Thursday, August 25, 2016

Reich on Uber

From this FB post, copied below:

On Friday, Uber told its private investors (such as Goldman Sachs) that its losses continue to mount. In the first quarter of this year it lost about $520 million; in the second quarter, more than $750 million. Last year, Uber lost at least $2 billion. Since it began, it’s lost at least $4 billion.

Startups often lose large amounts of money as they build their markets and battle for market share. Even Amazon posted losses in the early years. But Amazon’s biggest loss ever totaled $1.4 billion, in 2000. Uber topped that number last year and is on the way to doing it again in 2016.

So if Uber is losing money, who, exactly, is making money? Certainly not Uber drivers. As I reported to you a few months ago, once you deduct their expenses, most aren’t earning much more than the minimum wage. And Uber keeps increasing the fees drivers have to remit to the company. So who's doing well? Uber’s top executives.

The real question is how long Uber’s private investors will continue give Uber's top executives a free ride.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.