“Why companies like uber, doordash, lyft, etc. make billions in dollars but make no profit?”

Question

“Why companies like uber, doordash, lyft, etc. make billions in dollars but make no profit?”

In: 4

Answer 1

Profit = Revenue – Expenses

If a company is making a billion in revenue but also spending a billion in expenses, they are making no profit.

Why their expenses are high can be a variety of factors. For all of the things you mentioned, they are paying a lot for developers, IT expenditure, and advertising. It also can be that the company is spending all of their revenues on R&D and growth, like Amazon for the first decade plus of its existence.