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Comment by MuffinFlavored | Hacker News Reader

> Frontier AI companies are selling at a loss.

How big/deep of a loss?

I feel like I read this every day for years that Uber did this same "idiotic, losing" strategy (how it was pitched/discussed) and then one day we woke up and... without much fuss, boom, they were profitable seemingly overnight.

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Well and uber cut the driver pay in half and doubled the price. They didn’t really find any efficiencies, robo drivers don’t exist yet. Also why I hardly touch them anymore.

All that tells me is they did find an efficiency. If they didn’t, their driver supply would have dropped. Unlike the taxi business, Uber/Lyft can tap into otherwise dormant supply of drivers who already own a car but aren’t willing to spend all 40-60 hours a week driving a taxi. With Uber/Lyft, they can become part-time drivers (they have flexibility and they can use an asset they already own anyway). Is it worse for the full time taxi drivers who used to have the supply artificially constrained in the old medallion system? Yes, but does it also benefit others who want to do this as a flexible job, zero skills required other than driving, no boss to deal with, no job interviews, etc. Yes!

> Well and uber cut the driver pay in half and doubled the price

Devil's advocate:

* inflation caused everything to go up to some degree since then

* if it was "that bad" as you say, they wouldn't be extremely profitable and have so many users

both things can be true? "they cut the driver pay in half and doubled the price" did not lead to the collapse of the business/people to stop using it.

Ed Zitron discusses this as part of his post on AI economics : https://www.wheresyoured.at/ais-economics-dont-make-sense/

As long as you have slaves/sharecroppers, driving the people at the top of the pyramid at Uber they’re profitable and Uber makes money as long as you don’t care about the workers and as long as you can get around all of the regulations that are put on traditional cab companies if there are any left on the road.

For me nothing says low class like the Porsche dealer saying we can call Uber for you to take you home ridiculous… and it was a low class experience dirty car small never again ha ha ha…

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