burning money worked for Uber. As long as they can IPO or get cheap debt from governm friends any valuation can work. Uber lost double digit billions as an app with no edge or anythin. It always made no sense beyond 1 billion
That money they burned was on customer acquisition, building infrastructure, etc. The unit economics of paying to be driven to the airport or Benihanas was always net positive.
They weren't losing money on every customer, even paying ones. There just isn't a business model here.
I wouldn't say they had no edge. They had a huge advantage over traditional taxi companies. You can argue that a local Uber-like app could be easily implemented, that's where the investors came in to flood the markets and ensure other couldn't compete easily.
The situation is in no way similar to OpenAI's. OpenAI truly has no edge over Anthropic and others. AGI is not magically emerging from LLM's and they don't seem to have an alternative (nobody does but they promised it and got the big bucks so now it's their problem).
OpenAI competes with google, who can drop 50B/y into AI hype for very long time.
TBD. Some people did well while Uber gave money away, but Uber is not net profitable over its lifetime.
This model worked for the fleet owners so far because the Saudi gave enough money so that both (1) the customers were happy, (2) the cash from the ride could be divided between owners and drivers in a way these drivers complained only to a certain extent.
But the last two years (the only profitable ones) are much worse, both for the drivers and fleet owners. There is still sunk cost in there, but once the cars get old enough they will need to think well whether to buy/lease the next batches.
Uber is profitable on a cash basis, but if you’re a public investor, you got fleeced by the early-stage venture money and debtholders. I don’t think it will ever pay back what it raised.
> Uber could themselves get into the self-driving game
They tried. Made a little progress, killed someone, and gave up (rightfully so).
So let's imagine is 2040 and OpenAI is finally profitable. Now, Uber did this by increasing prices, firing some staff and paying smaller wages to drivers. And all this while having near-monopoly in certain areas. What realistic measures would they need to take in order to compete with, say, Google? Because I just wish them good luck with that.