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Because Uber is outcompeting them on VC subsidies. The point of the parent is: How does Uber turn all these subsidies into an actual profit someday? It's easy
by ianferrel 10y ago
Because Uber is outcompeting them on VC subsidies.
The point of the parent is: How does Uber turn all these subsidies into an actual profit someday? It's easy to undersell your competitors when you're burning money. Once the VC dries up, how does Uber compete with any other entrant?
- serge2k 10y agoIf Uber grows to a point where they can set their prices to get a reasonable profit margin. If their competitors can't really undercut and make money then they have to rely on VCs who are willing to burn cash to help a competitor grow. But why a VC do that? `
- llamataboot 10y agoTrue sometimes, not at all other times. Or else we would all still be using Friendster. I agree in this case there are significant barriers to entry and that once Uber captures the market they will likely have it all the way through to self-driving taxis (10 years?), but there's some VCs out there that like to fund the underdog under hopes that it can leapfrog and then got the overpour of an already existing market that has learned that a technology exists (whether that be the technology of logging on and seeing what all your friends did today or the expectation that you could press a button on your phone and have a driver show up at your door in 5 minutes)