4 ms·

I have the understanding that they actually lose ~$1 per ride.

• SilasX 7y ago
  That figure comes from taking total losses and dividing by the number of rides. It's not the same as saying that the costs of providing the ride itself are $1 more than they charge for the ride. (The fixed vs variable distinction I was making above.) Uber's costs of providing a specific ride are: Driver's cut, maps licensing, cloud charges, data transfer. That is rarely more than the cost of the ride. Remember, Lyft took flack for the outrageously high 14 cents a ride in cloud costs.
  • guntars 7y ago
    You’re forgetting the cost to develop the software itself. It’s like saying a gigabyte of data on a wireless carrier cost them pennies in electricity and bandwidth.
    • bmm6o 7y ago
      It's still not a per-ride cost.
    • SilasX 7y ago
      >You’re forgetting the cost to develop the software itself No, I'm (correctly) excluding it from the list of things they have to pay for to provide one more ride. >It’s like saying a gigabyte of data on a wireless carrier cost them pennies in electricity and bandwidth. It's more like: Verizon is unprofitable. People keep repeating the claim that, "lol, Verizon mobile actually loses money for every byte of data they transmit to you." I reply that, "No, Verizon loses money in the aggregate. The cost of sending one more byte of data, on average, is less than they charge for it, but not by enough to cover their fixed costs."
      • guntars 7y ago
        I understand how "cost to provide one more ride works", I'm just saying that it's a bit of an accounting fiction and has little to do with whether they can or cannot be profitable. It also confuses people into thinking that running a telecom is just pure profit and that they're getting ripped off. That's why I used that example.