4 ms·

I am sorry, but I don-t understand why they lose so much money. They take 30 % of all trips, they don-t have cars, they don-t pay salaries to drivers. Is it the

I am sorry, but I don-t understand why they lose so much money. They take 30 % of all trips, they don-t have cars, they don-t pay salaries to drivers. Is it the infrastructure so expensive?

blowski 9y ago
They have a lot of expensive developers, lawyers and marketing deals.
calgaryeng 9y ago
Marketing and ride subsidies?
Tiktaalik 9y ago
They subsidize rides (in many jurisdictions) so presumably they're not making much money on that 30% cut.
ErikVandeWater 9y ago
Probably most of there losses are explained by markets they are trying to develop and also expansion into areas where they do not yet have drivers. I can't imagine the cost would increase too much going forward - it's essentially the same as the cost of delivering pizza, and pizza isn't too expensive, and riders can pool, so it should be below the cost of pizza to deliver a person. And once people start giving up cars for Ubering, pooling will become much more efficient.
potatolicious 9y ago
In many markets they pay drivers more than they make on each ride - significantly more. It happens in various forms, but I suspect minimum-payout subsidies are one of the main causes. In many cities Uber is trying to shorten wait times (so there's a car very close to you always), and the only way to do this is to flood the streets with drivers. Flooding the streets with drivers lowers each driver's earning ability, since there are now more drivers competing for the same number of passengers. To make sure drivers don't quit, Uber has been in the habit of guaranteeing payouts - if you work this area during a particular time period, they guarantee you a minimum level of earnings, paying you the difference if there aren't enough passengers. This is a big part of how they lose money - in order to maintain a system where a car is always nearby, they need to pay drivers a lot more than they make from the passengers.

I am sorry, but I don-t understand why they lose so much money. They take 30 % of all trips, they don-t have cars, they don-t pay salaries to drivers. Is it the infrastructure so expensive?

blowski 9y ago

They have a lot of expensive developers, lawyers and marketing deals.

calgaryeng 9y ago

Marketing and ride subsidies?

Tiktaalik 9y ago

They subsidize rides (in many jurisdictions) so presumably they're not making much money on that 30% cut.

ErikVandeWater 9y ago

Probably most of there losses are explained by markets they are trying to develop and also expansion into areas where they do not yet have drivers. I can't imagine the cost would increase too much going forward - it's essentially the same as the cost of delivering pizza, and pizza isn't too expensive, and riders can pool, so it should be below the cost of pizza to deliver a person. And once people start giving up cars for Ubering, pooling will become much more efficient.

potatolicious 9y ago

In many markets they pay drivers more than they make on each ride - significantly more. It happens in various forms, but I suspect minimum-payout subsidies are one of the main causes. In many cities Uber is trying to shorten wait times (so there's a car very close to you always), and the only way to do this is to flood the streets with drivers. Flooding the streets with drivers lowers each driver's earning ability, since there are now more drivers competing for the same number of passengers. To make sure drivers don't quit, Uber has been in the habit of guaranteeing payouts - if you work this area during a particular time period, they guarantee you a minimum level of earnings, paying you the difference if there aren't enough passengers. This is a big part of how they lose money - in order to maintain a system where a car is always nearby, they need to pay drivers a lot more than they make from the passengers.