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Because of unrelated, ride-count-independent costs. For example, massively unprofitable self-driving car and food delivery businesses. Those reasons have nothi
by SilasX 7y ago
Because of unrelated, ride-count-independent costs. For example, massively unprofitable self-driving car and food delivery businesses.
Those reasons have nothing to do with Uber being unable to charge more for the rides than the cost to provide, which is not true and a widely held misconception.
An investor should care about "can they make money selling rides". That business unit can always be broken off from orthogonal ventures.
- wpietri 7y agoDepends on who you think of as paying the costs. One of Uber's "innovations" is to get the key capex, cars, off their balance sheet. Along, of course, with major opex contributors like repairs. Instead, those burdens now fall on individual drivers. It's really not clear to me if Uber would be truly profitable if they had to pay a reasonable wage plus the actual costs. So instead the question becomes how long they can keep exploiting workers like this. AB5 suggests that the answer is not "forever".
- xmprt 7y agoI've yet to hear a good argument for how they're exploiting workers. Tons of companies are always hiring yet people chose to work for Uber. Most people hate their job and wish they were paid more but Uber is the only company that will welcome you back with open arms if you don't show up for a month without notice.
- deleted 7y ago[deleted]
- wpietri 7y agoI would suggest Google. There's a ton of discussion around California's AB5 that explains the issues.
- jon-wood 7y agoI have many issues with Uber, but at least in the UK the argument that they’re pushing costs of fuel/repairs on to the drivers isn’t really a valid one. Most taxi drivers in the UK are self-employed, and pay a fee to one of the local cab companies in return for jobs getting pushed out to them, and they’re responsible for all the associated costs of running a taxi and remaining licensed to do so.
- wpietri 7y agoSo who buys and repairs the cabs? In the US, it's mostly the cab companies. Drivers just have to pay a fixed night's rental, plus fuel. If,say, the transmission fails, the driver just swaps to a different cab; it's the cab company that's on the hook for the thousands in repairs.
- jon-wood 7y agoTypically the driver does. I’m sure there are a few can firms running there own fleets and leasing them out, but in most cases it’s the driver who has responsibility for everything, right down to paying for the meter to be checked once a year.