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.
