how does Uber lose so much money if it realistically doesnt do anything besides run an app, like the cost of depreciation, repairs, and fuel is all driver side and Uber just takes a cut from each transaction how can they be so in the red
In: Economics
Sometimes, instead of taking a cut from the transaction, Uber will take a loss. Like, the customer will pay $7, and Uber will pay the driver $10. This happens a lot when Uber has special deals trying to get new riders or when Uber starts serving a new area. Uber will offers big discounts for new riders, or big pay bonuses for new drivers, so that Uber loses money with every ride for a while. This also sometimes happens when shared rides are happening. A rider asks for a shared ride, and Uber sets the cost at $7 and to pay the driver $10, expecting that another person will ask for a shared ride, and thus get put into this ride for another $7. But if no suitable ride is asked for, Uber just eats the loss and the rider gets a solo ride for below cost.
Latest Answers