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Well, drivers are voluntarily choosing to drive for what they're getting paid. Riders are voluntarily choosing to pay the quoted price. Uber takes a cut from th
by moduspol 9y ago
Well, drivers are voluntarily choosing to drive for what they're getting paid. Riders are voluntarily choosing to pay the quoted price. Uber takes a cut from the price to run the part of the business that isn't actually driving cars.
The only way the price is subsidized is if the business couldn't be run without Uber's cut covering the non-driving parts of the business, which is unlikely. They're taking ~25% (or more) on each fare. That's a huge margin for a SaaS app and administrative work.
If Uber disappeared tomorrow, it would not be that difficult for someone to build something similarly and price it the same way. In many areas, it's already happened. That suggests the price is not unsustainable.
- emodendroket 9y agoOn the other hand, they're losing billions of dollars.
- moduspol 9y agoYep. It does cost money to expand into new geographic areas or markets (like Uber eats). That doesn't indicate that ride prices are subsidized, though.
- alonmower 9y agoAs I understood it when they enter new markets (and maybe in other cases?) they sometimes end up paying out the drivers more than the rider paid. I personally remember a handful of occasions in SF when they had absurdly low rates for some period of time (like the two dollar rides when UberPool first started) where they were definitely losing money on every ride.
- moduspol 9y agoIn those cases: Sure, they must have been losing money on those rides. As far as I know, though, the norm across the board is the 25% cut (which I understand is higher at some times).