
Can Uber Ever Deliver? Part 2: Understanding Uber’s Uncompetitive Costs - Cbasedlifeform
http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver-part-two-understanding-ubers-uncompetitive-costs.html
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yarapavan
The first article presented evidence that Uber is a fundamentally unprofitable
enterprise, with negative 140% profit margins and incurring larger operating
losses than any previous startup. Uber’s ability to capture customers and
drivers from incumbent operators is entirely due to $2 billion in annual
subsidies, funded out of the $13 billion its investors have provided. That P&L
evidence shows that Uber did not achieve any meaningful margin improvement
between 2013 and 2015 while the limited margin improvements achieved in 2016
can be entirely explained by Uber imposed cutbacks to driver compensation.

Thus there is no basis for assuming Uber is on the same rapid, scale economy
driven path to profitability that some digitally-based startups achieved. In
fact, Uber would require one of the greatest profit improvements in history
just to achieve breakeven.

