3 ms·
The argument is that they are turning a profit on the average ride in mature markets, and losing money on the average ride in emerging ones. Right now, because
by mseebach 9y ago
The argument is that they are turning a profit on the average ride in mature markets, and losing money on the average ride in emerging ones. Right now, because they are trying to grow quickly, they have a lot more emerging market rides than mature market rides, and so the average across all rides looks pretty bad.
This is perfectly common for companies starting up business in new markets. The trick is to turn emerging markets into mature ones.
If indeed Uber is losing money on their local operations plus non-growth overhead, then it's bad. But we don't have those numbers.
- Retric 9y agoUber is 8 years old and still losing money on the US market. I have no problem saying they could eventually break even by adding ~2$ a ride in the US. But, that's only enough to be a multi million dollar company to be a multi billion dollar company they need to raise the price 5+$ in the US and the rest of the world without losing ridership. Now, increasing prices reduces demand... So, to be a 50 billion dollar company they would need to keep a huge ridership while charging ~twice as much on average. Or charge ~5+$ more per ride while becoming a monopoly. QED: They have zero paths to maintain their current valuation let alone growth to offset the risk of failure.