alt Hacker NewsUber’s situation was different, though. The reason Uber were bleeding money is because they purposefully made all their rides cheap to undercut the taxi businesses. People used Uber because it was cheaper than renting a taxi.
Now you can’t really find taxis anywhere, even at airports it’s a lot more difficult than it used to be.
Once the taxi business was disrupted enough, Uber’s pricing skyrocketed and customers had basically no other options for competition on pricing.
OpenAI basically created a new market. There is no AI chatbot incumbent to disrupt and swallow.
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They aim to undercut labor.
For now, businesses are getting addicted to cheap tokens. As the screws get turned, business will debate whether they should spend budget on humans or tokens. What's further devastating is that humans are also becoming addicted to cheap tokens. Much human output is nowadays a token slopfest. People are becoming dumber too. So the real business question will be spending budget on token monkeys or tokens.
People use AI because it is cheaper than paying humans to think. Soon you won’t really be able to find human thinkers.
Uber's situation is exactly the same. OpenAI is offering inference for a bunch of industries at prices that make it more competitive than hiring humans to do the same work.
If the break-even price to actually provide the service wasn't actually economic compared to humans, would there be nearly as much of a market? That's the real question. OpenAI is basically betting that they can live long enough that AI systems get built around them, which creates enough of a lock-in that they still have customers when prices increase by a lot.
My family and I have gone back to using car services for rides to the airport b/c "Uber XL" seems to include a WIDE variety of vehicles in terms of size and cleanliness.
A car service is about the same cost, the car looks brand new and clean and the driver is helpful.
You still can get taxis, at least in Australia. And they hound you at the front of the airport.
They just consistently cost more and have worse service even after uber increased prices.
The uber situation was even more insidious than that. It wasn't like college students were calling cabs to go to bars in 2013. Uber created a market. It was essentially a mind virus. Gee now I can go to this place all for $7. Chum the water, establish the new pattern of living that people won't ever back away from, then twist the knife and raise prices knowing they won't revert back to whatever Old Way now long forgotten or not even engaged with by the upcoming generation.
Many such cases.
But there are competitors. The race is to corner the market.
Uber/Lyft takeover had little to do with price (though, yes, they were cheaper) and everything to do with reliability and overall quality of service. Even though ride sharing industry lost money in subsidy arms race and side bets it was fundamentally sound in major metros since early on (similar to how Amazon was fundamentally sound from early on, despite not recognizing profit for a long time). Popular "analyses" kept equating Uber/Lyft with firms losing money on every sale with no path to fix it but the demand was always there as riders had already left taxis and transit on reliability and convenience grounds.