For most of the last decade we have enjoyed relatively cheap trips from ride sharing companies. While surge pricing could hit from time to time, for the most part rides were so affordable cities saw a drop in the use of public transportation.
Now gas prices are surging, inflation is on the rise and the labor market is so tight, workers are less likely to need a side hustle.
But there is a driving force beyond those factors that could put the brakes on cheap rides – profit.
According to Slate, since Uber was founded in 2009 it has lost $30 billion.
While that is a jaw-dropping figure, it is not unusual for a tech startup. The companies use venture capital to offer a service below cost to create demand and corner a market.
According to The Atlantic, investors were OK with this arrangement with near zero interest rates, investors took more long-term bets. They were willing to fund aggressive expansion if it meant getting in on the next Amazon on the ground floor.
Now interest rates are up and investors want those money-losing startups to start making some money. That means we will all be paying more for that ride home from the club.