
Lyft, Didi, Ola and GrabTaxi Partner in Global Tech, Alliance to Rival Uber - kevindeasis
http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/
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itgoon
Do you want to beat Uber? Pay the drivers better.

Uber has shown that this is plenty of money to be made. Let the drivers get
it. Choke off Uber's resources.

~~~
JumpCrisscross
> _Do you want to beat Uber? Pay the drivers better._

In a race towards a self-driving fleet, this does not appear to be the winning
strategy.

~~~
spiralpolitik
Uber has to survive until they can get a self-driving fleet. The winning
strategy in the short term is to choke off Uber's cash flow, so paying drivers
more so they drive for you rather than Uber is the winning strategy at this
point of the game.

~~~
toomuchtodo
> Uber has to survive until they can get a self-driving fleet.

Which is hilarious. Tesla already has a semi-autonomous fleet of tens of
thousands of cars, improving daily.

Best of luck Uber.

~~~
SilasX
Can someone explain the logic there? That's never made sense to me and yet
gets repeated a lot.

Ride-hailing services are a saturated market with major network effects (the
more drivers on a service, the faster they can get to you) and thus, expensive
barriers to entry.

It just seems like it makes more business sense for Tesla to sell/license as
many self-driving cars as they can to any and all services that want them, and
concentrate on their core business, rather than branch out into an entirely
new market and write a whole new app from scratch and market it.

Can someone make the opposite case?

~~~
toomuchtodo
> Ride-hailing services are a saturated market with major network effects

Not so much. Drivers frequently run Uber and Lyft simultaneously. There is no
"stickiness".

> It just seems like it makes more business sense for Tesla to sell/license as
> many self-driving cars as they can to any and all services that want them,
> and concentrate on their core business, rather than branch out into an
> entirely new market and write a whole new app from scratch and market it.

You'd think so, wouldn't you? But apparently that's the direction Elon is
going: [http://www.techinsider.io/elon-musk-hints-tesla-may-enter-
ri...](http://www.techinsider.io/elon-musk-hints-tesla-may-enter-ride-sharing-
space-2015-11)

> write a whole new app from scratch and market it.

I think its humorous this is thought of as expensive. How much does it cost to
build an iOS/Android app and run the infrastructure to match riders to
drivers? $3-5/million/year? Tesla has _hundreds of millions of dollars of
credit available to it_. And you know, _the cars receiving software updates
constantly_.

~~~
SilasX
>Not so much. Drivers frequently run Uber and Lyft simultaneously. There is no
"stickiness".

I meant from the perspective of users and providers, not drivers (which are
irrelevant in the case of self-driving cars...). You have to get all these
users to download another app when their existing one works fine. That's money
that Tesla could be further investing in their core specialty rather.

>You'd think so, wouldn't you? But apparently that's the direction Elon is
going

Yes, which is why I'm asking; the fact that someone is in fact doing it
doesn't resolve this mystery.

>I think its humorous this is thought of as expensive. How much does it cost
to build an iOS/Android app and run the infrastructure to match riders to
drivers? $3-5/million/year? Tesla has hundreds of millions of dollars of
credit available to it. And you know, the cars receiving software updates
constantly.

Right, but they haven't trodden the path of scaling up a ride-hailing app and
made the numerous optimizations that Uber/Lyft have made based on the unique
problems of that domain.

~~~
matthewowen
> I meant from the perspective of users and providers, not drivers (which are
> irrelevant in the case of self-driving cars...). You have to get all these
> users to download another app when their existing one works fine. That's
> money that Tesla could be further investing in their core specialty rather.

That isn't what network effects are. That same argument applies to anyone
competing against an incumbent.

~~~
SilasX
Then incumbence effects -- either way, the point is that it's a barrier to
entry.

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srameshc
The more I read such stories, the more I feel Uber will rule.

~~~
pbreit
Why is that? Right now the local players seem to be competing very
effectively.

~~~
mkaziz
Because they're trying so hard, and the only time I ever hear of people using
Lyft instead of Uber is when Lyft is offering some massive promotion.

(disclaimer: anecdote, but then again we're talking about vague feelings)

~~~
ecnahc515
It's funny you say that, because this is exactly how Uber itself expands (or
used to at least). Lyft does indeed need to offer a promotion to get people to
use it, it's almost always like that when cutting into an existing, (somewhat)
established market. When Uber started, they had to do the same thing to
convince people to use Uber, not only on the customer facing side, but on the
driver side too.

~~~
wlesieutre
Uber still has promotions in new markets, at least as of late 2014. I
registered about a year ago when they showed up in New Haven and periodically
get emails reminding me that I have a $20 credit for my first ride.

~~~
Jake232
Lyft does much more aggressive deals though. When I moved to San Diego ~ 3
months back, they gave me 1month of half price rides. Considering I spend >
$1000 per month on rides, that was over $500 of savings.

~~~
infecto
Woah, over $1000/month in rides? I have to ask why? Assuming you do not own a
car but I would assume its efficient to own a vehicle in SD?

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tdaltonc
If more and more intermediates are allowed to enter this meta-market, it
should cause all of the intermediates to commodify. Drivers already run
multiple ride-sharing apps to get the best price. This deal means that now all
of the apps have made it trivial for riders to do the same. So what value are
the intermediates (lyft, didi, ect) creating/capturing?

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gscott
If you add a bunch of turds together you don't get a diamond... you just get a
larger turd.

