They're trying to become too big to fail, but aren't quite there yet.
Essentially they're undercutting all competitors by artificially keeping fares very low and subsidizing drivers. Subsidies were the primary source of their enormous financial losses in 2016.
Once the competition is completely gone (local cabs, and Lyft in some areas), then they can stop subsidizing themselves and basically hold a monopoly. It's their entire strategy.
I simply don't see how Uber can be a monopoly. You need a critical mass of drivers, but nothing stops drivers from being on multiple networks. This isn't Microsoft doing per-CPU licensing.
> I simply don't see how Uber can be a monopoly. You need a critical mass of drivers, but nothing stops drivers from being on multiple networks. This isn't Microsoft doing per-CPU licensing.
They could force drivers to only work for Uber. "If you go to the competition, you can't work for us", they could try to lobby so that other networks can't legally operate, just like Taxi companies did... They just want to replace Taxi companies, that's why people who think they are the "hero of the libertarians" are misguided.
They could keep track of people as best they can, and shadowban them from all transportation using Greyball so the people couldn't function in society. It'd be kind of like getting blackballed for life from credit card issuers. Effective to the extent they can make a monopoly, probably more effective when it's a shadowban rather than explicit rules stating the person is barred from using the service forever.
It would be rather profitable to be able to hold the world hostage, single out whoever you want and make them hoof it. Particularly if they'd got used to using Uber to get to work or something. Long game would be making private vehicle ownership illegal, but that's very long term indeed. I'm just saying, you can keep going and every step of the way is increasingly profitable. Wall Street would love it.
While I agree with your first statement, the per-CPU analogy may not be right. The CPU (or car) is the resource being leveraged by the OS (or ride hailing service). Also, I may be wrong here but I think it's per motherboard.
For Uber to really become a monopoly would be hard, at best they could split the field with Lyft or others by making an under the table anti-"employee"-sharing agreement similar to the Apple-Google thing last year.
That and about 98% of the USA hasn't heard about any of these bad news stories nor do they care. If their rides start to take 30 minutes to arrive then people will start to care which is what matters. I think much of the rest is Silicon Valley echo chamber stuff.
More or less Redbox' strategy too, from what I can tell. Prices have been creeping up ever since the major competition (Blockbuster et al) dropped out of the market. And I suspect it's not because the costs to run machines has been increasing...
I imagine a great deal of it is the studios increasing their take. This has been a perennial problem for Spotify and other licensees of other media content. Netflix rolls their own now.
Really, it's hard to imagine a future for Redbox in ten years. Even the convenience of a vending machine movie store is nothing next to me not even getting off the couch.
With the prices at $2, which becomes $4 if I don't remember to return it on time... I often opt to pay the $5 to rent using a digital platform. Only time I pick up from Redbox is if I am at the store anyway.
Essentially they're undercutting all competitors by artificially keeping fares very low and subsidizing drivers. Subsidies were the primary source of their enormous financial losses in 2016.
Once the competition is completely gone (local cabs, and Lyft in some areas), then they can stop subsidizing themselves and basically hold a monopoly. It's their entire strategy.