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You keep ignoring my points about unit economics. Yea they lose money because they invest in engineering and marketing. Neither of those are required to fulfill

You keep ignoring my points about unit economics. Yea they lose money because they invest in engineering and marketing. Neither of those are required to fulfill a ride, and neither of those are fundamental reasons why a traditional taxi cab company can do a ride cheaper than an Uber or Lyft—because they cannot. They are competing against not Uber the cash burning company but Uber the software and automations. Uber’s engineering spend has nothing to do with the costs of fulfilling a ride as it’s mostly an investment into future efficiencies/features.

scarface74 4y ago
Uber has been around for 13 years. They aren’t a new company. Uber has higher fixed cost and has the same high marginal costs that taxi companies have. That’s not a tech company. They aren’t spending the money as investment, they are subsidizing rides. They aren’t building a moat. Have any of their investments paid off? If you look at any of the well known profitable tech companies, it didn’t take them 13 years and billions in losses to get there. Even Amazon had better margins than Uber when they were losing money because they were building out assets.
- chrischen 4y ago
  Amazon is actually a great example of a company that looks like it was bleeding money or mot making any. Because the software scales and each additional online customer costs nothing to support in terms of engineering spend, and they were aggressively reinvesting in product and engineering that made it look like they were unprofitable when really they almost had a monopoly. Arguing that Uber is not profitable because it's been 13 years is not a valid argument. They could spend and invest more than they make indefinitely if they wanted to, and it wouldn't affect their unit economics or their potential profitability. Yes, their investment in Uber eats paid off enormously. They were subsidizing Uber Pool rides because there is still an enormous market that supports multiple big ride sharing companies (Lyft, Uber, Didi, Grab, etc) and because they could afford to spend in marketing and subsidization. Once the heat turns down they may subsidize less, maybe even wind down engineering / product development spend, and they'd have a fundamental product that has better unit economics than a traditional taxi cab company... because again, as I have pointed out repeatedly, their engineering staff is not required to support the operation of their ride service.

scarface74 4y ago

Uber has been around for 13 years. They aren’t a new company. Uber has higher fixed cost and has the same high marginal costs that taxi companies have. That’s not a tech company. They aren’t spending the money as investment, they are subsidizing rides. They aren’t building a moat. Have any of their investments paid off? If you look at any of the well known profitable tech companies, it didn’t take them 13 years and billions in losses to get there. Even Amazon had better margins than Uber when they were losing money because they were building out assets.

chrischen 4y ago
Amazon is actually a great example of a company that looks like it was bleeding money or mot making any. Because the software scales and each additional online customer costs nothing to support in terms of engineering spend, and they were aggressively reinvesting in product and engineering that made it look like they were unprofitable when really they almost had a monopoly. Arguing that Uber is not profitable because it's been 13 years is not a valid argument. They could spend and invest more than they make indefinitely if they wanted to, and it wouldn't affect their unit economics or their potential profitability. Yes, their investment in Uber eats paid off enormously. They were subsidizing Uber Pool rides because there is still an enormous market that supports multiple big ride sharing companies (Lyft, Uber, Didi, Grab, etc) and because they could afford to spend in marketing and subsidization. Once the heat turns down they may subsidize less, maybe even wind down engineering / product development spend, and they'd have a fundamental product that has better unit economics than a traditional taxi cab company... because again, as I have pointed out repeatedly, their engineering staff is not required to support the operation of their ride service.