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>but only by massively subsidizing its rides through investment capital This is not true for many cities. Most of the subsidizing only happens in new markets t

• jedrek 9y ago
  The subsidizing happens to find drivers and passengers. When Uber came to my city, it was months before I paid for a ride, and drivers told us all about how they were getting cash bonuses for working high traffic times. No matter how optimistic you are about the product, Uber isn't worth a fraction of its valuation without the constant expansion, and the constant expansion is impossible without very inexpensive money that is VC.
• ExactoKnight 9y ago
  The cheaper price comes almost entirely from the driver making less. Love it or hate it, that's really the big difference now that most existing cab companies now have Uber-like dispatch technology.
  • thephyber 9y ago
    Some taxi companies buy new cars, which adds overhead, but largely I think the Uber/Lyft driver model doesn't work for a full-time wage. It's great supplemental income for some. From hearing many interviews with Uber drivers, I've gathered that most are happy about the opportunity and possibilities in the beginning but then realize within a year that it's a meager living (less than minimum wage). They also notice that their profit margins can easily be eaten away by Uber's rev share changes or when Uber tests the price elasticity of a market. Anecdotally, Uber drivers don't last more than about 2 years. My father is a sole proprietor limo driver who has occasionally tried driving for Uber.
  • pathseeker 9y ago
    Sure, but that's not a subsidy anymore. They've just found a way to provide a service for cheaper.