Can Uber ever make money?

LONDON CABBIES enjoy a good moan. But few can match the satirical indignation of a former ferry operator, John Taylor, who used to carry passengers on the Thames. As well as being a “waterman”, Taylor was a poet, writing in the 1620s just when horse-drawn Hackney carriages were making their debut on the streets of the capital. In “An Arrant Thief”, published in 1622, he described the carnage from “upstart Hell-cart-coaches” robbing his brethren of their fares. “Against the ground, we stand and knock our heels/Whilst all our profit runs away on wheels.”

Four centuries later, profits across the global taxi industry are again running away—but this time into thin air. Until recently, the fortunes of regulated cab companies drew the most attention. Uber and Lyft in America, Didi in China and other ride-hailing firms elsewhere have used sackloads of venture capital to drive down fares and flood the streets of big cities with cars, clobbering the earnings of licensed rivals. But now their own losses are in the spotlight. In a filing released in the run-up to its initial public offering, Uber says it has lost $7.9bn since 2009. Lyft, which listed last month, lost $2.9bn in seven years. Uber is seeking a valuation of up to $100bn but as yet it is unclear if it can make money. To understand why, it helps to look at the history of the taxi...



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