> If the answer to that is, "because then demand would die", why doesn't that apply to taxis? Taxis make money.
Taxi licenses are an artificially constrained resource, which keeps prices high. As a result, taxis are typically only conveniently available in high-demand locations (among other ills).
There probably is a niche for ridehailing services as public infrastructure (or perhaps using a co-op model) running on open source software, but that excludes VC-fueld behemoths like Uber.
It isn't so much that Uber can never be profitable, it is that Uber could never be profitable enough to recoup the sunk costs and operate as an attractive publicly-traded company.
Plenty of companies show a profit and remain privately owned. They aren't hypergrowth companies. VCs don't invest in them, except accidentally.
There are, ironically, business models that would have justified some VC investment and led to decent outcomes with a market cap around $1-5B, but they are shaped completely differently, and would have produced much more modest returns.
> Taxi licenses are an artificially constrained resource, which keeps prices high
This is only true for some markets where there is a monopoly or a medallion system. Not all markets are like that, not even all markets Uber operate in. Some of the biggest are though.
Taxi licenses are an artificially constrained resource, which keeps prices high. As a result, taxis are typically only conveniently available in high-demand locations (among other ills).
There probably is a niche for ridehailing services as public infrastructure (or perhaps using a co-op model) running on open source software, but that excludes VC-fueld behemoths like Uber.
It isn't so much that Uber can never be profitable, it is that Uber could never be profitable enough to recoup the sunk costs and operate as an attractive publicly-traded company.
Plenty of companies show a profit and remain privately owned. They aren't hypergrowth companies. VCs don't invest in them, except accidentally.
There are, ironically, business models that would have justified some VC investment and led to decent outcomes with a market cap around $1-5B, but they are shaped completely differently, and would have produced much more modest returns.