Gig Economy: The Money Sinkholes Investors Can’t Resist

1) All platform companies spend massively to gain market share. They subsidize the offering to kill their competition, making a loss during that time, burning investor cash.
2) Then they raise prices and stop subsidies, once they have market share.
3) Which means another contender can come along, doing 1)

Its an endless loop of venture retards financing cheap pizza delivery for me, with the tradeoff being that I have to use yet another crappy app?
Sounds good to me.

Free market theory says that under perfect competition there are zero profits.

If these companies only survive by perpetually attracting more investors they are just a pseudo Ponzi scheme than never pays anyone.

CEO of Uber made 22 million last year? Idk how much other executives make, but they might be able to trim some fat.

Too much competition

No such thing, competition is good

Business model is wrong for specific countries. The countries where labour cost is cheap it might be profitable.

Gig economy is actually great because it kills off rich institutional investors while they feed low-skilled workers. hooray!

If Uber can’t turn a profit on 30+B of revenue they never will

The largest food delivery company in Europe (Just Eat Takeaway) is actually profitable, so it's possible. "After a period of significant investment following the Just Eat merger and the pandemic, the Company is back to profitability.
Adjusted EBITDA improved significantly to €19 million positive in 2022 from minus €350 million in 2021"

Sounds like uber could do with running their own cc processor.

Uber pays a ton of money to its engineers. Salaries are nuts because they have to compete with Fang companies. Then they have offices in NY and SF. That they don’t even need because most of the staff is remote. Should they pull out of NY and SF and go full remote. They might be able to scrap a profit.

It’s funny because it screws customers, drivers, restaurants and investors 😂😂😂

I having driving uber and lyft the past 7 years. Thos ridehsare companies have become scammers. They took 50% straight up. It is really not worth it driving no more.

The average uber driver makes no where near $16-$34/hr. THAT IS A BIG LIE. Uber driver makes more like $8-11/hr. At least when I was doing itthis year.

That's why I stopped riding for them. DoorDash is much better.

I have done like 1 ride for Uber Eats the past 3 months. DoorDash is waay better.

I don't get where they see the need to innovate anymore. Most of them could cut back on development and start being profitable. It's an app that list restaurants and allows you to process an order. You don't need to sink billions to "innovate"...

I just call restaurants and order from them directly. That way they get all the money and they use their own delivery crews.

Wasting your working years without contributing to your pension fund or insurance gonna be doom for many young peoples once they reach older age. Might look totally irrelevant when you are in your 20's but probably for many will mean life on the streets in their "old" age.

Chinese or Russian Uber ride? That sounds like a recipe for disaster.

It is stunning that even with a lax regulatory environment and massive employee exploitation, they still cannot earn money. It's almost as though it's a fundamentally bad idea!

Can you do one on the Chinese app Meituan? they reported that they have reached profitability, on how they did it.

They cooking books too don't let them fool you. Who verifies these percentages? No one they steal from merchant and driver any chance they get.

Is there any simple explanation as to where these companies make a huge loss, and an explanation of how it's set up based on the margins given to drivers?

And... Where is the golden cow at the end why are investors throwing into something that clearly makes a huge consistent loss?

I think somebody should start an open source platform to network these services. It should be just how Linux is an alternantive to Windows.

Meituan is profitable because population density is what makes these businesses work. It will never function in suburbs.

Good video breakdown, It failed to cover an important element of these types of jobs. The cost of operating an automobile per the Internal Revenue Service is around $.50 per mile. These drivers do NOT make $16 to $34 an hour. They make that minus fuel, tires and their vehicles physical deterioration. A friend bought a Rav4 and put 65,000 miles on it driving for Uber. That's $2,000 for gas, $1,000 for tires and when you trade in the Rav4? It has been depreciated far more than the guy who didn't drive for Uber. In finance, there is a joke about Uber...."they've been selling dollar bills for 60 cents for 12 years now..." An airport run costs what it costs, Uber is good at raising money and losing it. They are not good at running a business.

Don't buy the BS. Investors may not be getting a return but the executives, and board of directors are making a killing. Uber's CEO makes 24 million a year and directors make 400k for a part-time job.

I will say that I opened a ghost kitchen using Uber Eats back during covid after I left the army.
Rented a kitchen/cafe after hours to make "gourmet" burgers that instead of cheese slices, I'd make cheese sauce like the stuff you'd make when making mac and cheese.
It turned out to be really popular but I didn't want to work the late nights until 3am so packed it in after 6 months.
Having Uber really helped with the start up, even with the stupid rates they charge.

If UBER has 9 billion dollars of debt then the recent interest hikes are likely to kill them.

This business is ridiculous. Literally all parties end up with a bad deal. Uber eats loses money, the restaurants have to sell items at a ridiculous discount or more likely have to jack up prices, the drivers don’t make shit and the customer pays an absurd amount because they are lazy as shit.

What a dumb business when all parties end up worse

All nice and good arguments but the reality is that some of these companies are now embedded in society and will be difficult for them to go away. Don’t really see taxi companies taking over…

One major factor that you left out is the zero interest rate environment, when their loans come due and they have to refinance at 7 or 8% the game is over and all these zombie companies will collapse.

What was not said is that the Uber driver is actually using the equity in their late model automobile to pay themselves. In a couple of years, their late model car will not meet Uber's requirements. In other words , you are wearing out your car on Uber's behalf.

The best thing about these BS businesses is redistributing money from hyper rich investors to the workers. I just hope no retirement funds got involved in them.

Amidst challenges like costlier prices, epic waits, and food arriving colder than your ex's heart, food delivery companies still stand a chance to make investors smile... eventually.

Just make sure to back the ones that have the tenacity (and deep pockets) to survive until delivery drones and self-driving cars save the day.

So, choose wisely, and your investment might just turn into the delivery of dreams! 🚗🛩️🍔

It’s all about cheap labour, f… “independent” workers
Could not care less about venture capitalist loosing out money or making plenty, in this case, it’s at peoples expense

My wife handled taxi loans at her bank for a while. Then her bank eliminated that department because the price of a taxi medallion had dropped to a small fraction of its previous value. It used to be that someone could drive a cab, pay off their loan after a few years, and then make a good living and support a family. Now the cab drivers may never be above water. If I'm in the city and I need a ride, I always take a yellow cab.
Also, Uber is a terrible company, if half of what I've read is true.

Can't compare Walmart and uber. You have so much freedom with uber. You don't get this with Walmart.

If they are that close to profit just raise the price 1 more dollar, sure you kose some customers but the ones you have atr profitable

As long as I knew, ride-hailing businesses like Uber, Grab, Gojek needs to burn so much money as a way to promote their business and to reach and get more users. They need to reduce or even stop promotions to cut their losses and become profitable.

How does one find this information, i googled uber eats profit just now and saw 11 billion, id like to research tinder as well

How come Meituan and Didi make profit? What is the difference? appreciate if you can analyze on that....

the power of taxi maffia... clear in thailand... they banned uber , don't use meter in many parts of the country and overcharge specially tourists that think this is same price as home country... police helps the taxi maffia, always...

paper thin margins?? restaurants sell you food at 3x the value price of the food...

Remember when businesses had to make money? Good ol' Silicon Valley.

Isnt uber in profit and hadn't uber investmented a lot of the profit into think like self drivr taxi and delivery

Back in the day, the job that people used to do during the summer was delivering pizza ... i/t wasn't meant to have a 401k, health benefits and be full time....

Hate uberEats, a $15 order turns into a $25-30 order with all the fees and tip