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They’ve never been profitable. You can’t stay profitable when your entire unit economics is messed up.
by kasey_junk 6y ago
They’ve never been profitable. You can’t stay profitable when your entire unit economics is messed up.
- zhdc1 6y agoTheir unit economics are fine. They have a gross margin of 6-7% after taking out attributable operating costs (so, IT + customer support + insurance + w/e). Unless if I'm looking at the wrong numbers, they're literally killing themselves on sales, marketing, and driver incentives. It's "stupid" that's killing them, not the dynamics of the ride share market.
- kasey_junk 6y agoWithout driver incentives they lose the drivers. Upping prices to compensate the drivers correctly and they lose the customers. They are locked into a classic problem for 2 sided markets with low barriers to entry.