[vikramkr]

But what sort of growth are they spending money on - and is what they're spending money on worth it? If you're spending money on free rides, you might be getting users that aren't going to be profitable long term. If you're spending that money on r&d moonshots like developing your own self driving cars, then it's not looking so good for you when tesla/waymo/etc are so much further ahead. And if economies of scale begin working against you, where as you get more and more drivers, they begin to organize and lobby and push to become classified as employees and raise your costs, then you might be facing a reconing very soon.

[KaoruAoiShiho]

They're subsiding geographies that haven't yet reached critical mass for economy of scale to kick in. In mature markets they're profitable, so eventually when the other markets become mature for uber they'll also be profitable. The evidence is there. The money is put to good use. The only question mark is waymo/tesla/etc competition otherwise Uber would be a good bet.

[wpietri]

I think another question for me is how much their "mature" markets have any real moat. Uber intentionally killed of most of their competition, hoping for monopoly rents. But rideshare strikes me as a very low barrier to entry.

Uber was certainly technologically innovative a decade ago. But a lot of the mobile and geo stuff is now off-the-shelf or as-a-service tech. Now that they're not subsidizing rides, even in this discussion we see people feeling the pinch. Uber's going to have to extract a lot of profit to reward investors and pursue growth. I think they're becoming vulnerable to low-cost competitors who just want to get by. E.g., driver co-ops and local specialty companies grabbing market niches.

[KaoruAoiShiho]

So just like how Uber had to spend billions to subsidize markets to maturity, it's the same with any future competitor, low cost isn't a thing. Yet if Uber is already there the end market wouldn't look like how it currently is, it would be a mutually assured destruction with Uber where nobody wins. So spending billions to achieve nothing makes that possibility remote. Any competitor would have to bring disruptive technology.

[wpietri]

It is not the same. I don't think there's a need to spend billions at all. The market exists. The technology exists. Drivers are already driving. I think it could be pretty easy to switch them to something that's a better deal for them.

[KaoruAoiShiho]

The reason why Uber subsidies so much is because if there's not enough drivers people would need to wait a long time, or the price is very high and that creates a shitty experience that won't be able to compete. Conversely drivers don't have enough passengers. Initially, when you're just starting, that's just going to be a fact. Until you nurture the market to maturity the market doesn't exist. Don't look at what Uber has already built through years of huge spending and take it for granted.