Why are service apps like Uber and DoorDash losing so much money despite being so popular? What are they spending all that money on?
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As an additional point, in some countries the commission taken by uber is much more than others. For example in India where I live, they supposedly take 30-35% of the total cost. Whenever I commute by using Uber or Ola, the cab driver is often more than happy to request a cancellation and offer a lower price than what’s shown on the app. This would mean that these ridesharing apps are essentially providing the service to drivers and customers for free which would certainly result in a loss. We have 2 apps called Swiggy and Zomato which are similar to Doordash, if a person is frugal about which restaurants to buy from and abuse the coupons which rotate and can often discount a substantial amount from the bill of the order, the app would almost certainly be losing money in the long run. This shows in the IPO for Zomato, they opened high and have fallen by around half since. Swiggy has reported an 80% increase in losses in the 22-23 financial year.
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