Ask HN: How is Uber losing money?
ELI5. I don't quite understand where their money goes. I feel like once they got their applications, servers, law trouble resolved/done, they shouldn't have had any trouble. But by all accounts they are in a bad situation (financially and others ways also). It seems like something that should be able to run with some maintenance but not enough to lose money?
3 comments
They subsidize a lot of the cost of rides. The driver earns more than you pay, with Uber making up the difference. It's a marketing cost.
Investors have pumped in a lot of money looking to make even more, but while uber remains a private company it is not accountable to those investors. When management decides they have had enough they just close the doors and take what is left. Just the M.O. you would expect.
cabtax
Uber is fighting legal cases all over the world and in so many jurisdictions. That all costs a lot of money for lawyers and management time which could other wise be more gainfully applied.
The Uber business model is easily copied, e.g. Lyft, so they are subsidizing drivers to keep them from defecting.
The biggest secret is that managements (and Uber is not alone on this) don't really care about costs, it is only investors' money.
The Uber business model is easily copied, e.g. Lyft, so they are subsidizing drivers to keep them from defecting.
The biggest secret is that managements (and Uber is not alone on this) don't really care about costs, it is only investors' money.