They are providing value and I'm a casual user myself. However the consumer price right now is arguably unsustainable against the stated quote above. To survive both of them are going to have to raise prices
Anyway, drivers make more than enough. After glancing at Uber’s books, it looks like they spent literally a billion dollars on advertising. They also do a a lot of research. Uber could easily run its ride sharing service with room for profit if it wanted to cut back in other areas.
Ride sharing is totally economically viable as a business and it is better than traditional dispatch in almost every way. Companies like Uber aren’t going anywhere. To say that Uber is worthless is flat out wrong. Overvalued or levered or invested-in, yes maybe. But ride sharing is solid. The only thing that could change it is self driving cars.
Look, you don’t need a paper or a PhD to understand this:
When I was driving, I got paid roughly 60c per mile and then got more for time, a one time fee and tips. But baseline 60c per mile. It costs 20c to 25c per mile to drive a Toyota Corolla. Yes, that includes all expenses. It’s the cost of insurance and gas and the cost of buying a new car when the old one is at end of life. Nobody is losing money doing this. It isn’t rocket science.
I don't have any data but this wouldn't surprise me in the least.
You're taking a bunch of people who really aren't that interested in running a business, just in making ends meet. It's not surprising that they won't do the kind of critical analysis that running a profitable business entails.
My first ever Uber ride was in an almost brand new BMW. Really nice car, but I have no idea how you can make money driving Uber with a vehicle that expensive. As a side gig for extra cash a couple hours a day in a high-density area? I can see that. But doing it full time with all the additional wear and tear on the vehicle? No way.
Judging from the comments I see on /r/freelance, I believe many freelancers/gig workers would prefer to be employees because they really don't enjoy doing the work that they are.
Which very likely is the vast majority of drivers. Subtract those and we're back to ordinary cab, pizza delivery levels of service. Probably less.
To know whether they could fall back to "just" competing for riders and only operate their core business is something that is not determinable from their released financials. How much engineering is true R&D (self-driving and the like) vs what would be required to run their core ride hailing platform? How much of their marketing spend is in established cities ("Coca Cola" type ad spend) and how much is to launch new cities or incentives to balance the development of the 2-sided market in new cities ("priming the pump" type of spend)?
I think Uber is a constellation of [small] profit-making businesses (most cities that have reached scale) and [large] loss-making businesses (select geographies and R&D efforts).