On FT’s Alphaville, Izabella Kaminska takes note of the excellent, deep series on Uber’s Ponzi-economics that Hubert Horan published last year on Naked Capitalism and calls out some juicy highlights.
"Costs are costs, even if you’re a monopoly" — so the fact that Uber loses (a lot ) of money on every single ride won’t magically go away if the company manages to kill its competition by subsidizing riders with its investors’ money. Uber will need to find better economics somehow, and right now, that seems to involve two sleazy and improbable tactics:
1. Tricking customers into carpools rather than solo rides, nudging them with dark patterns in Uber’s UI that irrevocably commits riders to carpools if they absentmindedly tap the default button, rather than the increasingly obscured solo ride options; carpools make Uber a lot more money, but drivers and riders hate them.
2. Bullying legislatures into killing public transit, so that when Uber kills all the other taxi services and then turns its own service into a carpool-only, riders won’t be able to opt out by switching back to riding the bus.
Meanwhile, Uber is continuing to squeeze its drivers for a bigger share of every ride, while drivers push back, […]