The article talks about subsidies. Does anyone know how much Uber and friends are subsidising their rides? As in if I pay on average 10 USD to Uber, then the driver gets what? 5 USD, 10 USD, 15 USD?
Uber drivers get paid an amount based on a subsidy multiplier of the ride value, and they are highly sensitive to these multipliers. According to a driver I talked with recently, Uber takes 20% of the fare, but is currently giving drivers a bonus of about 2.5x. So if a fare is 10 rmb, Uber takes 2 rmb, then pays out 8 * 2.5 = 20rmb. Driving costs these drivers roughly 1-2 rmb/km, and if the subsidy ever fell below 1.…
Another subsidy I heard about gave about $1000 per week if you had over 80 rides. $4000 dollar subsidy a month goes a long way in China.
It really blows my mind that people think this is a sustainable business. Even after you out-spend the competition, who's stopping someone from downloading a new app from a new service? I've seen users in China blast all ride apps at once and just take the first one to arrive. Subsidies won't buy loyalty.