Matt Levine: evaluation

Transcript context

…We’re in New York. We have Uber. We have taxis. They compete against each other. There at least appears to be a long history of the taxi sector being somewhat of a natural monopoly. What’s the final equilibrium in New York City and elsewhere? And does the company Uber have positive value, given that right now it’s losing money per ride? Chinese investors are subsidizing us at the margin. If the price goes up, I would prefer to shift back to taxis. How do you think about that market? As a consumer, I really like Uber. I think that Uber addressed some technological failing in terms of being able to hail Ubers without going out on the street and waiting for them, and being able to hail them around the world. Hailing taxis in New York is nice, but it’s nice to have an app on your phone where you can do it wherever you go. So as a consumer, I’m a big fan of Uber. Are taxis a natural monopoly? They’re certainly a seeker of regulatory rents in New York. By Uber’s rhetoric about breaking down . . . There’s clearly some taxi-protective regulation that is not pro-consumer. To the extent Uber is fighting against that, they make a good case for their flagrant disregard for the law. [laughter] The big question is, they continue to be subsidized by investors. What is the long-term outcome of that? And I don’t know. Their bet is that the long-term outcome of that is self-driving cars, and that they have some sort of advantage in being the provider of the self-driving car app, which I’m not sure if that is super compelling because it seems to me it’s hard to build a self-driving car. It’s relatively easy to build a routing app to send the self-driving car to you. If Tesla or Apple or whoever built the best self-driving car, I’ll download Tesla’s app. So it’s a risk for Uber. As a strategy, bootstrapping by getting a $70 billion market cap and then spending a lot of money to be the leader in self-driving cars is not a crazy strategy. They built from an app to being a $70 billion company. The so-called moat for the company — it starts with the app, but over time it shifts to owning a fleet of self-driving cars?…

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