> self driving cars make their business model profitable
In what way? Will they manufacture their own cars? That seems expensive, and from the past experience of GM and Chrysler Fiat not exactly a money-printing machine. Will they partner with manufacturers and buy their cars to add to Uber fleet? That will be a new expense that was externalised to the driver before, but now affects the company's bottom line. Will they just become a dispatch software licensee like Flywheel? Enterprise buyers tend to squeeze margins and negotiate tough.
What's the scenario where either their top line increases in a massive way or expenses are trimmed way, way down from where they are today?
Ridesharing is growing year after year, so their top line is growing fast. Self driving cars would remove the biggest expense which is the human driver, so the expenses will drop a lot. Currently it costs $1.50 a mile with a human driver, and should get down to $0.50 without a driver. The lower costs will increase the profit, and way increase the volume of people using Uber.
You're still ignoring the fact that Uber is the middleman here. Uber won't be manufacturing their own vehicles so when self driving takes off why wouldn't a car manufacturer directly offer the same service as Uber? They could undercut Uber and still make a profit because Uber will never be able to buy vehicles for as low as they can manufacture them.
Yes the driver is a big cost factor but so is the vehicle. If you can eliminate the driver and produce the vehicle and parts you will be able to produce and repair cars at rates lower than anyone without the same manufacturing capability.
> the biggest expense which is the human driver, so the expenses will drop a lot
This only makes sense if Uber driver's net income is pure profit. Instead I hear they have a set of expenses - fuel, insurance, tires, maintenance as well as servicing payments on the car. Some of these Uber is likely to negotiate down, mainly insurance. But some (cleaning, maintenance, parking, car washes, tires) are currently externalised to the driver and will have to be assumed by the company.
This is even before we get into the details of who manufactures the cars and how Uber comes into the possession of the vehicle (lease? outright purchase? purchase backed by a loan? etc.)
> They are aware of this, the goal is to have a large market share when self driving cars make their business model profitable.
That can't be their goal. Personally I think their goal is to get bought out at a very high price by some sort of car company / conglomerate. If car companies can make their own cars that are also self driving, why wouldn't they just toss up some software and go direct to consumers with them and cut out Uber entirely? Uber has a lead on the software and infrastructure for mapping but they're really pretty awful (I'd argue Apple Maps has surpassed much of what Uber does with mapping and routing at this point).
A car company with self driving cars is going to be able to provider a lower cost per ride while still profiting than Uber ever could unless they start producing their own vehicles.
> that in no way makes Uber a Ponzi scheme.
The parent stated "Isn't Uber like a Ponzi scheme in some way?" and then explained the rationale behind the thought. I think you took some words out of the parent's question when understanding what he or she was asking.
Uber subsidizes car rides using investor money to bring in more users which can make their valuation higher which can then bring in more investor money. Rinse repeat. It's not a ponzi scheme but it certainly has some traits of one and I think parent's question was fair.
In what way? Will they manufacture their own cars? That seems expensive, and from the past experience of GM and Chrysler Fiat not exactly a money-printing machine. Will they partner with manufacturers and buy their cars to add to Uber fleet? That will be a new expense that was externalised to the driver before, but now affects the company's bottom line. Will they just become a dispatch software licensee like Flywheel? Enterprise buyers tend to squeeze margins and negotiate tough.
What's the scenario where either their top line increases in a massive way or expenses are trimmed way, way down from where they are today?