The True Cost of Your Uber Ride Is Much Higher Than You Think
Like most cheap commodities, what you’re paying for the sausage might not reflect the actual cost it takes to make it.
Transportation industry expert Hubert Horan is building a case for why Uber will never become a profitable company on the Naked Capitalism blog. One of the most eyebrow-raising statistics, as gleaned from investor reports, is how little riders are paying of the true cost of their trips: “Uber passengers were paying only 41% of the actual cost of their trips; Uber was using these massive subsidies to undercut the fares and provide more capacity than the competitors who had to cover 100% of their costs out of passenger fares.”
That means your $25 trip into Manhattan from Brooklyn should actually cost around $60. Investors in the private company are currently footing the other $35 (most!) of your fare.