Yeah, but they never really systematically subsidised fares as such, except for some one-off bonuses to attract divers and stuff like that, in the sense that they didn’t systematically pay drivers more than people were paying per ride. They subsidised it in the sense that the cut they took didn’t cover their development costs, servers, marketing, etc. But those costs don’t increase linearly per customer and they also plateau as the software stack matures, so there’s a path to just raising prices and getting to profit, and each additional customer brought them closer to profit even while the subsidies existed.
OpenAI and Anthropic are paying something like 10x the amount for inference as they get from subscriptions, let alone free usage and training costs. So each new customer is taking them further from being profitable. And if they jacked up the prices 10x, so that the basic subscriptions were a few hundred and the pro ones a few thousand a month, they would still be in the position that Uber was when they were doing the subsidies for their infrastructure. I think it’s fairly obvious that they wouldn’t be acquiring customers very quickly at those prices.
Yeah, but they never really systematically subsidised fares as such, except for some one-off bonuses to attract divers and stuff like that, in the sense that they didn’t systematically pay drivers more than people were paying per ride. They subsidised it in the sense that the cut they took didn’t cover their development costs, servers, marketing, etc. But those costs don’t increase linearly per customer and they also plateau as the software stack matures, so there’s a path to just raising prices and getting to profit, and each additional customer brought them closer to profit even while the subsidies existed.
OpenAI and Anthropic are paying something like 10x the amount for inference as they get from subscriptions, let alone free usage and training costs. So each new customer is taking them further from being profitable. And if they jacked up the prices 10x, so that the basic subscriptions were a few hundred and the pro ones a few thousand a month, they would still be in the position that Uber was when they were doing the subsidies for their infrastructure. I think it’s fairly obvious that they wouldn’t be acquiring customers very quickly at those prices.