An early Uber employee explains why Uber's network effects are local, not global like Airbnb's. Uber wins by minimizing wait times and pricing within each city, and it created a driver loyalty program to compete with Lyft. Global brand recognition helps when travelers go abroad, but it's weak compared to Airbnb's cross-market advantage.
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So you also have, you know, the unique kind of experience of, you know, being so early at Uber and, you know, with the kind of expansion and scale, you know, also seeing network effects, right? That marketplaces of course have. So, you know, could you maybe share more about, you know, when you saw network effects kind of like start to form in the early days and maybe how that, I would say just more generally speaking, started to play out?
Yeah. So I've always envied Airbnb's network effects because they are cross They're global, right? If you're planning a vacation in Paris, you go to Airbnb and you have— they have their inventory and vice versa. If you're a Parisian planning a vacation in Los Angeles, you go to Airbnb because of their selection. Uber wasn't like that, right? You lived in a city, 80% of the rides in any city at least were taken by people who lived in that city. So they didn't care about liquidity in London. They cared about liquidity in, you know, Miami. And so therefore our network effects were local. And the way we thought about network effects was how many minutes to take a ride, what are the price per ride so that no one had to price compare against anyone else. They always thought we were the best option. And how do I get drivers to believe I'm going to give them the most rides? And I had to create a loyalty point program so that They stayed with me and they preferred an Uber ride over a Lyft ride. And that played out over time and it's playing out now today. It's, it's you push a button, get a ride. Uber's faster, cheaper or not, but on average it's much cheaper than Lyft. So it's faster and it's cheaper and the drivers make more money. That network effect is what is what's really profitable, but it's very local. The only non-local network effect for ridesharing right now is the brand recognition. It's now you go to another country, you're like, oh, I assume Uber's there, I should use it. I don't even know who the local competitor is because it's a global brand, but it's a fairly weak network of global non-local network effect.
