My understanding is that in mature markets, Uber is profitable. The issue is that it takes a few years to become profitable in a market and so it's extreme growth pushes out profitability on the whole for a few years
> Even in the U.S., Uber's home market, the company continues to lose money. After turning a slight profit in the in the first quarter of this year, Uber lost $100 million in the U.S. in the second quarter. The loss increased in the third quarter, the person said.
I thought that they'd turned the corner in the US too, but go figure. I guess the claim that Travis makes about driverless cars relates to their profit margin as much as it does to their long term competitive advantage [0]:
> Developing an autonomous vehicle, he adds, “is basically existential for us.”
The US is not a mature market for Uber, it still includes a huge amount of cities where Uber is still relatively new and has yet to reach profitability. My understanding is that the profitable markets are places like SF or LA where Uber has been around for 5 years
Not before destroying any competition with cripplingly low rates. That's the problem: I can't hail a goddamn taxi anymore, despite it being cheaper by any back of the envelope calculation for society as a whole.
You know.... a monopoly controlling drivers is... um... some how better.
In all seriousness, Uber drives down price to a point that no one can really figure out if being an uber driver is profitable. Uber makes money, but none of that proffit is spent in the local economy. Capitalism doesn't work at that scale... look at the loss they can endure, compare that to a local cab firm, or even somewhere like NY.
> despite it being cheaper by any back of the envelope calculation for society as a whole.
How is it 'cheaper' to manufacture extra yellow cars and have them drive around aimlessly searching the streets for fares vs. hitching a ride with my neighbour who drives for Uber part-time with the personal car he'd have bought anyways?
You mean once they have burned VC money to price dump transportation in a given market, they start charging higher rates to make money and run pet R&D projects.
