Earlier this week I wrote a post called: The pull from services to products. And in it I made mention of the fact that part of what’s driving this pull towards products is that the marginal cost of servicing additional users or customers is almost nothing in a world of internet services and products.

Well the reality is that this phenomenon is driving a hell of a lot more. It could – and probably will – fundamentally change almost all aspects of the economy.

I know that sounds like a pretty audacious statement, but if you watch the following 10 minute talk by Albert Wenger (Union Square Ventures) you might start to feel the same way. He outlines 5 changes being driven by the fact that in the digital world, marginal cost = 0. The impacts go well beyond tech, capturing sectors such as transportation and industrial real estate.

[youtube https://www.youtube.com/watch?v=sVEtTzlqsoE?rel=0]

If you can’t see the video, click here.

This morning I woke up to a post from venture capitalist Fred Wilson talking about the cost of loyalty when it comes to local transportation markets. More simply, it was a cost comparison between regular city taxis and ride sharing services such as a UberX, Lyft, and Sidecar in San Francisco, Los Angeles, and New York.

The data was sourced from whatsthefare.com and looks like this:

The way to understand this chart is to think about it as the answer to this question (from whatsthefare.com): If I were to take 1,000 rides over my lifetime with one individual service, how much more would I pay than if I compared prices and always picked the cheapest option?

What you should immediately see is that regular taxis are far more expensive in San Francisco and Los Angeles compared to all of the ride sharing services. In the words of Fred Wilson: “That is crazy. They are going to go out of business in those markets with that pricing.”

Earlier this week I wrote a post called: The pull from services to products. And in it I made mention of the fact that part of what’s driving this pull towards products is that the marginal cost of servicing additional users or customers is almost nothing in a world of internet services and products.

Well the reality is that this phenomenon is driving a hell of a lot more. It could – and probably will – fundamentally change almost all aspects of the economy.

I know that sounds like a pretty audacious statement, but if you watch the following 10 minute talk by Albert Wenger (Union Square Ventures) you might start to feel the same way. He outlines 5 changes being driven by the fact that in the digital world, marginal cost = 0. The impacts go well beyond tech, capturing sectors such as transportation and industrial real estate.

[youtube https://www.youtube.com/watch?v=sVEtTzlqsoE?rel=0]

If you can’t see the video, click here.

This morning I woke up to a post from venture capitalist Fred Wilson talking about the cost of loyalty when it comes to local transportation markets. More simply, it was a cost comparison between regular city taxis and ride sharing services such as a UberX, Lyft, and Sidecar in San Francisco, Los Angeles, and New York.

The data was sourced from whatsthefare.com and looks like this:

The way to understand this chart is to think about it as the answer to this question (from whatsthefare.com): If I were to take 1,000 rides over my lifetime with one individual service, how much more would I pay than if I compared prices and always picked the cheapest option?

What you should immediately see is that regular taxis are far more expensive in San Francisco and Los Angeles compared to all of the ride sharing services. In the words of Fred Wilson: “That is crazy. They are going to go out of business in those markets with that pricing.”