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> then specifically what I'm referring to is operating with such low prices that rides are money-losers This is meaningless semantics. The business is growing

> then specifically what I'm referring to is operating with such low prices that rides are money-losers This is meaningless semantics. The business is growing and spending money to expand. That does not mean each ride is not priced profitably, or that each ride does not bring in more money than is spent providing that ride. It's just a more convoluted way of saying the business--at a high level--sells rides and is not turning a profit. They are priced at a rate that entirely covers the driving after a 25% cut. For it to not be sustainable, it'd have to be not possible to run the rest of the business on that cut, which is difficult to imagine. Your whole argument hinges on not understanding these concepts.

emodendroket 9y ago
I am capable of appreciating that such a circumstance is possible, but what I have read leads me to believe that's not what's happening, and instead Uber is charging prices that do not cover their costs, with the hope of achieving monopoly. Earlier series on the subject: https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive... > By contrast, in the hundred years since the first motorized taxi, there has been no evidence of significant scale economies in the urban car service industry. That explains why successful operators never expanded to other cities and why there was no natural tendency towards concentration in individual markets. Drivers, vehicles and fuel account for 85% of urban car service costs. None of these costs decline significantly as companies grow. As the P&L data above demonstrates, Uber has not discovered a magical new way to drive down unit costs.
- emodendroket 9y ago
  Also the idea of money-losing customers is not exactly unfamiliar in tech companies in the first place. Surely people on HN are familiar with this.
- abcdef1 9y ago
  kjhn

emodendroket 9y ago

I am capable of appreciating that such a circumstance is possible, but what I have read leads me to believe that's not what's happening, and instead Uber is charging prices that do not cover their costs, with the hope of achieving monopoly. Earlier series on the subject: https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive... > By contrast, in the hundred years since the first motorized taxi, there has been no evidence of significant scale economies in the urban car service industry. That explains why successful operators never expanded to other cities and why there was no natural tendency towards concentration in individual markets. Drivers, vehicles and fuel account for 85% of urban car service costs. None of these costs decline significantly as companies grow. As the P&L data above demonstrates, Uber has not discovered a magical new way to drive down unit costs.

emodendroket 9y ago
Also the idea of money-losing customers is not exactly unfamiliar in tech companies in the first place. Surely people on HN are familiar with this.
abcdef1 9y ago
kjhn