Uber started in 2009. It incurred losses every year until 2023 except for a profit in 2019 which was due to selling subsidiaries in various countries. Numbers before the IPO are difficult to obtain, but it lost 31.5 billion from 2016 to 2022. Let’s assume a loss of equal to funding during the pre-IPO period, so 24.7 billion. This seems reasonable, since Uber never made a profit during the period.
So we’ll estimate Uber’s total losses at 86.2 billion from 2009-2022.
In 2023 Uber made a profit of 1.9 billion and in 2024 it made a profit of a little under ten billion. Prices for rides on Uber are between ten to twenty percent higher than taxi rides, rising to as much as 50% higher during surge pricing periods (when there’s the most demand.) Driver’s on average, get paid less than taxi drivers used to.
So–the workers get less, the customers pay more.
The strategy, as many people noted, including myself, was for Uber and Lyft to drive taxis out of business by undercutting their prices. Uber and Lyft didn’t need to make a profit, while taxi companies did. Once they had gained dominant market share, they raised prices and took oligopoly profits.
Everyone knew this was the play, and that people were getting subsidized rides now (Uber was much cheaper than taxis in the early years) in exchange for getting fucked over later. Well we’re now in the sandpaper condom period of “ride sharing”, where investors earn back their investment by hurting everyone else.
This should never have been allowed. Uber and Lyft violated massive numbers of laws and were just allowed to do so thru non-enforcement. The end result was obvious and it’s here now: worse wages, higher prices and less ability to regulate the industry.
This sort of stupid is why everything keeps getting worse. Every part of the “sharing economy” (which is no such thing) has made the lives of ordinary people worse. AirBnB in particular helped drive the rise in rental prices in hundreds of cities.
All that most tech-bro firms do is find a place where there isn’t market power, and try to add it. Same with Private Equity, which buys up entire industries in order to form oligopolies and monopolies, as it’s doing in the housing market now.
Market power always means more money for a few rich people and higher prices and worse income for everyone else involved in any given industry.
Welcome to the tech-bro future and remember, Soylent Green is people and so are high profits, always.
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different clue
I took cabs and cars as long as they existed. Where they still exist, I still take them when I need them.
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I’ve never used Uber or Lyft and probably never will.
I say bring back the rickshaw. We will have those days again — the halcyon days.
https://www.youtube.com/watch?v=HBAAS-I3mpc
bruce wilder
that was then, this is now.
it is not clear to me why Uber should be able to “collect” on its sunk cost largesse of years past, now. rather than bemoaning what should not have been allowed in the past, why not think about not allowing the price hike now.
it seems to me that Uber demolished “the barriers to entry” in ride-hailing. it is just an app, after all, and I am told AI can write an app in minutes for pennies. politically and economically, the time to act to foreclose the rewards to Uber’s strategy is now. they will need legal and customary barriers to competition in order to up the margins and late entrants do not need to make vast investments to demolish what has already been demolished.
I have started to use Curb. I am not saving that is a savior, but it is an example and should not be the last of alternatives popping up to feed at the trough. And, I wouldn’t use Waymo — that is a whole other set of issues.
shagggz
The problem with Uber’s strategy is that it has no “moat,” no way to keep competitors out after its initial phase of unsustainable predatory pricing. They’ve been resorting to one form of chicanery or another (accounting flimflam, self-driving car fantasies, reinventing the bus, etc.) to delay the reckoning and keep the gullible investor Ponzi scheme going.
Purple Library Guy
AI probably cannot in fact write an app in minutes for pennies. It’s unclear whether it actually speeds coding at all or just gives people the impression that it has.
Still, an open source ride-hailing app that could be used by local taxi companies and/or local co-operative groups of drivers should be feasible. I don’t see why it should be that difficult a thing, there’s probably “libraries” available that do most of the things the app would do. After gluing those together there might not actually be too much more to write.
different clue
I am guessing this is the “Curb” being spoken of just above. I’m not sure I entirely understand it. Is it supposed to be an even newer ” Uber” or “Lyft”? Or is it supposed to somehow get the user fair ride-price deals on the “Ubers”, “Lyfts” and Legacy Taxi companies which currently exist?
https://www.ridester.com/how-does-curb-work/
mago
Unregulated greed and manipulation. Ok, fine. Refuse or succumb. Whatcha gonna do when they’ve got you by the short hairs? Roll over?
Same as it ever was/same as it ever was.
Used to take pirate taxis to get around in coastal Costa Rica. Cost a fraction of the licensed operations, but it didn’t hurt the “legit” operations because they catered to the hoi poilli and tourist crowd while it was the street crowd who caught the buck a ride option operated by ballsy entrepreneurs with their beat up cars.
I was a known entity. When I told my chauffeurs that I was leaving for the states they all asked when are you coming back? (Didn’t tell them never coming back again.)
Screw Uber doober and that entire toxic world where money rules and humans are rubes ripe for exploitation.
Got two middle fingers pointing to the sky.
Revelo
>The problem with Uber’s strategy is that it has no “moat,” no way to keep competitors out after its initial phase of unsustainable predatory pricing
First part above is spot on, second is misleading. Predatory pricing only makes sense if a moat were possible after driving competition to bankruptcy. This is an extremely low barrier to entry business. Expect to see multiple competitors to Uber and Lyft pop up. In particular, cab companies will create their own apps like in so many European countries. Still a miserable business for the drivers, whether with Uber and Lyft or traditional cab company.
Alena Shahadat
Hi,
Here in the Geneva Canton (and Republic) of Switzerland :
Uber has been forbidden to operate since four years ago by Tribunal administratif. After several appels to higher Courts, and thé Federal court so as to to drag their feet,
and during which Uber had been authorised to keep its operations going (!), the Geneva Governement caved in. Uber promised to reclassify its drivers as employees.
Since 2020 the canton has voted for a minimum salary, they promised to adhere to that.
In reality, that is all lies. 1) minimum salary in our Canton is less than the convention based salary for a professional driver. (23 chf against 25 chf) so the drivers get paid same as cleaners and MacDo empoyees.
2) what about the cost of vehicle, insurance and other expenses, holidays, sick pays ? Other compagnies adhere to the chart, that is why most drivers for Uber work for a honorable business at the same time as driving for Uber. Often driving handicapped children to school after all night driving Uber which is if course against the federal law on drivers working hours and resting time. Then, they park their school bus, and go back to do Uber…. No comment.
Thus, Uber is parasiting other economical players. There were some voices heard from some politicians about thus issue, not for long.
3) another lie : Uber contracted (or created?) another Geneva-based company to hire its drivers in its stead.
4) Uber, with offices based in Netherlands, ows millions of swiss Franks (80?) to Zurich based retirement fund ( la Caisse de compensation du canton de Zurich) for ALL its drivers employed in Switzerland since it came into the country in 2014. Syndicates called it a theft on a large scale. Why ? Because, as Uber is based in a EU country, all the Swiss drivers are considered as EU seasonal detached workers ! Normally allowed only three months per year to work in Switzerland. Another criminal behavior. They promised to pays part of it to keep their license.
5) only two weeks ago, the Geneva State decided that Uber ils to pay minimum hourly rate for all the time drivers sit on the street in their cars waiting around for customers, “on the app”.
This is against the law on taxis and limousine transport. Because, here, as well as in France, a private driver is supposed to go back home after he drops off his or hers clients. Only taxis are allowed to use public space to wait around for a client AND THEY PAY FOR IT. And they have assigned parkings.
Now, it is true, as one reader has pointed out, anybody can build an app. But that is not the point here. I took part of a Geneva original experiment, when a lawyer and a rich Lebanese business man have hired a programmer who wrote them a copy cat Uber app. It was called Lymo. The moment the office of retirement funds (Office Cantonal des assurances sociales) called upon them to hire all their drivers as regular employees, the company immediately folded. Also, they were trying to be cheaper than Uber, which was foolish. We were asked to drive for 1.50 franc per kilometer or less. (Standard taxis are 3.50 – 3.80 and limousine service 4.50 per km).
Also, somme time later a drivers association raised money from its members and they bought an app. Rider or someting like that. I have seen them a couple of times at the airport, but not for last two years.
Also, taxis got their application called taxiphone.
Sadly, as I went to fetch my clients last week at the Geneva airport, I found it all draped in Uber colors. I am still disgusted. Even the luggage conveyor belts have huge UBER in capital letters printed all over them. This company has killed hotel limousines here with Uber Black, drove down prices and put on the streets hundreds of poor drivers so nobody can earn a living. They undercut retirement fuds, and they avoid paying taxes. They pump all available revenue out of the country. That wasn’t much even to start with but at least one could earn a living. Before. So what’s the point in letting them run amok ? So that the politicians look “in” ? (As in supporting the technological “disruption”) also, what is the economical point in having an airport if the tourists jump from the plane in an “Uber”. I have a laugh every time hapless tourists wonder aimlessly around looking for an “Uber parking” which does not exist as such and which is well hidden. WE stay courteous to them but, yes, it hurts to be helping them find their Uber driver. While we of course come to meet and greet our clients with a name board, chat them up and help them with luggage.
Last point : limousine services. Before Uber, the Law on taxis in Geneva recognised three categories of professional personal transportation : taxis – which are considered a semi- public institution and asked to be complementary to thé public transport, during the night and to be evenly covering the whole territory. They or the taxi central cannot refuse to fetch a client “because its far”. (As Uber drivers do).
Second category were “hotel limousines” often ‘prestige’ cars that were allowed to Park around hotels they had a distinctive blue signe on thé rooof. Between thé taxis and thé limousines They were the first category to disappear.
Third category was limousines : private drivers with luxury vehicles. This category does not exist anymore. Associations tried to fight that in vain.
Si now there are two catégories in our taxi law : taxies and a nondescript “vehicles with drivers”. That seem to be tailored to fit perfectly Uber. Even the tests and exams for thé licences were “dumbed down” because Uber was complaining that they could not hire (?) enough drivers fast enough to get a little black vehicle waiting on every corner of every street on their Magic app.
But we are still here !