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Comment by Retric | Hacker News Reader

Uber has massively subsidized users for years, but they don't have the cash to keep doing this for very long or buy a fleet of self driving cars. When self driving cars do take off you can expect a spike of sales as people really want that feature. So, Uber would need to survive ~15 years before any major car companies feel the squeeze and I doubt they can make another 5.

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Uber would only need to raise fares 10% and not increase driver payouts to be in the black. The dire predictions don’t seem connected to the balance sheet I’ve looked at. Everybody wags their tongue at uber quarterly “loss” but they pay no attention to the more important measure of free cash flow

Break even does not enable them to pay for massive investments. A 20% increase would cost them significant ridership, but is more or less required to have any significant profit.

They would finance it through debt and equity, do it post IPO etc. There could be a merger instead of an acquisition. Currently if they cut their R&D by a bit and raise prices by 10% their more than healthy enough.

If they only raise prices by 10% it will cost them rides and drivers to Lyft / taxi etc. It's hard to say how much market share this would cost them, but you can't assume their numbers are going to be static with a price increase or they would have already increased prices.

10% is plenty to drive business to Lyft, especially with Lyft’s better brand.

Subsidizing users is one side of the coin. The other side is that Uber has been living beyond their means and they do not have the cash to keep doing this.

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