RSG069: Will Uber Ever Be Profitable? An Interview with Len Sherman

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If you comply with our weekly round ups, you’ve in all probability observed a number of articles about Uber’s profitability – or lack thereof. Today, I interview Professor Len Sherman of the Columbia Business School about an article he wrote titled “Why Can’t Uber Make Money?” We talk about Uber’s profitability, its enterprise mannequin, and its long run prospects on this episode.

I interview Professor Len Sherman of the Columbia Business School about an article he wrote titled "Why Can't Uber Make Money?" We discuss Uber's profitability, its business model, and its long term prospects in this episode.

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If you’d wish to learn a transcript of this podcast, please click here.

Intro

  • Uber has been rising at an exponential tempo over the previous few years
  • While they’re rising, they’re additionally dropping extra money than ever
  • Can Uber flip it round?
  • Today, I’m chatting with Len Sherman about Uber’s profitability
  • You can all the time hedge your bets with rideshare driving by driving supply! Sign up at this time with DoorDash and Postmates

Interview with Len Sherman

  • Len Sherman is an government in residence and adjunct professor at Columbia Business School, a Forbes contributor and writer
  • Len wrote an insightful piece on Uber’s profitability (or lack thereof) titled “Why Can’t Uber Make Money?
  • Got began with Uber and Lyft as a buyer first
  • Uber’s measurement and losses first attracted Len’s consideration

Why is Uber Losing Money?

  • Needed to look into Uber’s marketing strategy first
  • What do they do that permits them to sustainably absorb extra revenues than they’ve prices?
  • Uber’s marketing strategy appears nice at first: they’re getting buyers, there are some driver prices, however buyer acquisition prices appear low – nice, proper?
  • Not precisely – why are they nonetheless dropping billions?
  • Len’s article explains the difficulty extra in depth, however one problem is that the taxi industry itself just isn’t a high-profit market

Is Profitability in Uber’s Future?

  • Back when the taxi industry was unregulated, it wasn’t worthwhile
  • Regulation helped to limit provide and led to greater income for regulated taxi drivers
  • If they keep on their present course, Uber might stay unprofitable – or worse

How Could Uber Turn it Around?

  • Need to re-trench – might have to shrink with a view to develop
  • Uber and Lyft might have to work it out extra collectively – no race to the underside
  • Look on the airline industry: positive, we’re crammed into extra seats with much less room, however airways are surviving and profiting
  • Uber must give attention to its drivers, too – it’s a service-industry and having disgruntled drivers doesn’t assist their service focus

Final Thoughts on Uber

  • Uber goes to need to get worthwhile earlier than they go public
  • Right now, the financials don’t make sense to go public and succeed
  • To study extra about Len Sherman and skim his books/articles, please visit his website here

Outro

  • Big thanks to Len Sherman for approaching and sharing his ideas on Uber’s profitability with us
  • His article was one of many most astute analyses I’ve seen of Uber’s profitability from somebody with the credibility of a Columbia Business School professor
  • Len provides us rather a lot to consider relating to Uber’s profitability and even viability sooner or later, however these robust questions have to be requested to allow them to be addressed
  • If you need to give supply a shot, take a look at DoorDash and Postmates
  • Follow me on FacebookTwitter and YouTube and you may all the time contact me when you’ve got questions – I like to listen to from you all!

Show Notes

If you’d wish to learn a transcript of this podcast, please click here.

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-Harry @ RSG

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I am Harry, the proprietor and founding father of The Rideshare Guy Blog and Podcast. I was a full-time engineer however now I am a rideshare blogger! I write about my expertise driving for Uber, Lyft, and different providers and my objective is to assist drivers earn extra money by working smarter, not more durable.

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