[wmeredith]

Customers love Uber because it's prices are currently subsidized by VC money. Once that goes away, we'll see how competitive they are.

[empath75]

I actually preferred uber when it first launched and it was kind of expensive and you got nicer cars and more professional drivers.

[jghn]

Right. When I started using Uber, back when it was just "Uber" and w/o the various levels, it was cost-wise on par with local cabs but I always used it. The ability to get a decent experience, when I wanted it and with the online capabilities was a huge win over taxis.

[dajohnson89]

Uber black still provides that option.

[Zach_the_Lizard]

You can still use Uber black for that.

[cheath]

I don't think this is necessarily true. Much of the VC dollars Uber has are currently being used to enter new markets. It's primarily used as growth dollars, as it should be.

They lost $1.2 billion this year and spent $1 billion on trying to capture the India market alone. In several other markets they were taking a similar strategy.

My suspicion is that as a rider in a primary market, you are paying a "sustainable" (for the rider) rate. Maybe not so much for the driver. But that's a different topic.

[baddox]

Are there any good sources for Uber's unit costs versus prices? I would be surprised if all rides in all markets are subsidized by VC money. I would expect most of the VC money is being spent on expansion (more cities and more drivers) and that Uber service is actually profitable in mature markets. There are several articles claiming that Uber is profitable in the US.

[tomcam]

This is the only in-depth treatment I have found. It's damning: http://aswathdamodaran.blogspot.com/2014/06/a-disruptive-cab...

[baddox]

That is from two and a half years ago.

[stale2002]

Uber is profitable in the USA.

So I see no reason why its won't stay competitive.

[DasIch]

Apple is profitable but it certainly not competitive on pricing. Monopolies also tend to be profitable, competitiveness isn't even a concern there.

[stale2002]

????

So are Uber's prices too low, because it is being subsidized by VC money, or are the prices too high, because it is a monopoly?

You can't have it both ways.

My argument is that their prices are just fine where they are now, and that there is no upcoming price hike, because the prices, in the USA, are profitable NOW.

[darpa_escapee]

In my market, Uber undercuts the established taxi businesses.

People clearly have a higher valuation for a taxi ride than what Uber is charging because they've been paying the higher price and are still paying it when they choose another business other than Uber to ride with. Once Uber has driven out the other options, thus the need for competitive pricing, why wouldn't they capture that lost value?

[stale2002]

What I am saying is, Is that if Uber is profitable right now in the US, then this isn't "undercutting".

This is the fair, free market price. That's how normal competition works.

If they were significantly not profitable, then you can use the price dumping argument.

But since they ARE profitable, then this is the price that the free market will go towards.

[DasIch]

I can have both because there is no relationship between profitability and competitive prices. Profitability doesn't imply competitive prices and competitive prices don't imply profitability.

That Uber happens to be profitable and offer competitive prices doesn't imply anything for their prices in the future.