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> they are definitely paying a price for expansion. Of course, that's the whole reason to raise capital (so you can expand rapidly on a model which has attract
by morgante 11y ago
> they are definitely paying a price for expansion.
Of course, that's the whole reason to raise capital (so you can expand rapidly on a model which has attractive unit economics).
The point is that we don't have to speculate about what will happen once Uber raises prices. Just look at their mature markets, where pricing is on par with taxis, and you can see a profitable model.
- krrrh 11y agoI think that the profitability in mature markets has a lot to do with how sane existing taxi regulations are. Even with the subsidized prices in Berlin, taxis there are so plentiful and relatively affordable that aside from heavily subsidized rides Uber didn't have a huge edge over the taxi+mytaxi combo. It was never really faster to get a car via Uber than with MyTaxi, or more often than not, just walking to the street and waiting 1-2 minutes. They've never had close to the same participation from Taxi drivers as MyTaxi and others have had. Incidentally, most Berlin Taxis are independent and pay only a small fee to get licensed. They must carry commercial insurance, but almost no one thinks that is unreasonable. It's ironic because if the cities where Uber is madly profitable actually responded to their criticisms and reformed their protectionist taxi regulations, Uber would lose much of their pricing edge to competition.