[Certhas]

The Uber comparison makes no sense. This is the opposite situation. Uber lost money on rides, OpenAI is (possibly) making money on inference. Uber used an R+D moonshot to autonomous driving to justify capturing an established industry without reducing costs meaningfully. OpenAI has a core product that risks becoming a commodity with open source models only 6 months behind.

[simianwords]

Uber didn’t lose money on rides other than some edge cases. What’s your source for this claim?

[Certhas]

Do you have a source for the claim that Uber was making money on rides during its decade of enormous unprofitability?

Its public stance was that growth was more important than profit. Why wouldn't they be subsidizing rides to fuel growth if that is their publicly stated goal?

And anyway, we got the Uber Files some years ago which made it explicit:

"In October 2014 in Madrid, the presentation shows, the hourly subsidy to drivers of $17.50 was almost twice the hourly fare it charged, which was only $9.10. In Berlin, the gross hourly fare Uber charged was $2.20, while the subsidy it paid out to drivers was $10.20 an hour. Uber burned through cash to “buy revenue”, in the words of the presentation."

https://www.theguardian.com/news/2022/jul/12/they-were-takin...

[disgruntledphd2]

The vast, vast amounts of money they spent on driver incentives city by city would seem to support the OPs claim (source: I was familiar with their spend on ads in the US approximately 10 years ago).

[simianwords]

There is no evidence that Uber was systemically losing money per ride instead of at edge cases. Share your evidence please.

[disgruntledphd2]

> Share your evidence please.

This is an impossible ask unless one works at Uber. I can tell you that i saw how much they were spending on ads back in 2016, and how long it continued and can assure you that they were 100% losing money back then.

Like, even now their margin is around 10% (they made 5bn on 50bn of revenue). Other software companies make a much, much, much better margin because Uber is basically not a real software business, it's an app attached to a low-margin delivery business.

[s1artibartfast]

ads =/= rides

[disgruntledphd2]

Yeah totally. In some ways Google and Facebook being so wildly profitable was very bad for future tech startups.

Nonetheless, that's the bar from a financial perspective, and I honestly don't think Uber has (or will) hit that bar.

[lenkite]

Uber kept fares artificially low while simultaneously paying high bonuses to drivers to build a massive network. After burning through roughly $30+ billion over its first decade, Uber then pivoted its business model by raising rider fares, increasing restaurant fees on Uber Eats, and cutting driver pay.

Basically, win market through subsidy -> establish monopoly -> increase price -> profit.