Uber Replaces Car Ownership

Shaan shares a story about how Uber expanded the transportation market beyond just taxis, changing his own behavior around car ownership.

"I sold my car in San Francisco because I was like, why would I deal with this car? Parking issues, getting broke into, insurance, gas, all that. No, I'll just Uber when I need a ride.

Bill Gurley, an early Uber investor, wrote a blog post called 'How to Miss by a Mile' where he explained that Uber would be bigger than taxis because it's more convenient. With Uber, you got precise timing, it would pick you up anywhere, and taxis didn't really go to rural areas. Uber had more drivers so it was available everywhere. Because it was available everywhere, you got lower price points due to more liquidity in the system.

At a lower price point, maybe I wouldn't have called a taxi just to go from here to my friend's house, but if it's an $8 Uber, I'll actually do it. Because of these lower prices, you get new use cases - people using Ubers to help elderly parents travel or kids. The big use case Gurley identified was that some people just wouldn't buy a car because they'd Uber when needed - which is exactly what happened to me.

In San Francisco, the taxi market was maybe $50 million, but Uber didn't just have some percentage share of that market - it was actually three times bigger than the total taxi market. It was a total market expander, and you see that over and over with any new product creating a new category. It doesn't just eat some share of the existing category; it explodes and becomes bigger than that thing."