Honest question: how isn't this dumping? I thought that anti-dumping measures were a thing. Couldn't it be argued that nine years of losses mean fares are being sold below cost to push out competition, and therefore this is not ok? In particular in the context of Uber being a US-based company operating in lots of other countries (as in, being international trade, etc).
I always wondered that too. And Uber itself makes no bones about how its ultimate strategy is blatantly anti-competitive. It's weird; it seems to go to a degree well past Microsoft's bundling Internet Explorer a bit too tightly with Windows in 1998, for example, which I understood to be the basis of their getting sued by the Justice Department.
Edit: Ah, well, I guess sibling comments have answered the question, more or less. Thanks!
Dumping usually means selling below unit cost, which they're not doing. What they're doing is failing to cover their fixed costs in the same year they incur them. That's completely normal, especially for new businesses. Whether they ever will be profitable is a different question entirely.
>Dumping usually means selling below unit cost, which they're not doing.
only if you fall for their clever structural arrangement, the article addressed this. Regular tech startups lose money because of high fixed costs but recuperate through falling marginal cost once they scale.
Uber has no change in marginal cost because every additional driver costs exactly the same, and in fact they incur inefficiencies because every driver has to look after their own car, so there is no scale.
They absolutely do sell below unit costs, just with one level of indirection between drivers and company because at the end of the day they have to subsidize rides if they want to compete with other business.
Their long-term plan has been to replace human drivers with autonomous vehicles, which actually would reduce marginal costs. Whether that ever actually happens we don't know yet, but the fact that they've been pouring money into it with no returns as yet is a major source of their losses.
> They absolutely do sell below unit costs, just with one level of indirection between drivers and company because at the end of the day they have to subsidize rides if they want to compete with other business.
They don't pay the drivers more than the riders pay them. That's the unit cost. What the drivers do as independent actors is something else, but I doubt the drivers are losing money on purpose.
How many startups have that been true for? Let’s take YC funded startups, which ones have become profitable? Even Dropbox - the only YC company to IPO - is not profitable.
I am not sure what you're talking about, Uber has the same lawful prices as normal taxis in Prague. Uber also does not drive anybody, it's Czech guys with their own companies that use Uber, Bolt and other platforms or their own marketing to gain customers and (happily) pay a small fee (way smaller than what traditional taxi company charges) for that service. While Uber has created great competition on the market, the traditional services do anything they can to limit entry to the market and ideally limit the total number of taxi drivers to a very small number.
