
Dropbox and Uber: Worth Billions, But Still Inches From Disaster - dkoch
http://www.wired.com/business/2014/01/dropbox-uber/
======
snowwrestler
The ease with which customers can _or will_ migrate from one service to
another is greatly exaggerated by this article, and many many other articles
like it.

Look at web search--it's no harder to type www.bing.com instead of
www.google.com (it's actually 2 letters easier), and for most common searches,
the results will be exactly the same. "What time does the Super Bowl start".
"Facebook login".[1]

And yet, Bing has not significantly dented Google's web search market share
despite $billions of investment in technology, advertising, incentive plans,
etc.

> If Dropbox accidentally destroyed just one person’s file, he said, it could
> erode the trust of all its users.

Ha! Dropbox destroys user files against the will of users all the time--it's
inherent in the concept of a syncing service, and why we warn each other,
"Dropbox is not a backup service."

And if you're thinking of just straight-up data corruption or loss, look at
Evernote, which does that on a regular basis yet continues to grow.

There's nothing more to this story than the fundamental threats that face any
business in any industry: if you fail to please your customers, you leave the
door open for competitors. But, that doesn't mean there is no margin for
error. Or even a small margin for error.

[1] [http://searchenginewatch.com/article/2051199/Facebook-
Login-...](http://searchenginewatch.com/article/2051199/Facebook-Login-Fiasco-
Demonstrates-Challenge-in-Competing-with-Google)

~~~
markshepard
One caveat though. Out of 200m Dropbox users only 1-2% of users will be paid
users (2-4m). The remaining 98% of users have not found a compelling reason to
pony up yet. These users are fickle and have less inertia than paid users. So
the threat is real as the article suggests.

~~~
fleitz
Yes, it would be absolutely horrible if Dropbox lost their non-paying users.

~~~
smtddr
I assume you're being sarcastic. Non-paying customers do server at least one
purpose for Dropbox, word of mouth advertising and the fact they tell others
_" I'll just share the file you need on dropbox. Go sign up, it's free"._ All
these non-payers, and the people they refer, may start paying at anytime in
the future for whatever reason.

~~~
thaumasiotes
> I'll just share the file you need on dropbox. Go sign up, it's free

Why would you need the other party to sign up? Isn't that the point of public
links?

------
john_b
> _If Dropbox accidentally destroyed just one person’s file, he said, it could
> erode the trust of all its users. “This is like the same sort of genre of
> problem as the code that you use to fly an airplane. Even if it’s a little
> bug, it’s a big problem.”_

As someone who writes code for jet engines, I find this perspective laughable.
A better analogy would be if an automated baggage handling system lost your
bag. You'd lose your stuff and the airline would lose your trust. You might
rant about it on a blog and a few people would get upset and switch airlines
with you. But nobody dies.

------
primitive_type
As a frequent Uber user in Chicago, I can attest to the fact that Uber _often_
has no available rides for me when I need one. Just this past weekend at a
rather busy intersection in Chicago, after requesting both an UberX and
regular Uber taxi multiple times, I kept getting texts from Uber saying "we
can't find an Uber for you at this time. Sorry for the inconvenience. Please
try again soon!"

So the article's suggestion that "customers opening up the app and seeing no
rides on the map" would be an existential threat to Uber is currently being
proven wrong by Uber's success. That happens _all the time_ and Uber is still
doing alright.

~~~
enobrev
While in Chicago over the holiday I tried out an app called Hailo to get
yellow cabs on 3 separate occasions when none were to be found. I both enjoyed
and recommend the app (with which I've no affiliation).

Not sure if you'd get the same response as uber taxi. Some of the hailo
drivers also had the uber app running somewhere on their dash and some did
not.

------
spodek
Startups tend to be halfway between taking over the world and bankruptcy.

That's why we love them and founders sleep on floors.

~~~
vikrum
I'd go so far as to say all companies balance this act. A company can implode
at any stage of its life. See: Nokia, Blackberry, etc.

~~~
cpach
Good point. But for example, in 2007 I’d say Blackberry were miles and not
inches from death. They could probably have steered in another direction.

------
adventured
"Dropbox is not diversified"

How diversified was Google in its first ten years? Ads and desktop search
overwhelmingly ruled. How diversified is Facebook? How diversified is Twitter?
How diversified is Apple? (with the iPhone generating 75% of their profit)

This tends to apply to almost any big company in its formative years. They get
big because they put all their wood behind a killer arrow that made all the
rest possible. That's not to say Dropbox will have that future, but rather
that criticizing them for not diversifying at this point is a low quality
criticism.

~~~
patrickk
Exactly. Any company has to be focused on executing one thing well for several
years into it's life if they want to succeed at all.

The article struck me as being very poorly written for this reason. As if
offering some generic web widget will help Dropbox diversify and survive if
users lose faith in their syncing product. If the author knew anything about
startups he wouldn't have made this the central point of this piece.

------
rmc
The ignorance and arrogance of Uber about the French union situtation is
mindbogglying:

> _This is also why Uber believes it can’t compromise once it begins to offer
> its services in a new city, or a new country, like France. It strives to
> work with regulators to accommodate its existing service rather than
> changing how it works._

It's not the regulators/government that are a problem, it's the taxi unions.
You're talking about a place with a very strong, and very long history of
active union activity.

"We can't compromise on service". "Fine, we'll drag your drivers out of their
cars and set the cars on fire. Your move."

~~~
nhaehnle
Could it be that, given the existing setup of the market, Uber is a good guy
in the US, but a bad guy in France? This is probably not a popular opinion
here, and I'm neither USian nor French, but hear me out:

In the US, there is a system of taxi medaillons whose result is that rentiers
get rich [0]. The tl;dr: the right to operate a taxi is bound to license of
which there is an artificially limited supply. These licenses typically do not
belong to drivers but to rentiers, who rent them out to drivers. The drivers
lose, the passengers lose, the rentiers win.

France has unions, which makes it unlikely that there are third party rentiers
who profit off the system in the same way as it happens in the US. Perhaps the
passengers still lose, but the drivers probably don't.

That makes the framework in which Uber is trying to enter _very_ different,
and it means that Uber just may not be the good guy there. After all, pretty
much everybody can agree that "rentiers = bad". On the other hand, "workers =
bad" has far less support.

[0] [http://blog.priceonomics.com/post/47636506327/the-tyranny-
of...](http://blog.priceonomics.com/post/47636506327/the-tyranny-of-the-taxi-
medallions)

~~~
byroot
In France we do have a limited supply of taxi licences. But they are usually
owned by the driver.

Since they worth a lot (~250k€) and that taxi driver is a liberal profession,
they acts as a retirement plan / life insurance.

This is why taxi unions gets really upset when there is a governmental plan to
raise the amount of licences, or when any unregulated competition shows up
(motorbike taxis, "private drivers", and now Uber).

~~~
krakensden
> they are usually owned by the driver

Yup. Especially in SF, the medallion owner just won the lottery and rents it
out. No one is going to risk going to jail to protect their boss' monopoly.

~~~
rmc
So what happened when the bosses protest and go to jail?

------
fit2rule
I've personally never found Dropbox to be what I want in a file-sharing
device.

Ultimately, I think its really a shame that the OS vendors haven't made
'cloud-based auto-discovery and user-control over publication' a major feature
of their OS. The reason we need/want/love Dropbox is simply that the
mainstream OS vendors dropped the ball, imho, and got lured away into Web2.0
land when they should simply have been adding these features - a distributed,
cloud-based networked filesystem - directly to the OS. Why do I need another
custom extension for this, from an unknown startup, when it could as easily be
implemented as an OS feature? I think the reason is, the vendors are asleep at
the wheel.

I've enjoyed the process of setting up my own cloud services for things like
filesharing, using whatever tools I can .. but I sure wish it were just
something to 'turn on' in OSX or Ubuntu, or whatever .. without requiring a
third-party involvement (Ubuntu One or iCloud = no thanks!).

So I see Dropbox's future as being pretty cloudy, personally. I think the
repercussions for American cloud providers, especially, are coming .. the
desire for a private cloud is a big itch.

------
adventured
"Uber could make the recent complaints go away fairly quickly. It could drop
surge pricing. And it could acquiesce and change its service in cities where
government and industry have come out against it."

This is false. If Uber gives an inch, their competitors will go for the kill
and move on to targeting the jugular. What they want is for Uber to not exist,
and for there to be no new competitor or revolution in their business. There
is no way to appease their competitors that results in Uber surviving as a
useful service.

What Uber's competitors want is very simple: 1) they want to not have to
compete with any innovation; 2) they do not want to have to change or improve
their services; 3) they want no new, fast growing entrants allowed in their
markets

Basically what they want is a frozen, guaranteed market with zero market
forces. That's why their response is: violence, regulations, political
leverage, etc (anything but innovation or actually competing with Uber).

------
levlandau
If all startups face the same problem then the strongest startup wins. Simply
naming a risk that all startups face and then saying the strongest startups in
their respective domains are more at risk isn't really cutting it for me. If
there's anyone that would figure out how to store my files in the cloud
reliably it's probably dropbox and if there's anyone that's going to solve the
math, science and cs problem of moving cars around...it's probably uber and
not lyft or any of the other competitors. For now, their $ Billion valuations
are safe and sound.

------
philrapo
The alternatives are either running your own service or switching to a dropbox
competitor.

Even at huge companies with resources dedicated towards IT infrastructure,
systems still go down with regularity. Dropbox is probably still more reliable
than what many large companies use.

------
caruber
The real strength of Dropbox comes from the ecosystem of apps that use dropbox
to store data. It is hard for newcomers to challenge that network effect. But
competitors like Tonido are doing interesting stuff by focusing on the
security, privacy and the private aspects of owning your own cloud. If they
are able to change the narrative from utility to trust and security then
newcomers have a fighting chance.

Finally it comes to what wins the customers: Trust or Utility or the Balanced
of Both.

~~~
lotso
Which apps are using Dropbox to store data?

~~~
simonw
Tons of mobile apps do this. 1password is probably the best example, but just
the other day I decided I wanted to be able to view a Sketchup file on my
phone and the app I found ( [https://itunes.apple.com/us/app/sightspace-
free-d/id56721967...](https://itunes.apple.com/us/app/sightspace-
free-d/id567219670?mt=8) ) had the option to load files from Dropbox.

