Seems we are developing an economy of almighty middlemen. Apple taking 30%, these guys are also in that range. When I was contractor there were agencies that would often take 40% or more cut.<p>There was this dream of the internet enabling the smallest players to be able to sell directly but instead we have these powerful institutions that take a huge cut out of every transaction.
How is it that Uber is losing money? They have such a huge amount of income, There is an Uber on almost every block in America. They don't pay their contractors a living wage and seems to me they have extremely little overhead. They don't have to maintain cars or even have an HR department for their employees. All they do is develop an app that does nothing special.
Is it all R&D?
“Jalopnik also conceded that there might have been selection bias for drivers unhappy with the cut being taken out of their fares.”<p>Inaccurate headline
Totally anecdotal: while travelling abroad I tried to order an Uber with my regular account and card. The process went well up to the point where I could see the price but then failed because my card was not accepted for some reason. Immediately switched to "cash" and the price displayed went down. The original price was 30% higher. The same evening I repeated the same steps with another fare and got the same outcome.<p>I'm not sure if this was a coincidence, some local policy regarding paying cash vs. card, or Uber doing something shady. But I asked all my friends to compare the price with the driver (or pay cash, although this may be less convenient) if they ever use Uber. I've read articles before that Uber was showing the driver a lower price than the customer in order to give the driver a lower cut. If this is the case then it wouldn't work when paying cash.
I think Uber/Lyft provides much broader service compared to Apple/Google's 30% percent cut for App store purchase and subscriptions , What they charge for just hosting your app and providing payment gateway is outrageous.
It's well known that they are in the red.<p>The question is, if the entire business model does actually work and the good thing about capitalism is that we will see it over next 1-2 years as it's like natural selection. If drivers stick around (or self driving becomes reality), and riders are happy with pricing then both their customer bases are happy and business will flourish.<p>Otherwise, stock will fall and they disappear.