Uber and Lyft say they're ending services in Minneapolis over a city-mandated driver pay increase. The city council pushed through the measure to bring driver pay closer to the local minimum wage of $15.57 an hour.
It’s relatively cheap to maintain the service. What costs money is marketing and expanding that service. That’s what most people are working on.
Remember, Lyft and Uber have thousands and thousands of people giving them money every day. They don’t even maintain the cars, they just take a cut off the top. Sometimes greater than 50% of the ride.
They are making a ton of money, but they are also wasting it on new markets, new features, and Superbowl ads. They could easily just charge a little more in Minneapolis to make the same money, but they don’t want the drivers to win.
“Maintaining” means more than just leasing out a few server farms. It also means hiring software engineers, customer/driver support staffs, HR, legal teams, designers, etc, all of which are required to keep the day-to-day going. Uber and Lyft aren’t small operations, by any means. They are monstrously huge projects that require a lot of bandwidth - both technical and human - in order to keep the lights on.
For what it’s worth, Uber, Lyft, DoorDash, and pretty much every gig app out there have all operated at a net loss from the very beginning. It’s not just expensive to maintain the service, it’s impossibly expensive.
You’re right even though you’re getting down voted.
Doesn’t make Uber or Lyft any less shady of a company but so many people have no idea of the overhead it takes to “run an app”. They think that it’s just some computers talking over the Internet that they pay 100$ a month for and not the possible 100’s of thousands of dollars they pay monthly for the infrastructure to support those apps.
It’s not an offline game that someone can just download and play, it’s a live service that is running, plus all of the data whether financial or otherwise that is being stored on multiple levels of backups not to mention the security infrastructure that needs to be maintained etc etc etc.
That being said, I’m not defending these companies in the slightest, but for someone to just say “run an app” is a massive understatement.
You’re right even though you’re getting down voted.
Par for the course at LemmyWorld. Redditors brought their Redditor attitudes to LW and downvote anything they could possibly conceive as corpo sympathizing.
And at least Lyft is sending emails to customers making it sound like paying a decent wage makes their business model unsustainable.
Which is weird because what’s their overhead? They run an app. 99% should be going to drivers.
They have to pay hundreds of millions a year bribing politicians across the world!
Yeah, apps that offer a live service across the globe 24/7 definitely run themselves. It’s just a silly little computer, after all. Totally.
It’s relatively cheap to maintain the service. What costs money is marketing and expanding that service. That’s what most people are working on.
Remember, Lyft and Uber have thousands and thousands of people giving them money every day. They don’t even maintain the cars, they just take a cut off the top. Sometimes greater than 50% of the ride.
They are making a ton of money, but they are also wasting it on new markets, new features, and Superbowl ads. They could easily just charge a little more in Minneapolis to make the same money, but they don’t want the drivers to win.
“Maintaining” means more than just leasing out a few server farms. It also means hiring software engineers, customer/driver support staffs, HR, legal teams, designers, etc, all of which are required to keep the day-to-day going. Uber and Lyft aren’t small operations, by any means. They are monstrously huge projects that require a lot of bandwidth - both technical and human - in order to keep the lights on.
For what it’s worth, Uber, Lyft, DoorDash, and pretty much every gig app out there have all operated at a net loss from the very beginning. It’s not just expensive to maintain the service, it’s impossibly expensive.
It’s not impossibly expensive. Uber is a public company and you can just read their annual reports. Their gross profit margin ranges from 38% to 45%.
They spend $4 to $5 billion every year on sales and marketing, more than any category besides cost of revenue (actually running the app).
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/bbb206f1-a6ba-4521-82cf-ae2d4011057f.html#
No, they are not just trying to keep the lights on.
You’re right even though you’re getting down voted.
Doesn’t make Uber or Lyft any less shady of a company but so many people have no idea of the overhead it takes to “run an app”. They think that it’s just some computers talking over the Internet that they pay 100$ a month for and not the possible 100’s of thousands of dollars they pay monthly for the infrastructure to support those apps.
It’s not an offline game that someone can just download and play, it’s a live service that is running, plus all of the data whether financial or otherwise that is being stored on multiple levels of backups not to mention the security infrastructure that needs to be maintained etc etc etc.
That being said, I’m not defending these companies in the slightest, but for someone to just say “run an app” is a massive understatement.
Par for the course at LemmyWorld. Redditors brought their Redditor attitudes to LW and downvote anything they could possibly conceive as corpo sympathizing.
Card fees, keeping it updated, onboarding drivers and doing checks, accounting for fraud, employees, advertising. 99% is a silly figure to request.
It is already unsustainable, they are losing money