(I hope this comment is useful. Perhaps I am just confused by the article). Interesting article. The article emphasizes that the $2B loss that Uber runs is eff

(I hope this comment is useful. Perhaps I am just confused by the article). Interesting article. The article emphasizes that the $2B loss that Uber runs is effectively a subsidy for riders. But that isn’t necessarily necessarily 100% true. If Uber loses $2B/yr because it pours $2B in a hole and sets in on fire, that isn’t a subsidy to riders. If that’s the case, then Uber can stop losing money simply by stopping doing that. What percentage of the $2B is spent on growth (minus subsidy to ride cost; e.g., advertising) which can be shut off eventually? What percentage is spent on software, which is a fixed cost and actually infinitely scalable? What percentage of engineering headcount can be laid off/replaced with cheaper people as the service approaches feature completion? Uber spends about $2.1B in sales and operating expenses. I don’t know what the breakdown is inside these. But if it can turn off some of those expenses as growth slows, and if others are fixed as it grows, then is there no hope? The article doesn’t give Uber enough credit for offering a definitely superior product, IMHO. Uber doesn’t necessarily need to be price competitive with previously existing companies, which were garbage. The accountability of Uber drivers, the ability to call a car to a specific location within minutes, these are things that, when I lived in Chicago, simply did not exist at all. That said, there’s a limit to how much Uber can charge extra. If it needs to charge double the prices of previously existing competitors, then the extra service isn’t worth it, and Uber wouldn’t be worth anything. I don’t understand how Uber could possibly need to charge that much more than existing companies. Yes, it misses out on the “fleet effect;” but if the largest cost goes to driver compensation, the economy of running a fleet is maybe a small percentage of overall costs. Yes, Uber needs to build and maintain software; but that ought to be a fixed cost (and mostly in initial years!). I guess it comes down to this: I don’t understand the contention that Uber has no meaningful scale economies (the software, right?) or how it could be possible that Uber’s model needs to cost significantly more than pre-existing competitors. Since I can’t see inside of what Uber spends its revenue on, I don’t know how much it would need to raise its current prices. But if Uber costs, say, 10% more than pre-existing taxi companies, I would still expect to be worth >>$0. I can’t speak to $70B. (Also, I offer no opinion on long-term defensibility of Uber's business to new entrants).