Covid and Goliath: How ride service has gone from profits to uber-losses
Ride-hailing, eat-hailing Uber has gone into reverse, and its problems don’t stop with coronavirus
Uber should be a wonderful business. At its core, it is a taxi-booking app that takes a hefty percentage of the cost of each ride, but shoulders none of the costs of a network of drivers or cars.
So-called platforms — software that sits between two sides of a transaction, skimming off the top — are the proven business model of the internet era: Microsoft Windows was the glue between PC-makers and owners; Google connects advertisers and consumers; Apple’s App Store is a bridge between software developers and phone users. These businesses are so profitable since because they have the rare combination of dominance and high profit margins.
In theory, Uber’s app should do the same. Aside from the cost of developing and hosting the app and handling payment fees, its costs should be negligible, allowing the company to print money from the hundreds of billions spent on private car journeys a year...