On-Demand Startups Are Hemorrhaging Tens of Billions a Year
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Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#2man there goes my idea of uber for toaster strudels
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#3i would've appreciated a bit more breakdown on where all the spending was going. i mean, the user acquisition cost, will eventually go away for the most part once they reach a certain size. After that it's all about operations. the question is how do the scalability of providing service fundamentals look like, long term cost vs revenue.
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#4Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers.
It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs)
What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#5Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers. It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs) What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
Engineers, Rider Incentives (aka marketing), Driver Incentives (aka marketing)
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#6I asked in the recent thread how Meituan could possibly be affording to subsidize restaurant meals to be significantly below cost at restaurant as that didn’t make any sense. Turns out according to this article that it’s simply that. It doesn’t make sense. They lost $17 Billion in 2018 for a shallow moat around an ugly castle.
The next recession is going to hit hard, and I’m guessing a lot of the gig economy jobs will get a lot worse if not disappear.
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#7I asked in the recent thread how Meituan could possibly be affording to subsidize restaurant meals to be significantly below cost at restaurant as that didn’t make any sense. Turns out according to this article that it’s simply that. It doesn’t make sense. They lost $17 Billion in 2018 for a shallow moat around an ugly castle. The next recession is going to hit hard, and I’m guessing a lot of the gig economy jobs wil…
> a shallow moat around an ugly castle.
I hope this ends up in Matt Levine’s Money Stuff segment as part of his Unicorn Enchanted Forest series.
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#8Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers. It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs) What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
They spend it on artificially low prices, often charging the riders even less than they pay the drivers in markets where they are new and growing. The idea is that they will get a sticky network of riders and drivers and then raise prices later. It certainly worked on me.
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#9Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers. It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs) What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
The article hints at it.
“all these companies are deliberately spending profligately now to build their brands and win over dense populations of customers, so that in the future they can be more efficiently served. This is the exact playbook that once worked for Amazon.com”
I can’t count how many free Uber/Grubhub promo codes I’ve seen. How much they subsidize their orders, etc.
Re: On-Demand Startups Are Hemorrhaging Tens of Billions a Year
#10Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers. It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs) What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
The drivers are overpaid for the price Uber charges. That’s not to say they shouldn’t be paid more as human beings, but they currently pay unsustainably high wages to drivers in many areas that will need to be fixed with higher prices to compensate whenever Uber feels they are safe from competition (likely never).