I paid USD 70 for a ride to the airport. I asked the driver how much he got. “Benti-cinco”, he replied. That’s 25 for Spanish! “¿Cuarenta y cinco (45) por Lyft?”, I asked in my broken Spanish to confirm. “Si”, he replied.
I could not believe my ears. The story is same with Uber. When the ride-sharing companies started, they were taking ~15% cut. Now, they are taking anywhere from 50 to 60% of the cut. Even if ~10% of this is taxes, the take rate of the app has increased significantly. And the stock market loves the Uber and Lyft stock.
Now, you might be shocked and wonder what if the government stepped in and restricted the take rate. Well, that’s what happened with the healthcare.
The health insurance companies are restricted to take no more than 20% of the revenue. The only way for their revenues to grow is to charge higher premiums!
And that’s where lies the Achilles heel of American capitalism. All publicly traded companies are required to increase their earnings (net income). Once you have exhausted the customer base, you can either grow by squeezing your suppliers (in the case of ride-sharing) or by continuously increasing the premium for your customers (in the case of health care) and sometimes both.
The public market dislikes stagnating earnings. And sooner or later, the companies suffer a leveraged buyout, leading to the replacement of the CEO with someone who is willing to play the game and the enshittification continues.