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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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
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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I get that (lived through it at Amazon!). I think, though, that there is more to the story. I think as the sole residual claimant, capital has gotten really good at making that residual as large as possible, unsurprisingly. And competition isn't balancing that very well right 1/2
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now. But probably I've started something that isn't easily discussed in 280-char chunks, at least not without a lot more time to edit than I have with my re:Invent presentation looming! If you're ever in Seattle (or at re:Invent) and want to chat more, let me know!
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