| > At the same time, I would argue more people mean "there isn't one or more people at the top profiting from ownership" when they say non-profit. Yes, and this is a bad usage of the term, because whether or not there are people "at the top" profiting from ownership has nothing to do with whether the company is structured as a non-profit or a for-profit company. People "at the top" can profit from a non-profit, and you can run a for-profit company without "people at the top profiting". It's unfortunate that the term we use to refer to companies which cannot distribute dividends is "non-profit", but it's really bad to project conceptions of what those companies should act like onto them simply based on how the term sounds in common vernacular. And again, whether you are using the term with its precise meaning or with its colloquial one, non-profit status has no impact on a company's margins: > Presumably by doing everything Lyft or Uber do but without the need to ever pay out to investors. "Paying out investors" does not impact their margins. They can pay out investors from their profit margins (if they have any), but the fact that non-profits don't have any investors to pay out doesn't mean that their margins magically go up. And, yes, it's true that you never need to pay out investors if you never have any. Of course, if you never have any investors and your competitors all do, you're starting off at a huge disadvantage. |
I think your interpretation of the original comment and statement may be different than some of those you are in discussion with. I interpreted "challenge Uber and Lyfts margins" as "compete at a similar level" (with the margins of competitors being affected by the competition), and it appears you might be interpreting it as "getting better margins than the competitors". It's also possible to read the original statement as raising the question of whether it's even possible, and so fully in line with your position.
It is poor wording though. Margins have a complex relationship with, and are only one of the variables that goes into, profit.
> "Paying out investors" does not impact their margins.
Insofar as investors are willing (or forced) to defer payment it doesn't, but pressure can change strategy, and strategy can change margins. But as I outlined above, I'm not really making any argument for better/worse margins from a non-profit. Actually, I'm not making an argument that non-profits are any better at providing a service or surviving either. I was just adding a bit of information to the discussion.