Uber’s dismal profits prove need to cut drivers
Uber tends to present itself as a convenient way to make money on the side as well as a better way to get a taxi. It’s attracted thousands of drivers in droves despite the grey area legality and insurance. It’s carried out millions of rides and won the hearts of many people. So why is it not making any money?
According to a Bloomberg report, Uber posted a loss of $1.27 billion in the first half of 2016. That’s a ridiculous amount of cash to lose and still be considered one of the most successful startups of all time. The company’s massive valuation and fund raising would make it sound as though losing a billion or two every year isn’t a big deal. And right now it probably isn’t, but if a company never makes money you can be sure investors will eventually pack up and leave.
So what could investors possibly see in the company? Probably the huge profits to be made when it replaces the majority of its drivers with self-driving vehicles.
As Gizmodo reports, Uber recently acquired self-driving tech developer Otto and partnered with Volvo to make autonomous cars. It also began testing self-driving car-hailing service in downtown Pittsburgh. Both of these show the company is obviously committing to making self-driving taxis part of its business. And if their cars can drive themselves, they stand to make save a whole lot of money on paying drivers, which is currently their biggest expense. Obviously replacing their drivers would also cost a lot given how many cars they’d need to buy, but once they do they’d likely be able to turn a profit.
With that in mind, the controversy over Uber drivers and insurance seems like a waste of time. And considering the virtual monopoly Uber has on ride-sharing in Canada it’s very likely drivers won’t have any use for a personal ride-sharing insurance policy in a matter of years.