Fighting a loss making business

Uber follows the Amazon tactic of hurting the market with its deep pockets

Having deep pockets is a great help in business as the online cab war in San Francisco shows.

As competition heats up on the streets of San Francisco, Uber is trying to put Lyft out of business by offering fares below what they pay drivers.

This has been the long term tactic of Amazon; raise a lot of money and then run your main line of business at a loss.

Amazon have shown you can do this for a long time if investors stay patient. Fighting it is difficult if you don’t have deep pockets yourself.

In the long term though you can’t see this being good for customers, although in the meantime San Franciscans can enjoy cheap taxis.

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Author: Paul Wallbank

Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the smartcompany.com.au website and has published seven books.

One thought on “Fighting a loss making business”

  1. this is much like countries dumping goods at below cost to keep their employees busy and factories open – in time once local providers are crushed, prices will rise and a monopoly will be born

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