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
So most cities regulate taxi service, and Uber just showed up and began operating outside those regulations. That meant lots of lawsuits, lots of government lobbying to get laws changed on local and state levels, etc.
Additionally, the had to spend a ton to build up enough of a base of drivers and customers. Drivers don’t want to drive unless they can make enough money, so things like new driver sign-on bonuses were offered. Additionally, to build up a customer base, they offered all sorts of discounts to customers. These expenditures made sure they could quickly build up enough drivers to supply customers a quick ride and enough passengers to make driving worthwhile for drivers.
All these are expenses that are high up front, but will decline rather quickly once laws are settled, markets mature, etc.
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