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
Uber ran at a significant loss using investors money to “disrupt” the taxi market with the idea being they’d edge out all their competitors while having low overheads by not actually owning any cars or having any employees themselves.
They succeeded in disrupting the market but their overheads are higher than they’d predicted and regulators all over the world have made them responsible for things they’d wanted to avoid such as treating drivers as employees.
Now they’re at the point where they can’t just burn investors cash anymore they had to increase their prices. But now that Uber doesn’t have the cheapest option and the service has gotten less reliable as their competitors have launched apps, allowed card payments etc they’re struggling to find the right balance of price and volume so they’re still losing money.
They’ve also been impacted by the world wide economic difficulties where people are spending less on hospitality in general so they don’t have as many people on nights out needing rides and the increase in home working/remote meetings means they have less business travelers.
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