Yes it’s good that they charge the customer more than they pay the driver, but that doesn’t translate into a “profitable transaction” from a business standpoint. If it takes $X millions in engineering costs to build and maintain an app required for that ride to have occurred then one needs to prorate that cost across each ride as a cost and so on. There are lots of examples of these creative “our transactions are profitable” claims like WeWork’s much ridiculed “Community Adjusted EBITDA” metric.

The fancier your metrics need to be to show you are “profitable” the bigger the red flag should be that all is not well in Oz.

Like I said, I don't know. I don't think the questions can be dismissed just by assuming that VCs know what they are doing.

Edit: I went and looked at GrubHubs 2019 Q4 results [1]. They operated at a $30M loss. Most of the expenses were "operations" related. I'm not sure if that includes engineering, but I guess it doesn't.

[1] https://investors.grubhub.com/investors/press-releases/press...

2019: -18M

2018: +78M

2017: +99M

2016: +49M

2015: +38M

2014: +24M

2013: +7M

2012: +8M

2011: +15M

They are not. But they are banking on the general public to buy shares without scrutinizing the business sustainability and be left holding the bag.

Since IPO:

Shopify? $28 to $754

ServiceNow? $25 to $361

Alibaba? $93 to $199

Splunk? $36 to $149

DocuSign? $39 to $119

Teladoc? $28 to $188

Atlassian? $27 to $175

MongoDB? $30 to $194

Square? $12 to $73

Twilio? $26 to $187

Workday? $48 to $153

Veeva? $44 to $195

Zoom? $62 to $167

Facebook? $38 to $205

Palo Alto Networks? $53 to $215

Okta? $23 to $177

Wix? $17 to $166

Wayfair? $32 to $183

The Trade Desk? $27 to $292

Coupa? $29 to $205

RingCentral? $18 to $283

Zendesk? $15 to $73

Zscaler? $33 to $75

PayPal? $34 to $143

CyberArk? $30 to $96

Proofpoint? $13 to $115

Qualys? $13 to $101

Smartsheet? $19 to $52

JD.com? $20 to $47

Anaplan? $24 to $40

Zillow? $26 to $46

Roku? $26 to $117

Or more recently:

CrowdStrike? $58 to $76

Cloudflare? $18 to $27

Fastly? $24 to $36

Maybe they're holding one of the older bags.

Fortinet? $8 to $137

Tesla? $20 to $790

Salesforce? $4 to $169

Baidu? $8 to $95

Netflix? $1 to $438

Google? $50 to $1,349

Oh the horror.

Several broke regulated public utility or near utility functions like housing and transport.

Some are just scofflaws (uber, Airbnb)

Many are extra territorial trans national tax avoidance

These left and right columns distort the actual net effect on the economy.

Sure: my pension fund will be in all of them

Some of us think they're hypebeasts in search of a greater fool.

Well sometimes they are, sometimes they aren't. Softbank Vision Fund justifies at least questioning some VC strategies.