Because the cost of a cab ride is not $6 to drive entirely cross town. It just isn't. Uber is popular because it's cheap as shit. If SuperRide came out, and it was half the price of Uber, no one would ever use Uber again.
But that doesn't mean Uber is losing money by offering it less. It costs the driver more to drive farther for less, Uber doesn't have a higher expense for a longer ride.
Still doesn't really explain it. A taxi ride is not 59% more expensive than an Uber, yet a taxi driver is getting paid a better wage. So Uber is definitely burning more money in other areas not related to the ride itself. In Canada now the cost of an Uber when they tack on their safety fee and booking fee is pretty much on pare with what a taxi company charges for the same ride. And now taxi companies where I am from have their own apps just like Uber to request a taxi and get an upfront fee. So now I can easily compare the two costs and see that a taxi is usually the same fee or a $1 or $2 more.
Taxi companies are better at scaling than Uber. They can do bulk vehicle procurements and sign service deals. It is no wonder they can pay wages and not be that much more expensive.
Sorry maybe I am failing to understand a concept here but Uber does not even have to worry about vehicle costs at all, not to mention no expensive overpriced taxi medallion.
Comments
Because the cost of a cab ride is not $6 to drive entirely cross town. It just isn't. Uber is popular because it's cheap as shit. If SuperRide came out, and it was half the price of Uber, no one would ever use Uber again.
But that doesn't mean Uber is losing money by offering it less. It costs the driver more to drive farther for less, Uber doesn't have a higher expense for a longer ride.
"Investor reports reveal riders only pay 41 percent of the full cost of each ride, with investors footing the remaining 59 percent."
I hope this explains it more clearly.
https://www.vice.com/en_us/article/9a3vye/uber-true-cost-uh-...
Still doesn't really explain it. A taxi ride is not 59% more expensive than an Uber, yet a taxi driver is getting paid a better wage. So Uber is definitely burning more money in other areas not related to the ride itself. In Canada now the cost of an Uber when they tack on their safety fee and booking fee is pretty much on pare with what a taxi company charges for the same ride. And now taxi companies where I am from have their own apps just like Uber to request a taxi and get an upfront fee. So now I can easily compare the two costs and see that a taxi is usually the same fee or a $1 or $2 more.
Taxi companies are better at scaling than Uber. They can do bulk vehicle procurements and sign service deals. It is no wonder they can pay wages and not be that much more expensive.
Sorry maybe I am failing to understand a concept here but Uber does not even have to worry about vehicle costs at all, not to mention no expensive overpriced taxi medallion.
December 2016. Are you really going to base your position on data that out of date when things were far more opaque?
How about using the S-1 or quarterly filings instead.
Is it really cheap as shit? I've taken cabs and Ubers around Seattle and never found that one is particularly more expensive.