Eli5: I saw that Uber is still not making money, how is that possible, they have a lot of people working for them, worldwide known and also if they dont make any money how are they still alive?

Question

Eli5: I saw that Uber is still not making money, how is that possible, they have a lot of people working for them, worldwide known and also if they dont make any money how are they still alive?

In: Economics

Answer 1

There’s also accounting gimics going on. If they show a profit, they have to pay taxes on it. If they allocate expenses correctly they have the same money, but no tax burden. They arent going to make themselves profitable until theyre ready to be profitable.