4 ms·

I read the whole article and it was very interesting. Thanks for the info! However, could someone explain to me why Uber is losing money from their taxi service

I read the whole article and it was very interesting. Thanks for the info! However, could someone explain to me why Uber is losing money from their taxi services? Obviously the drivers take home a large chunk of revenue, but what about the rest of the money they receive from the fares? Shouldn't that be enough to cover the overhead of running a mobile app? Are they trying to do too much? What gives?

clay_to_n 10y ago
Everything else they're invested in. Subsidizing rides (in new markets I think they sometimes pay the drivers more than the passenger pays) maybe. But new R&D, lik building self-driving cars, doesn't come cheap.
- martinald 10y ago
  I think people are really underestimating how generous these subsidies are. They're not usually on the riders side, but the drivers. In Edinburgh, Scotland over NYE all Uber drives were on £75/hr minimum, regardless of how many rides they took. A friend of a friend who decided to ride for them that night said he was out for about 7 hours and picked up about 10 people the whole night (was very busy after midnight but quiet otherwise). The fares totalled about £150. So Uber probably got £30 but subsidised the driver by £525. Pretty crazy if you times this by all the 'newer' markets uber is in.
seansmccullough 10y ago
The drivers are being paid more per ride than riders are paying for a ride. Let's say an Uber ride costs a passenger $10, and the driver is paid $15. Uber loses $5.
- aianus 10y ago
  This is not true in Toronto where I am a part time Uber driver. I've never received any sort of incentive or bonus. Uber is still extremely popular with both drivers and passengers. Note, this may be because Uber has no competition here and is already 50% cheaper than taxis. However it still illustrates that Uber can certainly operate with positive profit margins.

clay_to_n 10y ago

Everything else they're invested in. Subsidizing rides (in new markets I think they sometimes pay the drivers more than the passenger pays) maybe. But new R&D, lik building self-driving cars, doesn't come cheap.

martinald 10y ago
I think people are really underestimating how generous these subsidies are. They're not usually on the riders side, but the drivers. In Edinburgh, Scotland over NYE all Uber drives were on £75/hr minimum, regardless of how many rides they took. A friend of a friend who decided to ride for them that night said he was out for about 7 hours and picked up about 10 people the whole night (was very busy after midnight but quiet otherwise). The fares totalled about £150. So Uber probably got £30 but subsidised the driver by £525. Pretty crazy if you times this by all the 'newer' markets uber is in.

seansmccullough 10y ago

The drivers are being paid more per ride than riders are paying for a ride. Let's say an Uber ride costs a passenger $10, and the driver is paid $15. Uber loses $5.

aianus 10y ago
This is not true in Toronto where I am a part time Uber driver. I've never received any sort of incentive or bonus. Uber is still extremely popular with both drivers and passengers. Note, this may be because Uber has no competition here and is already 50% cheaper than taxis. However it still illustrates that Uber can certainly operate with positive profit margins.