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0 pointsicebraining12y ago0 comments

Each Uber user benefits when there are more Uber drivers. They can get rides faster and more conveniently. Each Uber driver benefits when there are more Uber users. They can get clients faster and closer to their current position and thus make more money with less downtime. These are the network effects.

As nickpinkston said, those are economies of scale, which is a related concept, but not the same.

A consumer can use two social networks as well.

Yes, but this is where the difference highlighted above kicks in: in a social network, the total number of users is not as relevant as the number of connections the user has, so the user can be "stuck" even if he feels the product is not good enough. In a product like Uber, there's no such effect; people can switch as soon as they feel like trying the alternatives.

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hueving12y ago

>As nickpinkston said, those are economies of scale, which is a related concept, but not the same.

This is still network effects, just with two different parts. The drivers benefit when there are more users, and the users benefit when there are more drivers. It falls clearly into the definition of network externalities when you take the drivers into account.

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hueving12y ago

>As nickpinkston said, those are economies of scale, which is a related concept, but not the same.

j / k navigate · click thread line to collapse