Why Uber Isn’t a Viable Business Model

25.01.2017 • Tech

Olivier Perrin – The Brave Little Economist (Switzerland) –

Dear reader,

Pietro is Italian and taxi driver. He has 75 years, a crazy class and a plan for the nic UBER .

He has partnered with 10 other drivers. He has lowered his rates by 30% and rents an application “like Uber” for 50 € a month … And in addition he answers the phone.

What does he do to make himself known? He makes “the Uber”, to each customer that brings him Uber, he gives his business card and I can assure you that it works, at least with me who has carefully stored his business card and downloaded his application.

Uber’s current model is not viable

UBER lost $ 3 billion in 2016 and $ 4.5 billion since its inception. The company withdrew from the Chinese market after a memorable fiasco. It provokes the anger of drivers in France and politicians in many cities of the world.

Yet the Corporation é is valued $ 67 billion .

Warning, this does not mean it is worth it. This means that some investors have paid a fraction of that price to have the right to own the same fraction of the business.

This means, above all, that these investors will do everything possible to make their investment profitable: that is to say that Uber will have to find more than 70 billion profits in the years to come (it is also necessary to dry The losses), much more even to ensure substantial added value to these gentlemen of Silicon Valley and Goldman Sachs.

But what has Uber that justifies that we pay him 70 billion more than Pietro who is not far from being able to provide 90% of Uber’s service for an investment that 10 taxi drivers can line up?

My name is Olivier Perrin and I am the Vaillant Petit Économiste. Starting today, I tell you all these little secrets that the experts seen on TV hide you carefully.

-Read more at www.le-vaillant-petit-economiste.com (French)-

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