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Uber is literally having the same business model of subsidizing rides, which loses them a lot of money. This is not even tied to simply being competitive with L
by scient 7y ago
Uber is literally having the same business model of subsidizing rides, which loses them a lot of money. This is not even tied to simply being competitive with Lyft - its also to incentivize users to choose them over taxis. You really thing that upping their prices is going to a simple decision and people will just keep using them because of what? Just out of habit?
- OnlineGladiator 7y agoI've never understood why anyone who applied a bit of critical thinking ever thought Uber or Lyft would be profitable. It's been over 10 years and they're still hemorrhaging billions of dollars, but clearly wild profits are just around the corner. If you want to know what business model to look at to see how Uber and Lyft will end up, look at the airline industry. Paper thin margins (and that's assuming they're profitable at all), required a government bailout, one of the few industries consistently declining in a historical market surge - many of the airline companies will go bankrupt again when there's even a whiff of a recession. If the unit economics don't make sense, then you just lose more money by scaling. And that's exactly what Uber and Lyft are doing - they are literally losing billions of dollars every year. They aren't building infrastructure. They aren't building a brand anymore (their brands are diminishing over time instead of strengthening). They're just sucking what money they can out of their failing business model as the ship slowly sinks.
- georgeplusplus 7y agoI already addressed why your argument doesn’t hold up and why Uber must subsidize rides. It’s literally what my entire post is about.