To paraphrase Margaret Thatcher: “the trouble with negative unit economics is that you eventually run out of other people’s money.”https://twitter.com/sarahmei/status/1193972358366691328 …
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I don't understand why Uber has negative unit economics, though. There was a lot of waste in the taxi system due to bad matching of supply and demand. Do you have any insight into where I'm off?https://twitter.com/tacertain/status/1194124161733419009?s=19 …
1. I’m not sure they do. 2. But assuming they do, it’s not inherent to the business - it’s due to artificially low prices from cheap-capital-fueled competition with Lyft. Once capital dries up, prices will have to rise - we’ll see how (in)elastic demand is and what biz looks like
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Also, what the original tweet was about is why gig economy workers on a given app start off making great money, then regress towards minimum wage. It starts off juiced by cheap capital to build supply side - once demand is in place, needs better unit economics to survive.
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