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> If you have costs that scale sublinearly with volume, such as software development or idle driver time, then margins really do improve with volume And if you
by imron 9y ago
> If you have costs that scale sublinearly with volume, such as software development or idle driver time, then margins really do improve with volume
And if you're subsidising rides below cost because you're trying to grow your market and you have piles of VC cash so you don't care that you're burning through money, then eventually you're going to run out of that money and will be in trouble if you can't raise any more.
Time will tell whether Uber was building a sustainable business or just burning through VC cash.
- Applejinx 9y agoUber was just burning through VC cash based on the idea that 'if you're the biggest jerk on the block in every possible sense, capital will decide you're going to be the winner because you're meaner than everybody else'. Winners don't quit, so Uber is dead to capital now: it was always based on maximum evilness and all the stuff about disrupting and ridesharing was mere window dressing. Note to capital, wherever it is: this is what you get when you go by personality rather than studying the fundamentals of a business. You can't simply pick the most toxic individual or company, claim they're going to kill everybody else, and then prop them up with valuation. The valuation didn't fail but your pet Dr. Evil did, and that was your proxy for maintaining the 'killer' behavior. Unless or until capital can be personified as evil AIs that cannot die, this was never really an optimal strategy for capital.
- linkregister 9y agoConsidering that Lyft is viewed as the "nicer" company, do you think its fundamentals are more sound? Will it reach profitability?
- rtx 9y agoHere is what Uber has built, save your car EMI's.