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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The real answer is that they are just waiting it out. They already have orders with Tesla and other major car manufactures for the first batch of legal amd fully self driving cars. We are already used to the service and, soon enough, they won’t need to pay drivers. The only overhead beside app management will be the cost of the self driving car -at which point they will make money hand over fist.
Lots of people who never used a cab before Uber / Lyft in this thread. They used to be absolutely awful.
If we are just talking about Door Dash and Uber Eats, think of it like a game where you have two teams that each has a really big bucket of water – like the size of a house. But each bucket has a hole in it!
The goal of the game is to make sure your bucket never runs out of water by having your teammates keep filling the bucket with water.
But the only way teammates can fill their buckets is by running to random houses in the neighborhood and asking the neighbors to fill it up.
If your bucket runs out of water, because you don’t have enough teammates or random neighbors helping, then you lose and a lot of those teammates and neighbors will go and help the other team.
Each of team is simply hoping the other team’s bucket runs out of water before their bucket runs out of water.
Also, there are other people who are gambling on this game and betting their own money that one team will eventually win. So to help their chances, they give money to their team to make sure the teammates keep filling up the bucket, and to get neighbors to help out. Because if their team wins, they will end up getting all of their money back and even more! We call these people investors.
In reality, there are more than two teams trying to outlast each other in the food delivery space, but the game remains the same. And when one team loses and the other teams acquire some of their teammates and neighbors, we call that increasing their share of the market.
Finally, when there are only 1 or 2 teams left, because all the other teams lost, they will have time to fix their bucket’s hole – or basically then they won’t be losing money any longer.
The company has been working on autonomous vehicles, which is a significant expense. Additionally, Uber has been expanding its operations worldwide, which requires a lot of investment. The company has also been involved in several legal battles, which have resulted in significant expenses
Because they started as a way for the _______ to launder money. They were never meant to make money they were meant to bury a pile of shit in millions of dollars and make the rubes say, well there must be something valuable under all that money. Then they IPO, the _______ get clean money out.
It’s a con, it’s always been a con.
I redacted because it seemed racist to blame an entire populace on what their rulers did.
Uber especially subsidized their own service as to undercut taxis services. Now years later in cities where they have pushed out most taxi service you see their prices getting higher and their service getting worse
Scaling their business by loss leading pricing.
I book with them for the same journey every week & I feel like I pay a premium now their system knows that.
Try booking in advance; prices are stupid.
I like to say: Here in startup land we burn money, the smoke attracts the customers.
Or for real, running a taxi service is expensive with all the drivers and the cars there are close to no economies of scale. Which is not super suprising seeing as the taxi industry never consolidated over the last like 50 years. Uber has no business model.
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