On does not mean "you", but sometimes (and I think not in this case, see Rémi Henry's answer) it can be translated into English as "you". But this is to do with English, not French.
It appears that in Proto-Indo-European, verbs had forms, almost containing an r, to make the passive voice:
This r gives a clue to the origin, as lots of words for people, in lots of languages, contain an r, e.g. mère, docteur. So if r means "person" or "one"/"on" then perdor means
"A person loses me" or "one loses" me
and this becomes the passive.
But modern languages have lost this synthetic (one word) passive, so we use various circumlocutions such as
On me perd
Je me perds
Je suis perdu
I am lost
I have been lost
One loses/is losing me
You lose me
None of these is an exact translation of "perdor", so when translating from French to English one has to/you have to (just to demonstrate how we often use "you" instead of "one") use your judgment as to which is best. Further, it is not always easy to tell if it is a genuine passive sense. For example, "je me perds" could just mean "I lose myself" and "you lose me" could just mean "vous me perdez".