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They are subsidizing the fares, for one thing. Every ride costs them a few dollars of loss.
by NotSammyHagar 7y ago
They are subsidizing the fares, for one thing. Every ride costs them a few dollars of loss.
- csomar 7y agoWhat do you mean by their margin is 25% if they are subsidizing the fares?
- bostik 7y agoAs far as I understand, this can be distilled down to: 1: Uber is charging 25% commission for the use of their platform 2: Uber is still losing money Which means that in order for them to break even they would need to charge a higher commission at the existing fare rates, or bump the fares to a level where their commission covered their costs. Well... There's always the third option too: cut their own cost base significantly. Each of those options carries an economic impact and knock-on effects.