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
Uber lost billions already this year. 3 billion and some cause of stock compensation. 300 million cause of driver rewards (5 trips in a day nets you 5 bucks more, as an example). 3 billion in r and d. 1.6 billion for administrative costs. 1.2 billion for sales and marketing.
Even a few people at each office is still hundreds of thousands. The building. Support staff. Lawyers. Advertising. The list goes on. And it’s not so much just a straight up 25 percent goes to them of every ride as it might seem. A lot of rides cost them more than it earns them. 🙂
Latest Answers