That's pretty much the total opposite of what's happening right now. Uber (and the recent group of "tech but not really" unicorns in general) have if anything burnt hundreds of billions of VC/PE money thus directly subsidizing the costs of hundreds of millions of users, for very slim profits at best.
Yes, it's because they are expecting future returns on their "burnt" money. But considering the risks, the enormous amounts involved, the meagre margins involved even in a market dominant postion and that there are still no signs of profitability or even positive cash flow, I don't see how this can be seen as just a wealth transfert from society to the wealthy. Even in their best case scenario, they will be able to get meagre returns from perpetually capital intensive, low margin businesses. That's far from obscene wealth extraction imo.
Sure, some early VCs made tons of money off of this new era of unicorns, but that was pretty much all coming from other VC or private equity that have had to keep the money pump going.
What is also less discussed is that (unlike many other tech platforms) Uber/Lyft facilitates wealth transfer in local economies (to some extent) due to how locally it operates.
Uber has claimed that more than 80% of all the fares ever collected has directly gone to drivers. By creating massive demand mostly in the well-off parts of a city, it opens up a channel for one-to-one wealth transfer to the predominantly less well-off drivers.
This is quite different from other platforms that suck up money from local economies and then disburse most of them to the elite few, or park the cash in some offshore accounts.
I think there's a nuance here that is often lost in this kind of discussion about inequality.
I agree, though that's a whole different subject. VCs are usually a very small share of their portfolios, and I guess the high risks are well known.
But it's true that VCs, private equity and bull markets in general, which people always think of as profiting mostly very rich people are actually essential to fund most retirement plans, pensions and insurances.
Pension funds have traditionally invested very small parts of their portfolios in riskier investments. It's usually done to slightly enhance yield.
But in the past decade pension funds have increased their "alternative" investments since their traditional bread and butter,bonds and fixed income, have had abysmal yields due to low interest rates. Yet with pension payout obligations having only gotten bigger (especially in europe, with the aging population, the pressure to generate returns is pushing the fund managers to seek out riskier and riskier investments.
So, the folks who make money on this massive arbitrage of the welfare state can feel bad on their yachts and the ones who lost money can feel bad on their slightly smaller yachts.
Yes, it's because they are expecting future returns on their "burnt" money. But considering the risks, the enormous amounts involved, the meagre margins involved even in a market dominant postion and that there are still no signs of profitability or even positive cash flow, I don't see how this can be seen as just a wealth transfert from society to the wealthy. Even in their best case scenario, they will be able to get meagre returns from perpetually capital intensive, low margin businesses. That's far from obscene wealth extraction imo.
Sure, some early VCs made tons of money off of this new era of unicorns, but that was pretty much all coming from other VC or private equity that have had to keep the money pump going.