Uber contends it is a software company. A software firm can elude onerous transport regulations. But more importantly, it can get more investor capital early on— software monopolies have big profit margins, transportation firms do not.

In their infancy, software firms tend to favor user growth over profitability. The marginal cost of adding just one customer is nearly zero; the main cost is in writing and maintaining the software, which does not increase linearly with adding customers. As Mark Suster puts it, an unprofitable software startup may simply be growing their staff ahead of revenue.

https://medium.com/@AsherOfLA/ubers-...y-e3b6a9561d14