[gsaran]

Originally Posted by dark.knight

If it makes any sense, I'd urge Bangaloreans to stop using Uber or Ola as much as possible, use basic autos (without app) or buses, walking and of course, own car.

I appreciate your frustration. However I would any day prefer dealing with the Uber driver vs a very arrogant Bangalore auto driver. I can get in and out of the Uber without having to haggle with the driver or any cash changing hands. No such luck with the auto driver.
This aspect gives me a lot of mental peace.

[KL01toKA03]

Originally Posted by gsaran

I appreciate your frustration. However I would any day prefer dealing with the Uber driver vs a very arrogant Bangalore auto driver. I can get in and out of the Uber without having to haggle with the driver or any cash changing hands. No such luck with the auto driver.
This aspect gives me a lot of mental peace.

It is difficult to change people unless they are offered something significant in exchange. The reason why people shifted from autos to Uber is because Uber provided so much convenience in the form of lower fares, and uniform fares irrespective of the language you speak. The user experience has deteriorated a lot, but unless some alternative is able to demonstrate a lot of benefits, people will continue using Uber/Ola.

[Iyencar]

Originally Posted by SmartCat

Let's assume that this startup makes huge loss on tiny revenues. Naturally, this gets all the investors excited and the founder is now looking to raise capital at a valuation of Rs. 500 cr.

Wait, why would this excite any investors?!!

[dark.knight]

Originally Posted by Iyencar

Wait, why would this excite any investors?!!

The more we explain (and there are multiple viewpoints in this), the more you might get confused, so all I'll say is you need a great deal of suspension of disbelief here.. since like all "software/app" thingies, this too is valued based heavily on future domination and scope.

Scalability is an often used term in the tech industry.. this business is anything but tangible, the only scope is the value adding aspect. What such businesses hope to achieve is addiction, if you need transport you should be brainwashed enough to open UBER or OLA by default, same with Swiggy, Zomato when it comes to food delivery and Oyo for hotel rooms, ridiculously hilarous names apart, these fly-by-acquisition/valuation operators common goal is to have the smartphone surgically attached to your hand, and once that happens you know of no other alternative and they can hike up the prices, build an actual profitable model based on monopoly/duopoly and either continue to reap the profits for decades to come or sell out to even larger players and retire with a few dozen billion $ at hand.

Microsoft once said that 70% of the computers in the world had pirated Windows/Office, this was in the early 00s, they weren't worried. Once the users were used to/addicted to Windows & Office, they used the internet to lock down piracy and sell Windows licenses at insane prices (12k last I heard). Rs.12.k for basically copy-pasting the same bits of code into compact discs.

Once Softbank's children grow up to be dominating players globally (basically Softbank has its hands in most of the major service apps), they'll be rolling in trillions and making us much more poorer simultaneously, minority shareholders will attain instantaneous billionaire status.

[Chetan_Rao]

Personal anecdotes, but I'm sure I'm not the only one in the situation.

Originally Posted by dark.knight

...Swiggy...

Used Swiggy for a short while due to schedules eating into cooking time.

Didn't renew the Super subscription (my need was temporary), and they're bombarding me with desperate messages to get back on the wagon.

..Microsoft ... Windows licenses at insane prices.

Long-term user of licensed software, and I get good prices on their Home Use Program (HUP).

HUP was just moved to a subscription-based model for Office365, no offline licenses are being provided this year onwards. They're in for a surprise.

[Nucliomaniac]

I love this phrase,

Originally Posted by ChiragM

Uber claims that India is a market where they are funding the eater, the courier as well as the restaurant in terms of building the business.

What a Joke. The loss is 4 times of the Revenue.

[srini1785]

Originally Posted by dark.knight

Scalability is an often used term in the tech industry.. this business is anything but tangible, the only scope is the value adding aspect. What such businesses hope to achieve is addiction, if you need transport you should be brainwashed enough to open UBER or OLA by default, same with Swiggy, Zomato when it comes to food delivery and Oyo for hotel rooms, ridiculously hilarous names apart, these fly-by-acquisition/valuation operators common goal is to have the smartphone surgically attached to your hand, and once that happens you know of no other alternative and they can hike up the prices, build an actual profitable model based on monopoly/duopoly and either continue to reap the profits for decades to come or sell out to even larger players and retire with a few dozen billion $ at hand.

Looks good on theory but does not work so smoothly in practice. For the simple reason that customers are not automatons or dogs in ivan pavlov's experiment. Once it reaches a point where there is pinch in their purses, they will always start looking for alternatives and that's the end of tech bubbles.


See this thread :

https://www.team-bhp.com/forum/stree...than-uber.html (Why is Ola suddenly more expensive than Uber?)

[girimajiananth]

Even after all these years of operating, if they continue to suffer such huge losses, should we not question the business model? The aggregators fleece customers with their surge pricing and on top of it, they do not own a single car, what went wrong?

[V.Narayan]

Where the likes of Amazon, Flipkart, Uber, Ola and Oyo go I don’t grudge the fact that they have pumped in a lot of FDI into India. Total FDI into the country was ~$44.1 billion for 2018-19 or over Rs 300,000 crores. Some of this came from the likes of these e-commerce companies that are burning equity to buy market share and attempt to change the way we, the customer, consumes. They are using the technological prowess of their platforms to act as aggregators and connect customer and supplier more efficiently and seamlessly i.e. acting as a sort of super middle man cum fulfillment agent. So far so good.

I do not have data to speak about Amazon and Flipkart but Ola, Oyo, Uber are without a shred of doubt using their financial muscle power to beggar their supplier-partner be it the driver or the small guesthouse or the food supplier. Nothing new about squeezing your supplier if you can. It is a part of the ebb and flow of business. But in a normal business with normal cash resources you are always conscious of leaving something on the table for your suppliers because you cannot do without them or buy your way out if you inadvertently bankrupted them through your own bullying. In normal businesses (note I do not use the phrase ‘traditional’) no matter how large you get (think Mahindra or Bajaj or TVS) your suppliers are a face and a name and like the memsahib and the maid both understand the need to co-exist.

Some of these e-commerce aggregators, with a limitless purse, do not have the need to build their business in a healthy way of live and let live. The over whelming monetary power of an Oyo or Uber versus the resources of a guesthouse or driver are so skewed that the relationship has to end up being deeply exploitative considering that these chaps are not Jamshedji Tata or a Jamanalal Bajaj. The relentless pursuit of shareholder valuation at the expense of all other stakeholders is what distinguishes these guys from a normal business. If you do not invest in a fair distribution of the benefits of your business to all stakeholders of that business then you corrode the very society in whose waters you swim.

[Malyaj]

One needs to distinguish between companies that are using cash for developing technology versus those that are burning cash to acquire customers. Startups who are aggregators (Swiggy, Ola, OYO) are the latter type.

However within these aggregators there is difference too. Ola/Uber control the pricing, the cabbies do not. Swiggy/OYO do not control the pricing, the restaurants/hotels do. Moreover the taxi service is more or less commoditized whereas meals and hotel rooms are not. This distinction is fundamental and important.

Control over pricing and product enables undercutting. When you see a Biryani being sold for Rs 69 online, it is clear that both restaurant and aggregator are footing the bill. When the discount is less or delivery free, it is usually the restaurant bearing it alone. Standalone outlets are able to withstand this for some time, bigger chains for longer. Well funded companies like Cult.fit, Box8 and Fresh Menu who also supply through the aggregators can play this game almost endlessly.

If the current bloodbath in the restaurant industry continues and independent restaurants shut down, Swiggy/Zomato will have to contend with bigger vendors like eat.fit and Box8 who will hammer down the commissions and demand to have the analytics shared with them.

Ola and Uber stand to benefit more from the duopolistic conditions and only have to sort out their driver issues and it is more or less straightforward for them. Their supplier base (drivers) has no identity of its own and this vastly eases stakeholder management.

[kiku007]

Just asking for clarity sake.

So Uber has accumulated almost Rs. 4,000 crores in loss. Obviously they are under greater scrutiny and we rightly raise questions about their business model.

At the same time, what about the accumulated debts of public and private sector companies in the telecom, airline, petrochemical industries? What's so different/better about their business model?

[ramzsys]

Originally Posted by kiku007

What's so different/better about their business model?

They are service oriented enterprises; profit isn't mandatory; the 'for the people' part in the definition of democracy.

[dark.knight]

Originally Posted by srini1785

Looks good on theory but does not work so smoothly in practice. For the simple reason that customers are not automatons or dogs in ivan pavlov's experiment. Once it reaches a point where there is pinch in their purses, they will always start looking for alternatives and that's the end of tech bubbles.

Brilliant usage of words, though I know the thread already, and I was one of the customers who stopped using UBER after their 250% price hike.

However, I'd say an overwhelming majority of mankind, are automatons, not dogs though, dogs are far too intelligent, but automatons for sure. Ivan Pavlov laid the foundation for consumer behavior, in India its simple, set a bollywood stage, dress the female model in lehenga, the male model in sherwani, make them sing and dance, show firecrackers and people will throng to buy that product in the advert, either that or hire a cricketer.

Swiggy, Zomato are a rage amongst people I know, to them travel means UBER/OLA, no matter if it comes with tattered seats, dusty interiors and an engine reminiscent of an 80s tractor at 3x the cost of self driving, they'll seat themselves in their expensive clothes/partywear like its all en vogue. If I'm wearing a suit I need my own car as a controlled environment. See, people are automatons.

Its because I want this business model to fail miserably, that I've written the previous post, 10% of consumers are woke, but 90% are blind, deaf and dumb automatons awaiting the next input by idiotbox television. The companies are ROFLing their way to the banks as we speak.

[kiku007]

Originally Posted by ramzsys

They are service oriented enterprises; profit isn't mandatory; the 'for the people' part in the definition of democracy.

Did you mean companies like BSNL and Air India are service-oriented and profit isn't mandatory?

I can understand profit not being the motive of public transport, healthcare etc.

Anyways, what should a tax-paying Uber user worry about? Uber's pilling losses or the Government burning their tax on failing public sector enterprises?

[Samurai]

Originally Posted by kiku007

Did you mean companies like BSNL and Air India are service-oriented and profit isn't mandatory?

I think what he means is those companies are part of government social welfare program. So profits are not a priority. Just like police or military shouldn't think about profit.

I don't believe government should be running businesses, they should only regulate. But we got stuck with communist style socialism because of India's early friendship with USSR.