Saw a video from the Gravel Institute bashing Uber and thought worth addressing some points made in it.
The first negative point they mentioned on Uber was lack of profitability.
Claim
Uber is running strategic losses with VC’s to undercut competitors and eventually raise prices.
Why this is false.
Uber made 10.4 billion in revenue during 2018.
The loss was 800 million.
A loss of only about 7-8%.
They had much higher losses in 2019/2020, but reason was buy backs related to the IPO/COVID.
A 7-8% loss isn’t great, but for a tech company with at the time over 10 billion in revenue that wasn’t even a decade old, it’s pretty good. Even if they raised prices to gain a profit, it wouldn’t be that much.
Second issue with this claim is the idea Uber doesn’t have competition. Lyft made 3.6 billion dollars in 2019. Other competitors have launched and continue.
Claim 2
Uber doesn’t make any tech and local cab companies can do what they do.
Why this is false.
Uber invest in location tracking.
Uber invest in research to figure out when they have the most ride seekers.
Uber invest in interface and payment tech.
Uber invest in a lot of things with technology. Also, this whole idea other cab companies can offer the same stuff is just bizarre. They didn’t and waited years until finding similar services.
Also, cab companies in most parts of the US were legal monopolies that fixed the number of licenses to drive a cab intentionally and cab companies held them basically like a legal mob.
Claim 3
They didn’t improve the world.
Why this is false.
- They made things safer, identifying whose traveling, who is picking up, where from and where to at what time.
- Many markets who previously had no vehicle transportation do now.
Those are pretty big.
Claim 4
Drivers are paid poorly and less over traditional cab services.
Few thoughts on that.
- The average Uber salary is skewed, because it factors in lower earning markets that previously had no drivers.
- The people doing it full time in major cities have showed comparable earnings versus cabs.
- Sometimes a job isn’t meant to be a job and part time labor is better. If college students can do this, get more service available to customers and people get better prices/service, what’s the fall there?
Final thoughts
Uber has made the world a better and safer place.
I really see this trend in some political groups to call them out or Airbnb and it’s just such a negative and anti progress thing, it’s strange.