Let’s break it down.
>Uber takes 25% of the money from each ride on the app.
>It does not pay for any of the costs involved in the actual rides, not fuel, insurance, or vehicle costs, all that is paid by the driver.
>Their customer service is outsourced to India
>Each city they operate in requires a tiny office with very few people, simply to screen drivers
>They maintain mobile apps to operate their service.
Now, based on this, there is no reason why they should not be turning a profit on their $11.27 Billion annual revenue. What causes the $1.8 billion loss?
In: Economics
No one is really identifying the big cost for Uber and most tech startups. The technology they’re building from scratch. Their AI is pretty phenomenal, they also have nascent businesses in self driving vehicles, large scale shipping, bikes, scooters, and research research research to build their version of the future from scratch. It’s like those clickbait articles about how Apple “rips you off” because they sell a phone that costs $200 to make for $1100. Invention is a costly and risky business with way more losers than winners.
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