Well, there are some examples of such loss leaders becoming successful but not in a market like this.
Tesla is a good example of a company that did this.
Tesla is a good example of a company that did this.
A company that loses money on every unit sale has no breakeven point (Uber). A company that makes money on every unit sale has a breakeven point (Tesla). Because Tesla's fixed costs are very high, their breakeven point is out there, and thus they must operate at a loss for a period of time.
Now this is a simplistic one product view. When you add multiple products and release timing to the model, the complexity increases. Not only does the complexity increase, we don't have enough external financial numbers to break apart the data per product.
Don't get me wrong, Tesla has execution risk. But financially, I'm not at all concerned. They won't fail for lack of profitability or demand, they'll fail because they couldn't execute if anything. And... well... they've been slowly but surely derisking their execution risk as well.
So we shall see.
What? Uber spends an additional ~$0 on every additional ride. They only lose money because of growth and price wars with the competition.
In mature markets with no competition (eg. Toronto) there are no driver incentives or bonuses and they are still cheap and popular with riders and drivers alike.
This sort of thing is super common, where I get a deep discount on a 'pool' ride but I end up riding alone. The drivers tell me that they get a regular rate (on top of whatever the bonuses are) which is per-mile. The guy tonight said he thought he was making like $7 for the ride in question, just on the mileage.
I... am pretty sure they are losing money on many pool rides.
They can be losing money on many pool rides and still be making money on pool overall. I don't know whether they are.