Uber reportedly losing $2B per year, with passengers paying 41% of each ride

Amazon and others are trying this with food delivery, package handling, etc, and either the industry is smaller than the newcomers think it is (food delivery) or the industry is already so low cost that it can't be scaled well unless you have a certain amount of volume consistently transiting your infrastructure, which Amazon and DHL have been unable to hit nearly anywhere.

DHL at this point is just for same day business deliveries (where they have done an excellent job too!) and Amazon is just trying to break even on this being their own shipping company business, which is not going very well.

I see this argument a lot, but Uber is spending a lot to effectively lower the barrier of entry/switching by eliminating legal restrictions and changing people's expectation of car services. If I were at Uber, I'd be very worried about customers and/or drivers switching allegiances en masse.

They've tried

http://money.cnn.com/2014/08/19/technology/innovationnation/...

https://www.insideretail.com.au/blog/2014/08/26/uber-deliver...

Seeing how those articles are from 2014 and we're not currently reading glowing reviews of direct-from-store Uber deliveries, my guess is that their unit economics didn't work out.

How do you dominate a market that is :

* with a very low entry cost since anyone car develop the same software that you do now that it's been tested and proven

* extremely highly regulated so you're highly dependent on government's good will

* live in a world where competition is a religion

Betting that big on driverless cars sounds like madness to me. But then again, maybe that's why it is the right thing to do?

"Labor," huh? Uber's "laborers" also carry the capital cost, operating cost, and risk of the transportation service they provide. They own their vehicles and pay for fuel, maintenance, and insurance.

Who covers those costs when no drivers are in the mix?

Somebody has to pay for that stuff. It's still true that a big chunk of uber's success in big cities comes from dodging regulations and medallion costs. In other words, they are gypsy cabs with a slick app.

Let's say driverless cars happen in the next five to ten years. I see two scenarios happening - neither do I need uber. First scenario is my local car at my house becomes driverless. I can simply call my car to pick me up from anywhere. It can return home and wait (or go and pick up others as it's own on demand taxi). I now don't need uber at all - even though I use them now. So that is not a good scenario.

Second scenario is I am traveling and need a car/taxi as my local car is at home. If so, why would not other people in that city simply allow for their cars to pick me up while they are not in use. Every driverless car is now a taxi.

Basically all that is needed is an app and some service where owners subscribe and let their cars be used as a taxi. Perhaps uber controls the app and service as the dominant leader. But I bet there will be a lot of competition in that area with car rental companies, manufacturers, local cab companies, individuals and uber all competing.

I suppose the third scenario is that many people do not own a car in the future and we just subscribe to a car service. Perhaps in that area uber is the choice. But perhaps the manuacturers roll their own service too that you subscribe for a time share of a car.

Uber's drivers aren't just a labor cost, they are one of the company's main sources of capital since it is the drivers who must buy or lease the cars and make the payments. Here in Seattle there are around 9,000 drivers, presumably with roughly one car each costing about $25,000 apiece (avg. Prius), or over $200MM in capital equipment for just one city. Current estimates are that an Uber driver working full time nets <$40,000 per year not including the cost of the car, which is likely at least $6,000 in payments. There are over 160,000 Uber drivers in the US, collectively they're paying about $1BN a year to provide the cars for Uber. In a driverless model that cost is entirely shifted to Uber itself.

If the business is large enough, you could combine drivers and AI. For example when hauling people to/from airports, the difficult situations usual arise on the city end. The airport and highway part could be "easily" covered by AI. Driver would jump to car closer to the city.

Or you could use different vehicles. AI driven minibus for long haul and current driver system for shorter distances. If the system runs smoothly (no extra waiting) and pricing is right, I could imagine using something like this.

Serious question: why bother with the current Uber service? Why not just focus all money on self driving and not spend money on subsidized rides.

My guess is that self driving is a scapegoat , and that their business model is more simple: push driver wages down + surge pricing + extinguish competitors. No need for tech there.

Owning, repairing, cleaning, maintaining, parking and fueling (re-charging) self-driving cars is fleet management, which Uber doesn't really have a lot of experience with.

Perhaps you could enlighten us by naming them.

Those worse companies become worse due to corporate pressure to deliver.

But Uber has been like this from the beginning starting with the founder. The body is as corrupt as the head.

I hope Uber fails while bringing about auto driving to the market. The disruption from an Uber piñata bursting will be good for the market.

The wallet in some countries is already voting them out, so they break the law to be competitive.

I've never used them and will continue to never use them :-)