Uber will win self-driving

🌈 Abstract

The article discusses the dynamics of supply and demand in the ride-hailing industry, particularly in the context of the emergence of self-driving cars. It explores how the platform that controls the demand will have a significant advantage in the future, and why Uber is well-positioned to benefit from this shift.

🙋 Q&A

[01] The Dynamics of Supply and Demand

1. What are the key points made about the relationship between supply and demand in the ride-hailing industry?

• The article states that most markets are demand-driven, but this is not always the case, as seen in recent years.
• It provides examples of Lyft focusing on innovative features for riders, while Uber's focus in the US was on supply, and in Bengaluru, the demand has shifted to Namma Yatri and Rapido where the supply is.
• The article suggests that with the advent of self-driving cars, the platform that controls the demand will have a significant advantage.

2. How does the article explain the potential impact of self-driving cars on the ride-hailing industry?

• The article suggests that with self-driving cars, there will be no more drivers, and the labor component will be eliminated.
• It envisions a scenario where people with self-driving cars will be able to rent them out to the platform that has the most demand, decoupling the fixed asset (the car) from the labor.
• The article argues that this will give the platform that owns the majority of the demand more flexibility in terms of pricing and loyalty programs.

[02] Uber's Competitive Advantage

1. Why does the article suggest that Uber is well-positioned to benefit from the shift to self-driving cars?

• The article states that Uber owns the most demand worldwide today, and the author is bullish on Uber because self-driving will make it even more dominant.
• The article suggests that the platform that owns the majority of the demand will be able to do more with its loyalty programs and subscription programs than it can do today.