What makes Uber really big?

The main driving forces behind Uber’s growth are guts, hope and exploiting some perverse aspects of capitalism.

Uber is not profitable.Not just a year, not structurally. The company is investing in a total of more than $10 billion of clubs in the US that make large amounts of venture capital available on a professional basis. These investors, of course, hope that they will earn money double and cross back when Uber is going to issue shares and with the sale of those shares can repay the debts made. In fact, this has now happened and the cents are indeed double and cross-earned. According to the stock market, Uber is worth around 75 billion dollars.

Now you may be wondering how a company that runs hundreds of millions of losses every year can be so much worth it.That has to do with the fact that with their huge pockets they can easily print regular taxi companies out of the market. Because Uber can afford to run for years at a loss, they can offer taxi services and related products at a lower price or higher quality than traditional taxi companies. This existing market is extremely fragmented -every city has its own taxi companies -and is already working with very narrow margins. Such a small taxi company may be able to afford a loss of a tonne for just a year, but then the war shaft is empty and the gates must be closed. The drivers are on the street, or they are joining Uber. Now, Uber is suddenly monopolist in the city in question and can increase prices and make a profit in the long term (and invest in the loss they are going to run in the next city).

This tactic is of course not unique, but something we see more often.We stand there and look at it, so to speak. In my opinion, unregulated or poorly regulated capitalism along these types of roads is time and again for markets with fewer players, less competition, and ultimately for less innovation and higher consumer prices. And yes, I find that perverted.

Very simple: the service provided by the taxi industry is important, but the way in which the traditional taxi industry set it up was particularly underperforming.Taxi drivers are corrupt -they slow down money when they see the chance, taxi stations are sometimes barely reachable, the rates are very high… In short: The taxi experience left to be desired in many cases.

If you offer a transparent, simple and inexpensive alternative for this same service, then that will be successful.It’s no more than that.

That has to do with the fact that it is much cheaper than a normal taxi and very user-friendly.The rates are half or even lower than a regular taxi, moreover, the amount to be settled is deducted from your credit card, so even if you forget your wallet you can make use of an Uber.

Before you ordered an Uber you already have access to the costs so you will never get a surprise.I did last week when I had to use Uber for my work in Prague. It was warned in advance not to use normal taxis to get from the airport to the hotel, because Czech taxis are notorious because of the fact that they allow foreigners to pay far too many. This applies not only to Prague, but also to a whole bunch of other cities, except Amsterdam.

But even if they didn’t hoodwink you would take a ride from the airport to the hotel where we stayed at least 鈧?0.The ride with an Uber cost me 鈧?8. The ease of use is therefore in the fact that you do not need foreign currency, because the ride is debited directly from your credit card, which also saves the costs because you do not have a price loss.

In addition, you know who you are stepping into the car, so that the chance that you will be taken in a different way (dedriving, calculating night rate during the day, when you get off while your suitcases are still in the rear bucket etc) is minimal.

With the Uber app on your phone, you’ll always have a reliable and inexpensive taxi service at hand, in many countries.And that’s what people appreciate.

Leave a Reply