What free, ad-supported Uber rides might look like(andrewchen.com)
andrewchen.com
What free, ad-supported Uber rides might look like
https://andrewchen.com/this-is-what-free-ad-supported-uber-rides-might-look-like-mockups-economics-and-analysis/
47 comments
YT now shows 6 ads, for 10 minutes video, they share 50:50 with creator, who gets about 10$(+/-100% depending on viewers demographic) for 1000 views - it is nowhere close to cover the cost of Uber drive.
Andrew Chen / A16z team / Crypto - All hyperbole. Take with pinch of salt.
And even $10 is still pretty low for driving someone even a short distance, if the car isn’t junk and the driver has holidays, sick leave, pension and health insurance.
I could see hospitals paying $10 to lure a potential patient in.
Ah, the black-mirror-esk horror that is the American medical system, which we'll be moving to once our government finally kills what is left of the NHS…
Though more generally I think the only other industry that would pay enough to make the ads worthwhile if not very targetted at the individual passenger, is the industry that the cabs wouldn't want to that visibly be associated with if trying to maintain a wholesome company image.
Though more generally I think the only other industry that would pay enough to make the ads worthwhile if not very targetted at the individual passenger, is the industry that the cabs wouldn't want to that visibly be associated with if trying to maintain a wholesome company image.
Public transport is covered in ads, has a much higher ridership than rideshares (i.e. has many more eyeballs to sell, and much lower per-user costs) and isn't even close to being profitable from ad revenue.
Which is obvious to a lot of people except for SV "tech bros" apparently
> Free, ad-supported Uber rides are inevitable, and if Uber doesn’t do them, a different competitor – perhaps Google! – will do it.
This doesn't survive 5 min of serious analysis. Not everything that becomes cheap end up free
But hey, if they BS hard enough Sequoia might put a lot of money in them
> Free, ad-supported Uber rides are inevitable, and if Uber doesn’t do them, a different competitor – perhaps Google! – will do it.
This doesn't survive 5 min of serious analysis. Not everything that becomes cheap end up free
But hey, if they BS hard enough Sequoia might put a lot of money in them
It’s Uber for timeshare pitches. You get a ride to the airport instead of a fruit basket for sitting through the pitch.
I imagine they would have the driver multitask as the presenter.
I imagine they would have the driver multitask as the presenter.
The blog author is a partner at Andreessen Horowitz.
All the more reason to be skeptical. These VC/Crypto boys live in a bubble. https://a16z.com is hard crypto!
...cool? does that position come with the ability to defy gravity or math?
No, but it does mean that someone (e.g. the authors company) might just put money into the idea.
They don’t even need to BS very hard if they are a partner in the firm, and sponsor a “vetted” team that they think can pivot from something stupid to something profitable.
They don’t even need to BS very hard if they are a partner in the firm, and sponsor a “vetted” team that they think can pivot from something stupid to something profitable.
Benedict Evans is fond of saying that ads is one of the biggest revenue makers for tech but is completely misunderstood by anyone who doesn’t work on it.
An Uber ride typically costs tens of dollars. There is no ad model where you can justify paying that sort of money for random people at scale. All of the examples in the article are forms of specific niches with high ROI (e.g. targeting a user known to buy IAPs to install Candy Crush, email addresses of corporate employees to sell them expensive SaaS products, etc). These are all outliers.
The average Uber ride is about $25 according to https://finance.yahoo.com/news/average-uber-lyft-prices-then...
Facebook’s ARPU in Q3 of 2022 was $50 according to https://www.statista.com/statistics/251328/facebooks-average...
So it takes a Facebook user 6 weeks of viewing ads to generate the sad revenue equivalent to one Uber ride. Cool mock ups but this is an idea that makes less business sense than having SBF run a crypto exchange with no oversight.
An Uber ride typically costs tens of dollars. There is no ad model where you can justify paying that sort of money for random people at scale. All of the examples in the article are forms of specific niches with high ROI (e.g. targeting a user known to buy IAPs to install Candy Crush, email addresses of corporate employees to sell them expensive SaaS products, etc). These are all outliers.
The average Uber ride is about $25 according to https://finance.yahoo.com/news/average-uber-lyft-prices-then...
Facebook’s ARPU in Q3 of 2022 was $50 according to https://www.statista.com/statistics/251328/facebooks-average...
So it takes a Facebook user 6 weeks of viewing ads to generate the sad revenue equivalent to one Uber ride. Cool mock ups but this is an idea that makes less business sense than having SBF run a crypto exchange with no oversight.
> There is no ad model where you can justify paying that sort of money for random people at scale.
The ad industry wouldn't be interested in this for random impressions, but I'd be interested¹ to see how much different it would make for the average person² with full stalky personal history based ad matching enabled. They know who you are from your app profile and for the free rides the app could demand access to contacts/messages/other³.
Of course this would have great potential to cause embarrassment for some people in a taxi-sharing situation. I can see the reddit-thread-copied-by-buzzfeed-copied-by-everyone-else listicles of stories now, you'll not believe number 12!
--
[1] and not at all surprised to find someone has worked it out in detail and submitted a business plan if the numbers don't look atrocious
[2] the tech-savvy might be able to block the stalkiness, but the average person either can't or doesn't want to make the effort
[3] if not for regular rides, I can see a service offering one free ride in exchange for this access – Amazon offered me a £5 voucher in exchange for just the date of birth of my non-existent baby a while back (I'd been looking for something for a friend who is far less anti-child than I!)
The ad industry wouldn't be interested in this for random impressions, but I'd be interested¹ to see how much different it would make for the average person² with full stalky personal history based ad matching enabled. They know who you are from your app profile and for the free rides the app could demand access to contacts/messages/other³.
Of course this would have great potential to cause embarrassment for some people in a taxi-sharing situation. I can see the reddit-thread-copied-by-buzzfeed-copied-by-everyone-else listicles of stories now, you'll not believe number 12!
--
[1] and not at all surprised to find someone has worked it out in detail and submitted a business plan if the numbers don't look atrocious
[2] the tech-savvy might be able to block the stalkiness, but the average person either can't or doesn't want to make the effort
[3] if not for regular rides, I can see a service offering one free ride in exchange for this access – Amazon offered me a £5 voucher in exchange for just the date of birth of my non-existent baby a while back (I'd been looking for something for a friend who is far less anti-child than I!)
Never in my life have I been in a situation where there wasn’t an ad and thought “Gee I wish someone would show me an ad right now”
Uber doesn’t need to be dirt cheap, it just needs to be cheaper than taxis and/or a better experience. That’s what drew people to it in the first place, taxis sucked.
> Instead, my proposal would be to put the ad units on your smartphone, in the dead time while waiting for your car and when you’re on your ride.
This is even dumber than I thought. Why am I going to look at an ad on my phone? Why am I not going to close the app and look at something else?
How could it possibly be worth anything to show an ad to somebody who is so broke they will watch ads instead of paying $10 for an Uber ride?
Uber doesn’t need to be dirt cheap, it just needs to be cheaper than taxis and/or a better experience. That’s what drew people to it in the first place, taxis sucked.
> Instead, my proposal would be to put the ad units on your smartphone, in the dead time while waiting for your car and when you’re on your ride.
This is even dumber than I thought. Why am I going to look at an ad on my phone? Why am I not going to close the app and look at something else?
How could it possibly be worth anything to show an ad to somebody who is so broke they will watch ads instead of paying $10 for an Uber ride?
I think we need something like Uber pool but run as subsidized city infrastructure. Like a fleet of small bus or maybe even a full size bus without a fixed route, picking up and dropping passengers throughout the city.
I feel like there's valuable information that could help planners plan bus routes and potentially local transit train tracks but why would someone like Uber ever voluntarily share this data with planning authority?
I feel like there's valuable information that could help planners plan bus routes and potentially local transit train tracks but why would someone like Uber ever voluntarily share this data with planning authority?
> That’s right, ads. I think it can be done well
No, it can't. This is a terrible idea. After that sentence, I continued reading for a bit, for some purely morbid type of pleasure, but eventually had to close the tab.
I need less ads in my life, not more of them.
No, it can't. This is a terrible idea. After that sentence, I continued reading for a bit, for some purely morbid type of pleasure, but eventually had to close the tab.
I need less ads in my life, not more of them.
I have seen Grab’s (Grab is SEA Uber) motorbikes showing ads on mounted tablets, and their car drivers have tablets in the car that showed ads.
On top of that the app showed GrabFoods ads with “food at your end location”.
And the Grab app itself is filled with ads.
It didn’t make the rides free though.
On top of that the app showed GrabFoods ads with “food at your end location”.
And the Grab app itself is filled with ads.
It didn’t make the rides free though.
> On top of that the app showed GrabFoods ads with “food at your end location”.
I get those in France, too, with regular Uber. They try to get me to buy something or other on Uber Eats "for when I arrive". At like 2 in the morning. And no, I don't live in NY or somewhere with restaurants open 24/7.
They also have a share (or something, not sure how this works) in a bike-sharing scheme. So, I often get notifications while in the car like "oh, you could ask your driver to stop here and get a bike for the rest of your journey". Right. If I was willing to ride a bike, I'd already be on one. If I'm in your car, it's probably because it's pouring rain, or I'm too tired / drunk.
I get those in France, too, with regular Uber. They try to get me to buy something or other on Uber Eats "for when I arrive". At like 2 in the morning. And no, I don't live in NY or somewhere with restaurants open 24/7.
They also have a share (or something, not sure how this works) in a bike-sharing scheme. So, I often get notifications while in the car like "oh, you could ask your driver to stop here and get a bike for the rest of your journey". Right. If I was willing to ride a bike, I'd already be on one. If I'm in your car, it's probably because it's pouring rain, or I'm too tired / drunk.
Our family uses Grab almost every day, from getting a car ride to food delivery and to purchase items. The ads aren't that invasive on the interface anymore the more I use it.
Why would I look at my phone if it’s just playing ads?
Also I thought Uber is now getting much more expensive, not cheaper?
Also I thought Uber is now getting much more expensive, not cheaper?
The car will stop if the app doesn't detect your gaze looking at the screen.
/s but only slightly.
/s but only slightly.
Worth noting that shortly after publishing this article the author worked at Uber in a prominent growth role.
Ah, that makes sense. The article makes much more sense as a hustle exercise than an actual business idea
I've got my Uber "user rating" reduced more than once after asking a driver to switch their radio from adverts to a station with music. I only asked this after multiple adverts in a row but it seems drivers like their radio stations.
I rarely enter a taxi(-like) without my headphones.
I rarely enter a taxi(-like) without my headphones.
You would like your radiostation in your workspace yes and not have to suffer the whims of others
The relationship is not business and customer it is prisoner and prison guard - many customers will reduce a drivers rating for for the tiniest thing and in turn they do it back
Please drink a verification can.
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Maybe the next step can be: get paid to ride an Uber while blasted with ads! /s
The starbucks idea is most on the money and I can see free rides could be subsidised by destinations.
A bit like some casinos will pay for your cab to get there I am sure a shopping centre could pay $10 for an uber contingent on spending say $500 in stores and this reduces their parking demand too.
Restaurants and bars would consider it surely. Each beer is $1 off your ride home. Might discourage drink driving!
Eventually, like a Bangkok Tuktuk you will be taken to a shop for an hour to buy some emeralds and shit on the way to your actual destination!
A bit like some casinos will pay for your cab to get there I am sure a shopping centre could pay $10 for an uber contingent on spending say $500 in stores and this reduces their parking demand too.
Restaurants and bars would consider it surely. Each beer is $1 off your ride home. Might discourage drink driving!
Eventually, like a Bangkok Tuktuk you will be taken to a shop for an hour to buy some emeralds and shit on the way to your actual destination!
My last uber ride was $30. For a single ad that would be a CPM of $30k. I don't see an ad alongside an uber ride reaching that level except for very specific destinations and times.
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Interestingly, in some mock ups the ad completely covers the map—the main reason why a user would look at the screen at all whily waiting for Uber. This extremely degrades experience of using the service. This idea is the same way "creative" as to say that an ad that covers the front window of a car in full for a driver not to see the road would help driver make more money while he drives.
Just saying, what if this was an option in Uber Pool and one of the Uber Pool riders was to be an “Ad buddy” ? The “Ad buddy” gets to ride free and other riders get a discount.
For context, “Ad Buddy” is a fictional creation introduced in Netflix Maniac series. <https://www.imdb.com/title/tt5580146/>
For context, “Ad Buddy” is a fictional creation introduced in Netflix Maniac series. <https://www.imdb.com/title/tt5580146/>
This is terrible. It lacks any sort of understanding of both business and user. It also lacks imagination. In China, there's a screen on the back to the seats showing ads to passengers when they enter. I'm sure it doesn't bring in huge amounts of revenue but at least it gets more user attention, which is what ads are supposed to capture.
I'm not sure if the author is out of touch with reality but obviously adding ads on a map while in transit is a big UI/UX blunder. I use Grab everyday the ads are only in the booking (looking for a driver) phase. And free option is never possible in this kind of business.
That sounds like a wildly unprofitable concept at first, but I could envision a sort of torture chamber, where you get to stop the torture by actually paying for the service. All other things being equal, the torture may as well come in the form of ads.
The only way you're going to get a free Uber ride for looking at an ad is if there's a laser engraver in the back seat that burns it into your skin.
This feels like another attempt by Uber to win the how-can-we-spank-our-VC-money- as-quickly-as-possible competition.
I always thought the competitive advantage of Uber over traditional Taxis was that they are more convenient...
Is this a joke?
I can't believe the value of showing an ad, at scale, offsets the cost of providing the service.
This article is from 2015. Perhaps unsurprisingly, things didn’t go this way at all.
good luck
> So how would you push the prices even lower than UberPool?
By exploiting drivers harder?
But this sentence drove home the value of this article to me:
> (Special thanks to Chris Liu collaborating on these great mockups that really make the discussion in this essay pop!)
Those are not great mockups. They are Waze or Google Maps screenshots with an ad pasted onto them. If you're that addicted to hyperbole, your article should probably be taken with more than a grain of salt.