News   Jul 12, 2024
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Taxis and ride-sharing in Toronto

Given the tactics Uber have deployed to date, a potential competitor would have to have very deep pockets to handle initial cash burn. As Kristine Hubbard pointed out in Toronto Life, Uber built a huge user base via their brokerage operation and then pushed that over to UberX. A competitor would have to consider something like buying Beck and their app/userbase to gain any momentum I think.
 
Given the tactics Uber have deployed to date, a potential competitor would have to have very deep pockets to handle initial cash burn. As Kristine Hubbard pointed out in Toronto Life, Uber built a huge user base via their brokerage operation and then pushed that over to UberX. A competitor would have to consider something like buying Beck and their app/userbase to gain any momentum I think.

The good news/bad news with the Uber platform is that they insist on "independent operators". This means that Uber cannot force drivers to use Uber exclusively. This allows for a very quick transition from one platform to another for drivers (or the use of multiple platforms). I'm sure if there was a cheaper/better option many drivers would initially use Uber for volume but keep the other app running to maximize their profits.

The same for customers. We can have as many apps on our phone as possible. And I'm sure there will be apps that can aggregate the eventual multiple platforms (like Kayak does for hotels and airports). So a customer can search for the quickest or cheapest ride.

There are relatively few web based products where the first successful product is the one that monopolizes the market. The barrier to entry once Uber breaks down the regulatory restrictions is very low.

All of this could happen in a year or two. And then in 10 years an automated car company (Google, Ford, etc) may decide that they can maximize sales by rolling out their own app (just like how they use to own rental car companies). Or all the car companies. They produce, own, and manage the cars that we will use on a daily basis.
 
The good news/bad news with the Uber platform is that they insist on "independent operators". This means that Uber cannot force drivers to use Uber exclusively. This allows for a very quick transition from one platform to another for drivers (or the use of multiple platforms). I'm sure if there was a cheaper/better option many drivers would initially use Uber for volume but keep the other app running to maximize their profits.

The same for customers. We can have as many apps on our phone as possible. And I'm sure there will be apps that can aggregate the eventual multiple platforms (like Kayak does for hotels and airports). So a customer can search for the quickest or cheapest ride.

There are relatively few web based products where the first successful product is the one that monopolizes the market. The barrier to entry once Uber breaks down the regulatory restrictions is very low.

All of this could happen in a year or two. And then in 10 years an automated car company (Google, Ford, etc) may decide that they can maximize sales by rolling out their own app (just like how they use to own rental car companies). Or all the car companies. They produce, own, and manage the cars that we will use on a daily basis.

Uuuuuuuuuuuuuntil they prevent their drivers from working for a competing app just like that taxi companies did. Can you imagine how devastating it would be for some Uber drivers if they got kicked out and barred from working for Uber?
 
Uuuuuuuuuuuuuntil they prevent their drivers from working for a competing app just like that taxi companies did. Can you imagine how devastating it would be for some Uber drivers if they got kicked out and barred from working for Uber?

If Uber wants the drivers to be independent operators they have to allow them to work for the competitor. Uber has structured it this way to avoid a bunch of additional costs (taxation, regulation, legal liability, labour laws, etc).
 

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