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> They are burning through VC money by subsidizing the cost of each ride I've never understood that. How are they subsidizing it? They take over 25% of what th
by Fogest 7y ago
> They are burning through VC money by subsidizing the cost of each ride
I've never understood that. How are they subsidizing it? They take over 25% of what the customer pays and all they have to do is run the app. Whether they charge $10 or $15 for the same ride the cost to them is the same. It doesn't make sense, they don't have any extra cost by making a ride cheaper.
- overcast 7y agoBecause the cost of a cab ride is not $6 to drive entirely cross town. It just isn't. Uber is popular because it's cheap as shit. If SuperRide came out, and it was half the price of Uber, no one would ever use Uber again.
- Fogest 7y agoBut that doesn't mean Uber is losing money by offering it less. It costs the driver more to drive farther for less, Uber doesn't have a higher expense for a longer ride.
- overcast 7y ago"Investor reports reveal riders only pay 41 percent of the full cost of each ride, with investors footing the remaining 59 percent." I hope this explains it more clearly. https://www.vice.com/en_us/article/9a3vye/uber-true-cost-uh-oh https://www.vice.com/en_us/article/9a3vye/uber-true-cost-uh-...
- Fogest 7y agoStill doesn't really explain it. A taxi ride is not 59% more expensive than an Uber, yet a taxi driver is getting paid a better wage. So Uber is definitely burning more money in other areas not related to the ride itself. In Canada now the cost of an Uber when they tack on their safety fee and booking fee is pretty much on pare with what a taxi company charges for the same ride. And now taxi companies where I am from have their own apps just like Uber to request a taxi and get an upfront fee. So now I can easily compare the two costs and see that a taxi is usually the same fee or a $1 or $2 more.
- rightbyte 7y agoTaxi companies are better at scaling than Uber. They can do bulk vehicle procurements and sign service deals. It is no wonder they can pay wages and not be that much more expensive.
- Fogest 7y agoSorry maybe I am failing to understand a concept here but Uber does not even have to worry about vehicle costs at all, not to mention no expensive overpriced taxi medallion.
- malandrew 7y agoDecember 2016. Are you really going to base your position on data that out of date when things were far more opaque? How about using the S-1 or quarterly filings instead.
- olyjohn 7y agoIs it really cheap as shit? I've taken cabs and Ubers around Seattle and never found that one is particularly more expensive.
- deleted 7y ago[deleted]
- traek 7y agoFor some rides (especially Pool rides, in aggregate) Uber charges the passengers less than what they pay to the drivers. Uber also pays driver incentives beyond fares (e.g. for completing a certain number of rides).
- Fogest 7y agoI am aware they pay the drivers incentives, but I am not sure I agree about the Pool rides, do you have a source for that? There are plenty of sources out there which speak about how drivers dislike Pool rides and often turn them off or reject them because they make less money off them versus a normal fare. So I am not sure I believe that Uber gives the rider more, in fact I feel like Uber makes more because now they are collecting a percentage off every rider in the pool whereas the driver is paid a set amount