Uber, Mahir Desai, Facebook discussed on Marketplace
You. Now. The latest tech IPO Uber started trading today. The most anticipated initial public offering since Facebook probably right didn't go so good off seven and a half percent on day. One rival lift meanwhile has lost nearly a third of its value since it went public back in March. Yes, the markets have been turbulent of late, but we asked marketplace's Kimberly Adams to unpack. Why investors are really a little jittery about the ride sharing business. Look investing in an IPO is a gamble buying. Any stock is really, but you wanna be somewhat confident that gamble is going to pay off down the road. Which is why people are looking hard at Uber's business model it is money losing right now, which is just as saying they're paying us to use. It Mahir Desai is a finance and law, professor at Harvard. He points out that Uber has been subsidizing rides paying bonuses to drivers and covering other. Big. Expenses with venture capital at first and now capital from the equity markets bat is sustainable for a little while while you're growing the question is whether they can get off ever doing that to actually start making money. Uber will likely have to raise prices for writers. And cut driver pay says Rachel binder who covers the motivation mobility industries for CB insights. And ultimately the way that the company will become profitable is largely dependent on his they can get rid of the drivers completely which will rely on self driving technology, and there's not really a firm timetable for when that will happen, or when it does how much money it will actually save Henry Campbell drives for Uber, and lift and blogs at the rideshare guy companies are talking about the self-driving narrative. But until they don't need drivers. They really need drivers more than anything drivers who want their own piece of Uber's potential profitability and even.