[Donzo]

How does Uber burn so much money? Isn't it a fundamentally profitable enterprise? Aren't they just skimming off contractors' wear-and-tear?

Won't they eventually hit a point where they promote their product less aggressively and generate significant revenue off the massive ride-sharing network that they've established?

[SXX]

They burn money to expand on markets where they still have competition from conventional cab companies or local competitors who come to market earlier. And they also tend to buy or sell into partnership in case they lost battle for said market like in middle-east Asia or Russia.

As for large network effect this is my layman talking, but it's only important on markets with highly mobile population like US or EU. Problem of Uber is that high percentage of population in many countries rarely travel outside of their city, region or country. While you travel a lot Uber is great: you arrive and it's working almost everywhere, but if you stay within borders of your home city 95% of time you can as well use some NotUber app instead if you like it more of it cheaper.

[rhacker]

Just curious. I don't have TV so I don't have commercials, but are they like, advertising on TV or something, or is it more like, they fly into whatever city isn't using them, order up a bunch of cab rides, and tell the driver to work for them?

[SXX]

When they initially arrived to Russia they paid for quite a lot of offline ads space all around the city and I suppose their ads was there for at least a year. I don't watch TV for last 12 years so have no clue if there was any ads there.

And since back then we already had multiple taxi services (mostly without mobile apps though) with quite low price they likely spend a lot on underbidding them.

[JohnWatsman]

I know this comment risks coming off as snarky, but I mean it genuinely: Do you honestly believe the only advertising channels that exist are TV and in person? Is it possible someone on a tech-oriented site is this unaware of the advertising arena?

[rhacker]

Lol, I honestly have never seen an ad for Uber in any website I have ever visited. They are, however talked about and recommended by everyone. So I am seriously curious where they are actually advertising.

[dkasper]

Some of both but mostly incentives to the drivers and riders, for example new driver bonuses are definitely not profit.