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> Right now, Uber is subsidizing each ride How can this be true? I thought Uber takes a cut on each ride. Are you suggesting that they actually pay the driver

• wapz 10y ago
  It's based on total operating costs--not the cost of the driver only. If you include how much they have to pay for everything else (developers, management, advertising, etc), the "cut" they get from each fare is less than how much they spent in other areas. (I could be wrong so please do correct me if so but I believe this is the case here).
  • scarface74 10y ago
    Scale only helps if you have high fixed costs, the ones you mentioned, and the marginal revenue - marginal costs is large. But if your marginal profit is small, scale doesn't really help. People like to compare Uber to Amazon and how long it took Amazon to become profitable. The differences are: That Amazon was putting money into expansion and could turn a profit anytime it needed to. AWS is their most profitable division - a category with high fixed costs and high marginal profit. They are already using a lot of automation for their warehouses. It will be decades before driverless cars are ubiquitous.
• alasdair_ 10y ago
  In many markets, Uber will pay bonuses based on hitting a particular number of rides.