Re:Uber and Lyft ordered by California judge to classify dri...
by moduspol on Wednesday August 12, 2020 @11:54AM
(#24133312)
There are some rides that are subsidized as loss leaders undoubtedly, but that's not the primary case.
The way I see it, it's already proven that riders will accept paying X dollars and drivers will work for X dollars, minus Y% for Uber's cut. Uber's Y% is likely higher than it needs to be, but at the end of the day, it's a SaaS app. Even municipalities have set up local competitors / clones.
These companies are certainly pouring a ton of money into expanding into new geographic areas, other business models, and more. But as long as riders will pay an amount even a little higher than what drivers will accept, it can be profitable.
The way I see it, it's already proven that riders will accept paying X dollars and drivers will work for X dollars, minus Y% for Uber's cut. Uber's Y% is likely higher than it needs to be, but at the end of the day, it's a SaaS app. Even municipalities have set up local competitors / clones.
These companies are certainly pouring a ton of money into expanding into new geographic areas, other business models, and more. But as long as riders will pay an amount even a little higher than what drivers will accept, it can be profitable.