This is brillant. The 98-99% demand coverage sweet spot is so counterintuitive but makes total sense when you think about pricing power. I hadn't considered how oversizing destroys margins faster than it boosts utilization—thats the kind of non-linear dynamic most ppl miss. One thing tho, in practice demand spikes (events, weather) might make that last 1-2% way more valuable than the model suggests, esp for brand reputation
Excellent article. Love your theses on fleet sizing. I love that you’ve modeled specifically its Uptime. As these are new fleets, there will be a need to closely monitor how to get the fleets back in order when they go in for their maintenance.
I continue to think that Fleet sizes won’t win the near term play though they’ll win long term. I think it’s often easier to maximize the fleet success in one market before expanding too much
This is brillant. The 98-99% demand coverage sweet spot is so counterintuitive but makes total sense when you think about pricing power. I hadn't considered how oversizing destroys margins faster than it boosts utilization—thats the kind of non-linear dynamic most ppl miss. One thing tho, in practice demand spikes (events, weather) might make that last 1-2% way more valuable than the model suggests, esp for brand reputation
Excellent article. Love your theses on fleet sizing. I love that you’ve modeled specifically its Uptime. As these are new fleets, there will be a need to closely monitor how to get the fleets back in order when they go in for their maintenance.
I continue to think that Fleet sizes won’t win the near term play though they’ll win long term. I think it’s often easier to maximize the fleet success in one market before expanding too much
Does this make you feel better or worse about UBER?
In what way? This is not a critique of Uber. In fact I think Uber becomes more successful as AVs grow, not less