Except that Uber is not doing that at all. They do make a gross profit on each ride. Its more like asking if you were successful if you were generating a lot of revenue by selling people dollar bills for $1.15/each, but losing money because of very high operations costs. The answer would be "it depends".
Yes and WeWork was profitable when you use their made up metric "Community Adjusted Ebitda".
Isn't that true for every money losing company? They make money as long as you ignore expenses?
The usual retort is "our addressable market that we have only started to penetrate will allow us to have a large enough marginal profit to cover our fixed cost".
But isn't that also in the pitch deck of every startup looking for funding? "There are x number of dog owners in the world. The total addressable market is ten gajillion if we capture 10% of that we will be worth $some_outrageous_number"
There is a lot of truth to that, and that is a big part of what makes it so difficult to filter out the companies that are criticized legitimately from the ones that are criticized wrongly.
I've been around long enough to recognize that the criticisms often look virtually identical for both cases, so you really have to do a lot of the legwork yourself.
The one thing that I'm confident of with Uber is that they take in more from me as a customer than they pay the driver. Is it enough more to build a sustainable business? Considering the volumes and margin, one would hope so, and frankly I find it hard to understand how their spending is so high. But I've never tried to do the math...
