From a strategic position, it’s not as great. Uber’s rivalry with Lyft is a war of attrition: given that the two services are perfect complements, right down to the drivers themselves working both networks simultaneously, growth is entirely a function of platform-level economics. While Uber is wise to cut corporate costs before materially cutting driver commissions or raising consumer prices, it’s not exactly a show of strength to be scaling back marketing and engineering, the very departments that Uber needs to continue growing.
That being said, the size of Uber’s war chest doesn’t make me worry about their ability to continue operating. If I had to prognosticate, though, I’d say this is a sign that Uber is going to be posting some rough results for a couple quarters.
But the whole point of technology and good engineers is that you can scale up without hiring more people.
I see no reason a solid core of engineers couldn't scale Uber out indefinitely.
Uber needs to focus on it's most profitable cities and promote the subscription service. Target families with kids using highly trusted drivers and extra safety features, expand into medical transport, and "rent a driver" services.
It seems the basic premise of Uber and Lyft was to gobble up market share at enormous cost while autonomous cars were getting figured out, then switch to full driverless ASAP.
But full driverless keeps being “just a few more years away,” and it looks increasingly like that’s going to be too long for Uber to avoid running out of money.
They take something like a 20% cut of the fares don't they? How is this insufficient to pay for their platform?
I actually think they should be already be incredibly profitable.
Basically Wallstreet is subsidizing taxis for people at the moment.