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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Marketing. They basically drove the initial push for the ‘delivery app’ industry off the back of intense marketing campaigns. The trouble is, when you spend millions upon millions of dollars before your business is really even off the ground, that money had to come from somewhere. Typically that money will come from investors and loans, and they have to make payments on those loans.
That means that if they’re barely making money before the loan payments are factored in, they’re losing money hand over fist once those payments are made.
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