Why do Lyft and Uber incur so much costs when they operate on a global scale? Forget global, let's take just the US, if Uber is the default ride app across the US, the cost to create the app, run the service should reduce drastically over time. It's been more than 10yrs and by now they should be doing really well. Same for Lyft. But from everything I hear, they are not. Am I wrong?
Because the margins suck. Yes, Uber facilitates a lot of rides. But those rides cost a lot of money. In addition to the trip itself, the driver needs to drive to you, wait for you to get in the car, and then wait after the trip for the next fare. That's a lot of time that they need to be compensated for. There is also a lot of competition. If Uber is too expensive, it's trivially easy to take a Lyft.
Wait, are you saying Uber compensates for the drive to the pick up location? Doesn’t make any sense, if there are enough drivers the algorithm should automatically pick the closest. Even then isn’t it the expectation that the driver ears that cost and the ride fee will compensate for that?
I'm saying that the compensation a driver is willing to accept is a function of all the time it takes for them to complete a trip. That doesn't mean Uber compensates them directly for that time.
