Comment Comment by smallgovt Can't Uber become profitable by raising prices and lowering costs?They have $40B in gross rideshare bookings and $3B in real losses for 2018.Let's assume 20% of their costs are fixed and 80% are variable.What might happen if they raise prices by 10%?Gross bookings drop by 20% / Revenue per booking increase by 10% => $35.2B in gross bookingsVariable costs drop by 30% (due to lower driver acquisition costs since they're oversupplied) => $24B in variable costsFixed costs stay the same => $8.6BThat nets $2.6B profit. My numbers are estimations, but it wouldn't surprise me if they could reach profitability without SDC's. parent smallgovt 7 years ago
They have $40B in gross rideshare bookings and $3B in real losses for 2018.
Let's assume 20% of their costs are fixed and 80% are variable.
What might happen if they raise prices by 10%?
Gross bookings drop by 20% / Revenue per booking increase by 10% => $35.2B in gross bookings
Variable costs drop by 30% (due to lower driver acquisition costs since they're oversupplied) => $24B in variable costs
Fixed costs stay the same => $8.6B
That nets $2.6B profit. My numbers are estimations, but it wouldn't surprise me if they could reach profitability without SDC's.