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Comment by bradleyankrom | Hacker News Reader

Or maybe it's a splash of reality for those businesses that have relied on undercompensated labor and VC money to acquire market share.

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Not really. They haven’t been doing that for a few years now.

They are just going to leave the market if it becomes unprofitable. I see people complaining all the time about ride prices so the consumer doesn’t want this and im sure the people driving aren’t happy to lose the income as well.

Who is winning here?

It's not unprofitable, it's them posturing that they will refuse to lower their profit margins. Do you honestly think they can't afford to pay their employees the bare minimum that literally every other business in the city is paying? No they can easily afford it but if they do pay their workers fairly it sets a precedent that would slightly lower profits the "growth at the expense of everything" mindset.

Presumably those other businesses are able to generate more revenue per employee. Otherwise, they'd go out of business (which happens all the time), as Uber and Lyft are doing here. What do you believe their profit margins are? Uber's latest investor update says theirs was ~2.9% last year, though that number probably requires a decent amount of familiarity with the business to interpret.

I can't imagine investors would be very happy about them choosing to posture instead of making money with their investment if that's what they were doing.

Obviously investors want better margins. Treasuries are paying 4-5% guaranteed, so why invest in Uber to make 3%?

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