Re:Why I don't believe in Uber's Success
by onion2k on Thursday January 19, 2017 @01:22PM
(#13438056)
I think a lot of investors and founders try to replicate the model that worked for Paypal. By accepting a high customer acquisition cost (in the form of literally giving away money) at the start you can scale up phenomenally quickly. It's a proven model. The problem is that it's hard to know if you can still attract new customers without that artificial appeal, so actually stopping is a huge risk. Your growth figures could collapse. Uber have managed to amass such a ridiculous warchest of cash that they won't need to stop for a really long time. And I suppose that's the point - if they can get to profit even with the subsidies before they run out of money they won't ever have to stop giving away money to new customers.
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Re:Why I don't believe in Uber's Success
by rnernento on Thursday January 19, 2017 @01:25PM
(#13438076)
How is it possible to get to profit with the subsidies?
Re:Why I don't believe in Uber's Success
by Namrog84 on Thursday January 19, 2017 @02:39PM
(#13438809)
The same way that free mobile games make most of their money from 1‰ of the 'whales'.
Nom mobile games. Let's say team fortress 2 or other games subsidized to make game free for all. When a small portion are buying crates and skins.
Uber could do same with black car. Delivery services. Etc.. And then offer discount /free for the (multiple independent ride share or other) to those that want to be cheaper.