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I don't understand why uber's costs don't scale well. They make an app that drivers use. They're not having to buy cars or hire drivers to grow. They just need
by mevile 7y ago
I don't understand why uber's costs don't scale well. They make an app that drivers use. They're not having to buy cars or hire drivers to grow. They just need their app to function. What is all their money going towards?
Is all that money lost just subsidizing the cost of the ride? If they stop subsidizing the drive price, which they will have to at some point I imagine, will people just abandon the service?
- adjkant 7y agoThere's two ways it goes: squeeze drivers or squeeze riders. The ironic part of their position is as it makes a market on both sides, squeezing either will result in a loss of riders/drivers to alternatives. This writing has been on the wall for ages, but people keep looking past it. Uber I think somewhat internally knows this, and have thus tried either moonshots or diversifying. Uber Eats actually looks to be profitable since you take driver surplus and turn it into profits, simplifying a bit. Self driving moonshots are just that - moonshots. You can already see the effects of them squeezing drivers with recent strikes and issues including a possible 600M+ arbitration costs from drivers.