#AskPS
Abhinav Sankar .

What’s wrong with Uber’s business model?

Theoretically, it looks great, but in practice, it loses them billions every quarter.

Is the business model sustainable and they are right now having cash management issues (ex; spending too much on R&D), OR Is the business model just not sustainable at all?

Originally Posted Here
14 Comments

Puneeth Reddy

Commission business are always not profitable. They are just sustainable

Abhinav Sankar

Agreed! Then should change their practice! Why continuing it!

Puneeth Reddy

they are trying to squeeze more money through multiple subscriptions/services. The only thing they are betting are on the volume of consumers. Just like how amazon did it

Abhinav Sankar

Are they getting that much volume which they have vision! In India, I don't think this model is working. Don't know about other countries!

Puneeth Reddy

India is very different country compared to others. Cracking India game is difficult. As Travis himself told his investors that Uber might not turn profitable

Somya Jain

It might have worked till now but

It is very difficult for them to sustain during corona times.

When ppl are going out quite less

Abhinav Sankar

Agreed! Not only during pandemic, they were running in loss before as well! Need to change the strategy!

Harish Ibrahim

>spending too much on R&D

this is where judgements often fails. Time will tell.

Kshitij Patil

While the world was trying to become Uber for X, Uber was trying to be Amazon for Transportation.

But they underestimated the power of bureaucracy and the complexity of managing logistics.

They just focused mainly on loss making for customer acquisition and become a monopoly fast enough to reap all the benefits alone.

That happened easily for Amazon due to the lack of Unionisation and bureaucracy in retail markets.

Abhinav Sankar

Agreed! What changes or improvement you see in their Business model!

Kapil Agarwal

Then y did investors put money in Ola? It was always the same with Uber, just running on investment. Maybe coz their scope was always a selloff! It it was, isnt it a poor thinking? I had always wondered Y

Abhinav Sankar

Yes, thinking was poor! As far as ola is considered, both share a equal market share! Thats why I think they invested there!

Shivam Malhotra

These companies are running only to achieve a scale which makes them profitable in the future.Whether it'll happen or not,idk.But yes I've always hated commission businesses as you'd hardly be able to turn a profit until and unless you've good volume.

Nihar Ranjan

Ola copier business model of Uber and is no more loss they are cash positive company. Nothing wrong with model the problem is obviously with cash management n planning

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