Their costs, other than taking a haircut on the ride, doesn't seem entirely clear, or obviously large.
A 2017 number says Lyft completes about 360 million rides per year. For fun, let's say they make $1 per ride, are they really not able to run their front-end operations with around 1,000 employees? (assuming an employee costs about $250k-300k/yr)?
That seems crazy to me, but I don't know what hidden costs there are. From an outside PoV it appears they need to run a more or less static website, about 4 smartphone apps with some back-end routefinding and accounting systems.
What am I missing?
Uber's margin is probably under 5% which simply isn't enough.
Customer service - Uber seems to have decided it's cheaper to just allow a few no-questions-asked refunds for cancellations than actually getting humans involved every time
Office space (in SF!) to hold all those employees
"some back-end routefinding" becomes hideously complex once you factor in:
- real-time road closures
- lyft line matching
- traffic modelling
- time-of-day turn restrictions
- normalizing data from various regional map providers
- routing itself is NP-hard
If you're a taxicab company and your non-driving staff is making that, you've definitely screwed up somewhere.