[potatolicious]

By having comically large back-of-house operations.

In a more reasonable scheme the technology portion of a cab company is a small part of their overall expenses, commensurate with the degree of value it brings to the business.

This is true in some white-labeled cab dispatching apps (see: Curb), but not true for ones that chased sky-high valuations with assumptions of pure-software margins (see: Uber, Lyft).

You can afford to pay a huge number of top-dollar engineers and product people when your margins justify it. Being the tech layer on top of cabs turns out to not be in this category of business.

[anthonypasq]

yeah its really odd how so many investors got suckered into thinking that all these "tech" companies that are firmly not tech companies and whose businesses make money in fairly mundane ways based on things happening in the real world are going to make trillions of dollars.

I mean just look at Netflix. They were never a tech company, they were an entertainment company with a tech advantage and thats extremely obvious now. Same thing with something like Carvana. How the hell did they ever manage to convince people they are a tech company and will have tech company margins when they are just selling cars.

[potatolicious]

Total lack of due diligence and critical thinking, along with the very tech VC mindset where naysayers are poo-pooed for being out of touch luddites. Combined with the very weird incestuousness in tech investment circles where they all have the exact same brain worm.

Remember for the past 10 years where every bit of skepticism about these companies was vigorously attacked as either being a) grossly out of touch idiocy or worse, b) malevolent forces representing a conspiracy of anti-tech incumbents?

You had VCs that were willing to believe literally anything, and naturally an entire cohort of entrepreneurs happy to tell said VCs anything.

The fact that these same VCs haven't been run out of town on a rail suggests the bubble will regrow once things settle down some, and that's disappointing. I for one believe the efficient allocation of capital towards speculative technology is crucial to the advancement of the human race, but the people who've been doing it for the past decade have proven themselves to be credulous rubes who are utterly and congenitally incapable of it.