Market dynamics demonstrated in other commodity businesses say otherwise.
In a commodity market you win with combination of price and brand.
When it comes to price, a player with a fleet of a million cars can wage a pricing war for longer than a player with a fleet of 10 thousand cars because economies of scale mean that it costs them less, per car, to provide the service.
If this is a new entrant, the incumbents also have an accumulated war chest from past revenues they can use to outprice the competition.
And they also have more money to out-advertise the new guy. GM spends $3 billion a year on advertising which is why, not counting Tesla, the youngest surviving car company was founded in 1925.
It's also why Kellog dominates in cornflake space, coca-cola in soda business etc.
Which is why there will be a mad rush to grab the market share early on. Once someone reaches significant scale, it'll be virtually impossible to catch up with them.
In a commodity market you win with combination of price and brand.
When it comes to price, a player with a fleet of a million cars can wage a pricing war for longer than a player with a fleet of 10 thousand cars because economies of scale mean that it costs them less, per car, to provide the service.
If this is a new entrant, the incumbents also have an accumulated war chest from past revenues they can use to outprice the competition.
And they also have more money to out-advertise the new guy. GM spends $3 billion a year on advertising which is why, not counting Tesla, the youngest surviving car company was founded in 1925.
It's also why Kellog dominates in cornflake space, coca-cola in soda business etc.
Which is why there will be a mad rush to grab the market share early on. Once someone reaches significant scale, it'll be virtually impossible to catch up with them.