using the U-Bahn everywhere, it is magical and it's great to experience a place more like the locals do. But sometimes when you need to be somewhere on time, and don't have time to familarise yourself with the local U-Bahn line changes & construction closures, that's where a familiar global system like Uber is ideal.
I'm having trouble imagining a scenario where you've just gotten off the plane, you have to be at a meeting right away, and an Uber driver will get you there faster than a local taxi. I mean, the people you're meeting would probably be understanding if you were a few minutes late, just because air travel/customs/immigration is so prone to delays outside anyone's control anyway.
Again, I get that some people just want a uniform experience. Just not for me.
Well should you find yourself in Birmingham UK you will be using the local taxi system - the Uber cars are also licenced private hire vehicles. You will see two stickers on the car. Best of luck.
Anecdotally, I installed Uber while visiting Mexico city from San Francisco. I have been using Uber in San Francisco since, and before the visit I was only using Lyft here.
Another advantage: Uber is robust to changes in country-specific conditions such as legislation and disruption by ordinary taxi drivers. If Uber is made illegal in one country, it can still exist a business in other countries.
Funnily enough, my experience with Lyft has dropped significantly over the last year.
In the last few months alone, I had an where the Lyft driver who was supposed to pick me up at SFO didn't know where I was despite following the instruction that Lyft texted me. And even after I explicitly told him where I was he just did not understand. Meanwhile everyone else who was waiting for a ride got picked up by Uber without much of a hitch.
On that same trip in SF, I requested a ride while downtown, only for the person not to show up at all.
It's a real shame because barely more than two years ago, Lyft was my preferred choice since the drivers seemed quite friendly and it was that quirky kid on the block. Now that they've toned back their branding and character, it's really no different than Uber. Except sadly, my experience with Uber has been more consistent than Lyft.
I had a no pickup with Uber recently, despite the car circling around our spot at a metro park and ride for five minutes. We messaged the driver to try to help, but he simply didn't respond. Because he waited to cancel, we were initially charged $5 for the driver's inability to find us. Uber ultimately reversed the charge, so that's the silver lining, but it was annoying to have wasted about 20 minutes of our time and then assume we wanted to pay $5 for the privilege.
I've also had great service with Uber too. I'd like to see each each company publish their missed connections numbers, see the data on which has more confused no shows.
I recently flew from NYC to Seattle. When I arrived in Seattle, I wanted to use Uber to reach my destination. However, the driver it booked for me was still in NYC. We talked for twenty minutes until I just asked him where he was at, and he replied "La Guardia".
Uber is dealing with regulatory fights in almost every country it operates in. May as well let them spend all their time and money establishing the playing field before joining in. Lyft is after all only a few minute download away so getting people to switch isn't going to be as difficult as it could. Especially with Uber's appalling business practices continuing to make headlines.
How can you entirely discount marketplace dynamics? If Uber has all of the drivers signed up then the users try switching to Lyft but no drivers are available then they will go right back to Uber. Uber has raised billions and are seemingly making a lot of money so they can easily afford to fight legal battles around the world.
That's the biggest long term problem, uber can't create platform monopoly without hiring drivers or illegal employment practices. They can still thrive, but it will be monopolistic competitive market where they have to rely on branding/reputation and less concrete platform lockin effects.
They pretty much have to allow the drivers to drive for competing networks, or qualify "partner" as an employee. So Uber marketing budget in some ways helps Lyft, Sidecar and Wingz.
Yeah but by establishing the playing field Uber can become dominant in the rest of the world. Taxi apps are subject to network effects so it's going to be very difficult for Lyft to supplant Uber in markets where they are dominant (e.g. the UK).
Unfortunately for Lyft, it's a winner-takes-all market: “First prize is a Cadillac Eldorado. Second prize is a set of steak knives.”
At this point, with over $1 billion invested, the most viable opportunity left for Lyft investors is to pressure Uber or someone else into acquiring Lyft.
I've heard this multiple times with no real evidence to back it up. Why? Why is it winner-takes-all?
Natural barriers to entry? Nope, all you need is a half-way decent mobile app and some people with cars. Yes, the bigger your fleet the larger an area you can cover, but there's no need to serve an entire metropolitan area if covering just some of it is enough to turn a profit. (For example, if I were going to enter the ride-for-hire market in NYC today, I'd put all my drivers at JFK, Laguardia, and Times Square.)
Artificial barriers to entry? There used to be, in the form of TLC monopolies and regulations around medallions. The nice thing about Uber's success, though, is that they're bearing the brunt of breaking down these barriers, leaving the path open for those that will follow.
Network effects? Mmm...some, but only for those that travel frequently. That is, if you often find yourself in a new city, your first act might be to open the Uber app because you can count on them providing service in a new, unfamiliar local. I'd wager that's the minority of ride-for-hire customers, though. Each city has its own local mass transit, and there hasn't been a push to standardize across regions. (Though wouldn't it be nice if your Metro Card worked on BART?)
On the flip-side, I see a lot of opportunity for new competitors to differentiate themselves. For example, let's say you decide to focus on the "regular customer": someone who travels roughly the same route most days of the week, a commuter or someone with a daily or semi-weekly appointment to keep. Imagine you could tune your service to get the same driver for these customers most days. Now you have a familiar face picking you up, who knows where you're going, what route you prefer, what station you like on the radio, etc. If I was that customer, I'd take that service over Uber in a heart-beat.
I've also been asking exactly why it's a 'winner take all market' and have yet to receive a definitive answer. I'd like there to be a #2 even #3. Although I think Uber might be akin to Google in terms of market share, sitting at mid to high 60%.
The barriers to entry are so high that it's nearly impossible for new entrants. The advantage of liquidity in both drivers and riders is very large. You underestimate this drastically.
What does liquidity mean in terms of drivers and riders? I'm familiar with liquid vs illiquid assets, but how does that relate to something like customers or staff?
If a competitor enters the market and offers a better deal for drivers and/or customers, it would be trivial for them to switch, no? There's no lock in beyond a free mobile app download, a username/password combo, and a CC on file.
I think the only way that supply could present a barrier to entry is if you assume that for-hire rides are a commodity and price is the only consideration. It seems obvious to me that this is not the case.
Liquidity is the number of drivers available and passengers requesting a ride. More drivers mean shorter wait times, more passengers means more work for drivers. If an Uber is 5 minutes way and a Lyft is 10 minutes away, I go with Uber. If Uber gets me 3 rides/hour and Lyft gets me 2, I drive with Uber.
...but seriously, on what are you basing the power-law distribution claim? And what exactly does "success" mean anyway? Market share? Revenue? Profitability? I know a number of small, yet very profitable software companies.
Wha? The context is a guy using dubious (and increasingly dishonest) tactics to motivate a sales team, not a realistic scenario that illustrates the essential dynamics of winner-take-all markets.
How does the context add to the GP's point? I don't think they were saying the dynamics here are the same as in GGR.
While the market does have strong network effects, it appears that Lyft can gain a sufficient presence in an area to compete effectively with Uber. If it continues to differentiate the experience, I think it can survive as a strong, much smaller #2 (as you apparently might agree with the Glengarry quote).
> Unfortunately for Lyft, it's a winner-takes-all market
That does not seem to work out worldwide. GetTaxi and Yandex.Taxi are still leading apps in Moscow, Cabify and Hailo dominate Madrid and Didi Kuaidi enjoys its first-mover advantage in China despite Uber expanding in all those markets.
Prudent move. If Lyft can figure out how to grow in markets already dominated by Uber it will be a much stronger company than if it waters down all its resources playing Uber's game. In fact, a lot of Lyft drivers and riders prefer the Lyft experience. If Lyft can maintain the service differentiation, it can grow to a strong, if smaller number 2 player. And eventually in any market it chooses to go into. Perhaps like a Southwest Airlines.
Kudos to the Mercury News for writing a pretty decent analysis article on "Silicon Valley". The Merc and Chronicle never really seemed to take their role as covering the most booming industry in the past few decades very seriously.
How do Uber/Lyft etc. get away without paying Apple's 30% tax on in app purchase? I'll be surprised if Apple don't show up one day asking for a big check, every month, forever...
EDIT: Thanks for the clarity here, external goods and services are excluded from in app purchase. Makes sense, but surely represents a loop hole... that I think something I'm building might be able to exploit :-)
Because you're not buying features or consuming what you're buying through the app.
Is Amazon supposed to give 30% of all purchases made through the Amazon app? ofcourse not. If Amazon made additional search features an optional upgrade for the app, I'd imagine Apple would want a piece of that.
Because they obtain the user's credit card information independently. Developers who use the CC associated with someone's Apple ID are the ones paying the in-app purchase commission.
This is not the only advantage. Another is being able to serve international travelers. You can step off a plane in another country and keep using Uber. These users may be relatively few in numbers but they have an outsized influence.