Uber and Lyft’s new road: Fewer drivers, thrifty riders and jittery investors
I just do not understand how ridesharing cannot turn a profit. Let&#x27;s look at unit economics:<p>~25% take rate on a ride ($15 average): $3.75 take<p>Payment processing: 2.5% + 30c = $0.68<p>Servers &#x2F; datacenters: $0.20 (for a margin-sensitive business, you should be colo&#x27;ing your own servers, or using cheap alternatives like OVH&#x2F;Hertzner)<p>Customer support: Automate as much as possible (auto refunds up to a certain point; for lost items, connect directly to driver); assume 1 in 50 rides require manual human support with a $3 cost = $0.06 support cost per ride<p>Fraud&#x2F;refunds: Assume a 2% fraud rate that cannot be reclaimed; thus $0.30 cost for fraud. Refunds for things like driver purposefully took a longer route can be clawed from the driver.<p>Gross COGS: $1.24<p>Gross profit: $2.51<p>What am I missing?? Marketing? Fuck marketing when you can&#x27;t turn a profit. Everyone knows about Uber or Lyft already, you need to turn a profit, not waste $30 per CAC.