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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
by 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.