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
They’re not trying to make profits, they’re looking for a monopoly so they give out discounts and promotions and lose money in an effort to outlive their competition and then make a profit when they’re the only ones around. The investors keep pouring money into it because otherwise the company fails and they lose everything they’ve invested so far. It just doesn’t work like normal companies !
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