Uber is not going to be the Standard Oil of transportation, at best, it's got a hope of being the Walmart of transportation. Like other commenters have said, for Uber to get the level of defensive moats to achieve Standard Oil levels of monopoly and profitability, it doesn't just have to put Lyft and Sidecar out of business, it has to put private cars out of business. That's not going to happen.
The private transportation industry is interesting right now but I see a couple of pretty severe challenges down the road.
The first is the brutal price war that's coming down the pike. Right now, everyone's hiring pretty young white people as drivers because companies are engaging with a big PR push with regulators and they're able to still handsomely profit off disrupting inefficient cab companies.
But there's a reason why cab drivers are poorly paid and have horrible working conditions and it's because transportation has a hard time breaking out of a commodity status. Look at the airline industry in the 1950s vs today. The race to the bottom is something airlines have been fighting tooth and nail. The simple fact of the matter is that, despite all efforts to the contrary, only a tiny minority of consumers are willing to pay even a few dollars extra for a better experience. Once Uber bleeds millions of dollars being the first to fight all the regulatory battles, a Southwest is inevitably going to emerge to Uber's United.
The second major threat is that everyone can already see that the entire industry is going to be disrupted by the self-driving car and it's just a matter of when, not if. All of the private transportation companies are picking up pennies in front of a bulldozer. If they're smart, they're trying to figure out how to leverage what they have into a dominant position in a new industry but that is always a process fraught with peril.
Ultimately, I think the space has a lot of potential but let's not let wishful thinking get in the way of the brutal economics of this space.
Why do you dismiss Uber as being a leader in self driving cars? If anything they are in a better situation because as self driving cars get introduced, they can incrementally switch over from 100% human drivers to 100% self driving.
Since they know where people are going, they will be able to make best use of early self driving cars that have limitations. For example if the first self driving cars aren't allowed on freeways, or a restricted range, then Uber can send human drivers for journeys requiring them, and self driving for the rest. Uber will also have a lot of credit cards on file which is a significant advantage.
Perhaps there is an assumption that self driving cars will follow the existing private ownership, idle 23 hours a day model. I expect it will be the other way around where they are owned by companies who try to maximize utilisation.
I'm not dismissing it, I explicitly addressed it and noted that pivots are always hard and risky.
But it isn't a pivot in their case. They would be able to make an extremely efficient[1] transition from 100% human to 100% self driving. Uber is not in the business of giving rides in human driven cars - their business is to get you where you are going on demand quickly.
[1] Efficient means money (the first self driving cars won't be cheap and will be limited), but also adjusting to public perception (every crash will suspect the self driving bit leading to a minor backlash) as well as all the other tradeoffs that occur. Someone in the same space with one self driving vehicle won't be particularly useful, but Uber can operate with only one self driving vehicle in the fleet.
Right now, everyone's hiring pretty young white people as drivers
The Uber drivers I've had were old Russian men, and a middle aged Chinese guy.
definitely agree. What's stopping some upstart kids with a mobile app and a ton of VC funding from undercutting everyone. What if they didn't take any cut at all and made money on upselling on other services or ads on the app?