I'm curious where you see the Apple-like margins at a business like Uber.
Taxi companies are profitable and they have employees, a fleet, garages.
Uber is not profitable and does the same job as a taxi company. Doesn’t something seem wrong here?
The reason drivers love Lyft is they pay more. They ph more because Lyft takes a bigger loss than Uber to stay competitive. That business model won’t last so Uber will outlast Lyft and then finally be on the road to profitability once the stupid Lyft price war ends.
I’m baffled by people who think Uber cant make money. there’s no logic at all in that thought process. They also ignore the huge rnd cost uber is footing for self driving tech.
I’m confident The sell off has nothing to do with kalanick spiting Uber and everything to do with him wanting to divest his interests so he can work on his other project
They’re only profitable because of regulatory capture. The government gives them a monopoly and limits supply.
If they offered unlimited medallions, taxis would lose money too.
If you want to know what business model to look at to see how Uber and Lyft will end up, look at the airline industry. Paper thin margins (and that's assuming they're profitable at all), required a government bailout, one of the few industries consistently declining in a historical market surge - many of the airline companies will go bankrupt again when there's even a whiff of a recession.
If the unit economics don't make sense, then you just lose more money by scaling. And that's exactly what Uber and Lyft are doing - they are literally losing billions of dollars every year. They aren't building infrastructure. They aren't building a brand anymore (their brands are diminishing over time instead of strengthening). They're just sucking what money they can out of their failing business model as the ship slowly sinks.
Taxi companies tend to own their fleet (and in some cases their licenses / medallions). The profit comes from return on capital invested. Uber does the same job as someone on the phone line at a taxi company.
Lyft’s contribution margin is over 50%.