What shocks me about both Lyft and Uber's enormous burn rates are that they suggest the companies are heavily subsidizing their drivers. This subsidy is in part to spur penetration in new markets (as all marketplace apps must do), but also suggests that they have reason to believe customers will simply not pay a rate that makes the business profitable.
Assuming the latter is the case, i'm not sure if they have reason to believe this will change over time. Instead, it feels like the human drivers are really just plays to keep the company growing until hypothetical fleets of automated driving cars. In theory, such a fleet would deliver massive profits, but those fleets will be enormously expensive to assemble. Even when they are assembled each company should expect tumultuous legal battles in many areas.
When i try to make all the monkey math work, it doesn't seem to add up. Maybe i'm not enough of a gambling man, but i really don't understand how the venture market still supports business models like these.
Assuming the latter is the case, i'm not sure if they have reason to believe this will change over time. Instead, it feels like the human drivers are really just plays to keep the company growing until hypothetical fleets of automated driving cars. In theory, such a fleet would deliver massive profits, but those fleets will be enormously expensive to assemble. Even when they are assembled each company should expect tumultuous legal battles in many areas.
When i try to make all the monkey math work, it doesn't seem to add up. Maybe i'm not enough of a gambling man, but i really don't understand how the venture market still supports business models like these.