Why are service apps like Uber and DoorDash losing so much money despite being so popular? What are they spending all that money on?
In: 523
Uber’s business plan hinged on driverless cars from day one. It was never profitable to be paying drivers. So they started the company and building a name and customer base in the hopes that they would be poised to corner the market the moment driverless cars hit the point where they could be taxis.
Obviously that’s taken a lot longer than they anticipated, and they’re in a holding pattern trying to maintain their market share while simultaneously bringing in as much new venture capital as possible to stay afloat. As long as roch people keep giving them money as an investment for when they “hit it big,” they can continue to operate at a loss because it’s other people’s money they’re losing.
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