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Comment by czhu12 | Hacker News Reader

it’s very confusing why uber makes so little profit given hire big their cut of every ride seemingly is.

I think truth is that tech companies are really bad at business unless they can scale with free unit economies. Even the unit costs with per seat subscriptions seem insane when you stop and think of the numbers in isolation. Ofc, compared to amount they pay their employees they are cheap, but in other places and industries it looks way overpriced.

R&D is not cheap and similarly executive comp is not cheap. They appear to have made a net income of 1.5 B last year (2025), but if. you look at exec comp, the top 5 execs took in 100 M. If you check all their creamy layer, it is likely they spent a quarter billion in stuff that did not need to be paid if all you had were private taxies :) with an open source app // I exaggerate of course since you need some servers to coordinate this, just pointing out where money goes. If someone could run and popularize an open ride platform, that quarter billion would go somewhere else, maybe to the drivers, maybe to the riders.

Intermediation and Uber style network effects aren't long for this world.

Personal agents will search every app for the lowest fare, when in the past the apps had a moat due to the economic frictions involved in sampling more than one app. Uber is also ripe for vibe coding.

Won't be much consolation to drivers as they'll get automated soon after probably.

I don't think all software companies are in imminent danger but Uber does seem particularly vulnerable.

100M on 52 billion revenue is 0.2%. Net income of 1.5 billion is about 3% of revenue.

> If someone could run and popularize an open ride platform, that quarter billion would go somewhere else, maybe to the drivers, maybe to the riders.

So if you found an equally effective management team that worked for free, you would save the customer about 1% at checkout. That is a tiny benefit, even granting the massive assumption.

Those numbers suggest a competitive environment with small profits, not an abusive monoply exploiting it's position.

100M is only 5 people. You add to the entire corporate paraphernalia, we will be looking at a lot of money.

There was this story I was reading yesterday, here or reddit, where a driver got $27 for a $65 (or so) ride. That is a horrible markup. The driver is not happy, but if the driver can survive for $27, we (the people) should be able to figure out how to charge $40 for the ride. Not saying it will be easy with the entrenched interests and the for-profit goal of our country, but still ... the markup seemed obscene when I read it.

They would make plenty of money if they went in to maintenance mode and just kept the lights on development-wise instead of pouring billions into R&D each year.

There's probably a big opportunity in the startup world for building businesses that have an end goal. Like a TV show that has a whole story to tell and then stops... a business that has an entire development plan which finishes and at the end you have a stable business that stops adding features, cuts development costs to maintenance, and just exists.

Like I don't need my taxi app to change, we're good, you can just be done making new stuff.

There's even more money to be made selling a false promise of infinite growth, dumping your bags, and riding off into the sunset.

Uber is a frigging service for calling a taxi, how much "R&D" does a mobile app connected to a database need?

Brainstorming new fees to add on to their services that the drivers don’t get a cut of takes up a few billion a year I would imagine.

Your local taxi company probably has a white-labelled app - that’s the obvious point of comparison.

For the companies in my areas, their apps feel kinda clunky, but are generally fully-functional, and don’t contain ads like the Uber app.

They spent billions and billions on trying to make self-driving a thing.

So they burnt money and have nothing to show for it? Why do we let these companies play around with billions of dollars while we lack universal childcare or medicare for all?

Complete looney toons over here if you think this is at all acceptable. I bet the workers would figure out a better use of the budget than the executives at this rate too.

It hurts so much that our system makes that concept as impossible at scale as landing a ship on Venus with 10,000 people and starting a space colony complete with all the amenities of home.

Yours is a pretty normal idea for nearly any business before 100 years ago, plus still the way all small businesses with 1 owner generally work (they call it a “Lifestyle business” today). But any public company that just said “Yeah we basically just print $400 million in profit every year, and have no plans to grow that, nor to change anything besides doing maintenance” gets the kind of treatment Southwest just did: taken over by the enshittification engineers and destroyed. Everything must have infinite growth!!

I think it's going to take a act of Congress to make this happen. We could literally legislate our way out of enshitification but where's the huge amount of money in that?

Some forms of enshitification already feel a lot like dumping to me. I wonder why existing consumer protection laws don’t cover it already in some cases.

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