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Growth vs. Profits: Uber’s Cash Burn Dilemma – Knowledge@Wharton

Can Uber slow its rate of cash burn before losses start to threaten the company’s viability? On the surface, stemming the red ink doesn’t sound so hard. Since it does not own vehicles or employ drivers, the company saves a fortune in capital and workforce costs. But Wharton experts point to other substantial costs: In […]

Can Uber slow its rate of cash burn before losses start to threaten the company’s viability? On the surface, stemming the red ink doesn’t sound so hard. Since it does not own vehicles or employ drivers, the company saves a fortune in capital and workforce costs. But Wharton experts point to other substantial costs: In helping to create an innovative new market — the sharing economy — Uber spent a fortune training, recruiting and subsidizing drivers, giving away free rides so consumers would get hooked on the service, setting up a global system of local and regional offices as well as hiring lawyers to deal with lawsuits and regulators.

Source: Growth vs. Profits: Uber’s Cash Burn Dilemma – Knowledge@Wharton

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