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If you're losing money on every ride, then your aggregate profit on all rides will be in the negatives. More volume just makes the total loss bigger, because th

If you're losing money on every ride, then your aggregate profit on all rides will be in the negatives. More volume just makes the total loss bigger, because that's more money you've been giving away.

foldr 9y ago
That's the point, it's an ironic phrase.
imron 9y ago
> More volume just makes the total loss bigger, because that's more money you've been giving away. Yup, that sounds about right.
mrisoli 9y ago
But are they losing money on every ride? I thought the whole point of subsidizing rides was(as OP comments pointed out) to raise demand, both for drivers and riders, they first entice both ways with the promise of lower rates and higher payoffs, then slowly increase their cut of the pie against the driver's payoff and increase the rates on riders. I'm not saying this will ever offset their increasing losses, but that is what always seemed the long term goal of monopoly.
- DanielLawhon 9y ago
  Yes. > I thought the whole point of subsidizing rides was(as OP comments pointed out) to raise demand, both for drivers and riders, they first entice both ways with the promise of lower rates and higher payoffs, then slowly increase their cut of the pie against the driver's payoff and increase the rates on riders. Right, and by the logic that decreasing prices raises demand, increasing prices will decrease demand. That's my point, and the point of critics that are often ignored. Their customers will bail the moment they start getting charged the $25 their $10 ride actually costs. And that increase will be to break even. Not make any money. Just break even. Uber will never achieve a monopoly. There are buses, bicycles, and used cars for $1500. People aren't going to pay $600 per month on a ride hailing service. I've already ditched Uber, and so have many of my peers, in favor of alternatives that save money. And that's without significant price hikes yet. The fundamental economics of having a private driver have not changed. An app doesn't change what it costs to pay someone to drive you everywhere. I hate being critical because it's often a waste of time, but Uber is sincerely one of the worst investments that Silicon Valley has ever produced.

foldr 9y ago

That's the point, it's an ironic phrase.

imron 9y ago

> More volume just makes the total loss bigger, because that's more money you've been giving away. Yup, that sounds about right.

mrisoli 9y ago

But are they losing money on every ride? I thought the whole point of subsidizing rides was(as OP comments pointed out) to raise demand, both for drivers and riders, they first entice both ways with the promise of lower rates and higher payoffs, then slowly increase their cut of the pie against the driver's payoff and increase the rates on riders. I'm not saying this will ever offset their increasing losses, but that is what always seemed the long term goal of monopoly.

DanielLawhon 9y ago
Yes. > I thought the whole point of subsidizing rides was(as OP comments pointed out) to raise demand, both for drivers and riders, they first entice both ways with the promise of lower rates and higher payoffs, then slowly increase their cut of the pie against the driver's payoff and increase the rates on riders. Right, and by the logic that decreasing prices raises demand, increasing prices will decrease demand. That's my point, and the point of critics that are often ignored. Their customers will bail the moment they start getting charged the $25 their $10 ride actually costs. And that increase will be to break even. Not make any money. Just break even. Uber will never achieve a monopoly. There are buses, bicycles, and used cars for $1500. People aren't going to pay $600 per month on a ride hailing service. I've already ditched Uber, and so have many of my peers, in favor of alternatives that save money. And that's without significant price hikes yet. The fundamental economics of having a private driver have not changed. An app doesn't change what it costs to pay someone to drive you everywhere. I hate being critical because it's often a waste of time, but Uber is sincerely one of the worst investments that Silicon Valley has ever produced.