How do these firms even compete with each other?
I understand that different taxi apps in an attempt to attract drivers simply pay more than others apps but how do they even secure the funding to launch an app like that in the first place? Same thing for food delivery apps
Imagine you were an investor, and someone told you, “I’m going to compete directly with Uber Eats, our competitive advantage is that we pay out delivery guys more”. Why would anyone fund that? That’s not a strong competitive advantage.
In: Technology
The plan with basically every single one of these apps is “Fund us so that we can undercut the top dog by paying more/charging less, to put them out of business, so we will then have the monopoly and can charge/pay whatever we want, at which point we turn a profit that goes back to the shareholders.” Early on in the venture capital game this was a fairly consistent strategy for making money. These days, people are just trying to replicate that success, but mostly failing, so a lot of VC has dried up for these kinds of projects. Still, the promise of possible future massive returns has some still willing to invest.
Latest Answers