No, they re-invest their excess revenue straight into the company. Uber could become profitable any day they want, just like Amazon could choose to become much more profitable than they are. It's a buisness tactic.
Uber purposely under charges riders to entice them. Raising the price of a ride to a fair market value would boost their revenue. Cutting their r&d research would bring in massive revenue, or coming out with a successful autonomous self-driving vehicle would bring in billions and skyrocket the stock.
These aren't companies struggling on the vine.
I don’t agree with this assessment. I haven’t looked in a year or so, but last I checked Uber had negative cost of revenue, meaning that what they pay drivers + incremental operational expense is costing them more then it’s making them. This means cutting sales & r&d wont save them.
Now it’s true they could raise their prices and keep a higher margin of that for themselves, but there’s no proof that at higher costs people will continue to use their service rather then a bus, a train or a competing company. So if revenue craters they’ll die.
In short they aren’t “investing excess revenue” because there is none. They’re being propped up by constantly diluting existing shareholders. But eventually, if they don’t find a way to make money, there won’t be a greater fool to sell to and they will crash and burn.
