Horrible numbers! They cannot get the unit economics to work. In order to make up for that fundamental flaw, they are trying to throw a number of things at the wall(UberEats/UberFrieght/SD/Bikes/etc) and see if something sticks. Each of those other bets seems poor, thus far.
They better focus on getting their original business in shape(call a cab via an app). I would be curious to know if they tried to raise prices in any markets and what the results were. I'm sure they want to know this for themselves and their investors thus far. Has anyone seen data/insights into such experiments by Uber/Lyft/Ola/X/Y/Z?
Given that none of the ride-sharing companies are sharing insights on such experiments, I am going to conservatively assume that these companies have low/no confidence that they can raise prices. Network effects make a good moat. But demand elasticity, substitute products, and competition seem to be dominating over the network effects.
Their original business is a good one. Price and value are way out of sync. UBER at $100-120B is way overvalued. Not touching UBER/LYFT stocks with a long pole at these valuations. Overpriced by 3-4x in my view. When they fall by 70-80%, will buy some.
The real problem that I see with using Über in South America is that the service is not improving.
- The time estimations are way off
- The app doesn't know one-way roads well, although they should have a lot of training data on the routes I go on
- They allow drivers haggling for the price by forcing users to pay with cash instead of credit card.
- The app doesn't know about the road tarifs sometimes, and the driver is not allowed to ask that money from me, which makes an awkward situation
- Sometimes I'm getting 30 year old cars, which the Taxi companies filter for
I would happily pay more than the current price, but I need more reliable service, which the software could provide.
Right now Taxis with all their problems are still competition.
I’m curious to know more about ridesharing in South America, specifically the haggle portion. If the credit card was allowed it seems like it would alleviate a decent amount of the issues you named in your post. Why would they disallow credit cards? Is it a cultural problem, infrastructure problem or something else?
The other issues you mentioned seem to be tech related in that as companies that offer navigation services improve their data and services in South America the experience there should markedly improve.
I select credit card, but at some places the drivers wait 5-10 minutes, ask where I'm going and write that I should cancel the ride and they bring me for double the cash. At that point I also have to pay for cancelling the ride, and I'm also late, so I have ti accept their offer. They use the Uber messaging system and Uber doesn't catch these drivers (they should just filter for drivers that want users to cancel), although it would be very simple.
I had similar experience living in Sweden, where the market is present but ride sharing has not quite penetrated yet. For the most part (90% of the time in my experience) the ride share driver wouldn’t try to pull anything like you describe. About 10% of the time I would have an experience very similar to what you describe. Every time I was able to continue the normal transaction, however, by being firm with the driver and insisting that they continue the ride. It’s an interesting power dynamic that reflects supply and demand though, because I noticed that if you’re calling the ride at a time where there aren’t going to be a whole lot of drivers, the driver was a lot more insistent and willing to fight back on the deal set by the rideshare company.
It's very interesting, I have been feeling this in Dominican Republic, where people are screwing tourists whenever they can, but Sweden is one of the most advanced countries in the world, where I imagine that this isn't that usual behaviour from most people.
Where I stayed there were a lot of poorer people by Sweden standards. This was in Skåne, which is an area well known in Sweden for being a location where a lot of poorer immigrants reside (mostly in Malmö, where I lived). So it actually might be a better parallel to the DR than you would first imagine.
I haven’t been to the DR personally, but am well acquainted with Central America in general, having been to several countries. So I would say that this kind of behavior is not nearly as noxious or obnoxious as you might observe in Central America, but is similar enough to draw a decent parallel.
Boca Chica, Dominican Republic whenever I wanted to go to Santo Domingo (though Boca Chica is anyways a bad place to go to, any other part of DR is much nicer). Also Recife, Brazil, also far from the city center.
They better focus on getting their original business in shape(call a cab via an app). I would be curious to know if they tried to raise prices in any markets and what the results were. I'm sure they want to know this for themselves and their investors thus far. Has anyone seen data/insights into such experiments by Uber/Lyft/Ola/X/Y/Z?
Given that none of the ride-sharing companies are sharing insights on such experiments, I am going to conservatively assume that these companies have low/no confidence that they can raise prices. Network effects make a good moat. But demand elasticity, substitute products, and competition seem to be dominating over the network effects.
Their original business is a good one. Price and value are way out of sync. UBER at $100-120B is way overvalued. Not touching UBER/LYFT stocks with a long pole at these valuations. Overpriced by 3-4x in my view. When they fall by 70-80%, will buy some.