Uber Ride Subsidies
The cluster focuses on Uber's business model of subsidizing rides with VC money, paying drivers more than customer fares to gain market share and undercut competitors, while debating driver costs, exploitation, and long-term profitability.
Activity Over Time
Top Contributors
Keywords
Sample Comments
Uber, at least in the past, has been offering subsidies to its driver in many markets to grow its market share, Basically making up the difference between what customers are willing to pay and what drivers are willing to work for. The driver may very well be earning $25 for that $20 ride with Uber making up the difference.
VC money being burnt, yes. The true cost is additionally being offloaded to the drivers - taxi fares factor in things like insurance, wear and tear, etc, which Uber fares do not.
You're assuming perfect information, rational behaviour, and the same maintenance standards. Uber can save money at the expense of their drivers if drivers underestimate maintenance and depreciation costs. If they manage to shift liability for inadequate maintenance onto drivers they could also save money by under-maintaining and then allowing the resulting fines to bankrupt individuals rather than cost the company profits.
Drivers are making more than this, Uber is paying them. Uber is just giving away VC cash to consumers.
Uber is not making money? How? Why?
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.
Uber doesn't own the cars, it passes that significant cost on to the drivers.
Presumably Uber is paying the drivers the difference.
Uber definitely subsidizes each ride with investor money. They still lose dollars per ride
None of these - just decrease the 20-30% margin charged by uber to as little as possible.