Uber Says Sales Growth Outpaces Losses(bloomberg.com)
bloomberg.com
Uber Says Sales Growth Outpaces Losses
https://www.bloomberg.com/news/articles/2017-04-14/embattled-uber-reports-strong-sales-growth-as-losses-continue
140 comments
> Uber said it uses generally accepted accounting principles. Revenue includes only the portion Uber takes from fares, except in the case of its carpooling service; the company counts the entire amount of an UberPool fare as revenue.
Does this mean Uber technically recognizes more revenue from from a $6 UberPool ride than a $20 UberX ride?
Does this mean Uber technically recognizes more revenue from from a $6 UberPool ride than a $20 UberX ride?
Uber drivers are contractors (or, at least that's what Uber claims), who are paid by customers and give Uber a cut.
In the car of Pool, Uber hires the driver.
In the car of Pool, Uber hires the driver.
That sentence seems like its intention is to confuse the reader. To me it means for UberX: Fare - Cost = Revenue, and for UberPool: Fare = Revenue.
Fare less costs should be profit, not revenue. The only way this makes sense is if uber believes they are charging drivers for getting them customers, but believes that they directly operating the carpool. There's probably some language somewhere in codification that says "significant involvement" or "more than not" or something like that requiring them to treat them differently.
I think so!
Can someone explain how GAAP would consider only Uber's share of an UberX revenue, but the entirety of an UberPool as revenue? This doesn't really make sense to me.
Drivers are charged a percentage-fee for Uber's share of the ride in UberX. In Uber Pool, the driver is paid by Uber (as opposed to just through Uber) a variable amount that is not as easy for us on the outside to calculate as the percentage model.
And that somehow justifies Uber saying that all UberPool money collected is revenue? Because the math is hard?
This company is like a Russian nesting doll shell game. There's more in each layer and every layer is a distraction.
This company is like a Russian nesting doll shell game. There's more in each layer and every layer is a distraction.
I don't think there's anything hard about computing this, but in the normal case companies report all the money they collect as revenue, and then subtract costs to show their profits.
In the marketplace case this is deceitful because the marketplace owner doesn't really have a way to bring the costs of the product down, so it's much more realistic to only consider their margin as revenue.
In the UberPool case I think there's a reasonable argument to be made that since they are paying drivers a flat fee, but charging users based on dynamic pricing and packing a variable number of people in each vehicle Uber has more flexibility in terms of how it provides the service to customers, the top line number of how much they are charging users is more reasonable. Uber cuts their costs on an UberPool ride in half every time they put two groups in the same car.
You would really want to see the data broken out by category if you were an investor, since mixing the two types in the revenue number is sort of meaningless since we don't know the split, but we're not exactly in a position to demand financials.
Still, I think this data shows a much rosier picture than HN wants to paint about how "Uber is losing money on every ride"/"Selling 2 dollar bills for $1" etc. the 2.8B loss is huge, but when you look at it compared to the $20B bookings number, you can see that they're not significantly subsidizing rides, but rather using their war chest to compete on price. They only need a 15% price increase to become profitable, which shows their prices are in the right ballpark, even if they're not profitable right now.
I do wonder if this is essentially a move to try and compete more effectively for talent that, besides being outraged, may be starting to believe HN about how likely Uber is to fail.
In the marketplace case this is deceitful because the marketplace owner doesn't really have a way to bring the costs of the product down, so it's much more realistic to only consider their margin as revenue.
In the UberPool case I think there's a reasonable argument to be made that since they are paying drivers a flat fee, but charging users based on dynamic pricing and packing a variable number of people in each vehicle Uber has more flexibility in terms of how it provides the service to customers, the top line number of how much they are charging users is more reasonable. Uber cuts their costs on an UberPool ride in half every time they put two groups in the same car.
You would really want to see the data broken out by category if you were an investor, since mixing the two types in the revenue number is sort of meaningless since we don't know the split, but we're not exactly in a position to demand financials.
Still, I think this data shows a much rosier picture than HN wants to paint about how "Uber is losing money on every ride"/"Selling 2 dollar bills for $1" etc. the 2.8B loss is huge, but when you look at it compared to the $20B bookings number, you can see that they're not significantly subsidizing rides, but rather using their war chest to compete on price. They only need a 15% price increase to become profitable, which shows their prices are in the right ballpark, even if they're not profitable right now.
I do wonder if this is essentially a move to try and compete more effectively for talent that, besides being outraged, may be starting to believe HN about how likely Uber is to fail.
Didn't the article the other day about how Uber is "cheating" drivers show the drivers are paid distance+time and not just a % of the rider's fare?
Ah. So a driver doesn't just get a simple 75% cut of an UberPool fare. That actually makes a lot of sense. Thanks.
I think it's a question of Uber's role in the transaction, and whether they're considered an "Agent" of the seller (the driver), or the transaction's principal.
I think this is a matter of accounting judgment.
I'm not an accountant, but I remember reading somewhere that pure agency transactions have different accounting treatment vs. "principal" transactions where the party in question assumes more risk and is not acting strictly as a representative of another party (the UberX driver).
[1] http://www.journalofaccountancy.com/news/2015/aug/fasb-propo...
I think this is a matter of accounting judgment.
I'm not an accountant, but I remember reading somewhere that pure agency transactions have different accounting treatment vs. "principal" transactions where the party in question assumes more risk and is not acting strictly as a representative of another party (the UberX driver).
[1] http://www.journalofaccountancy.com/news/2015/aug/fasb-propo...
This is probably basically about the fact that driver portion is more complicated in UberPool than in the rest of their services.
It's to Uber's credit that on an ordinary ride, they don't try to claim that they have revenue equal to the entire fare. That would be an easy way for them to make their top-line financials look way more palatable than they actually are (ie, that they lost about $3B on $20B, rather than $3B on $7B).
But it may be genuinely hard to report on just the share of UberPool revenue that does not go to the driver, as my understanding is that the calculation is much more complicated in that case.
It's to Uber's credit that on an ordinary ride, they don't try to claim that they have revenue equal to the entire fare. That would be an easy way for them to make their top-line financials look way more palatable than they actually are (ie, that they lost about $3B on $20B, rather than $3B on $7B).
But it may be genuinely hard to report on just the share of UberPool revenue that does not go to the driver, as my understanding is that the calculation is much more complicated in that case.
Uh, that seems like something they'd get called out on pretty quickly if they tried, and would make them look worse off with the actual number than if they just opened with it
Uber's gotten away with a lot of stuff but I doubt even they could pull a 'whoops, forgot our expenses' sleight of hand. Especially since they try and frame drivers as 'contractors' and not employees
Uber's gotten away with a lot of stuff but I doubt even they could pull a 'whoops, forgot our expenses' sleight of hand. Especially since they try and frame drivers as 'contractors' and not employees
Revenue, not profit. They wouldn't be saying that they forgot about expenses, just that their expenses come out of $20B in revenue, not $7B in revenue.
Probably not to their credit, it's something their auditors wouldn't accept because it's fairly straightforward accounting.
These aren't security filings or for their investors. It's to the press. Nobody external is forcing them to account for anything in any particular way that's not blatantly fraudulent.
Yes, and they would take a corresponding gross margin hit as the driver's payment comes from revenue rather than being accounted for before it.
I do not think this a shell game to make the revenue number larger. The way drivers are paid while driving UberX vs. Uber Pool is different, and that probably has accounting rule impact.
I do not think this a shell game to make the revenue number larger. The way drivers are paid while driving UberX vs. Uber Pool is different, and that probably has accounting rule impact.
GAAP doesn't have to include stock based compensation as a normal expense. If you throw in the fact that Uber compensates at 50% in stock this is probably a shell game.
That's not true: https://www.fool.com/investing/2017/04/14/okta-inc-ipo-what-....
If you're using GAAP, you have to include stock-based compensation as a cost. There are, however, a lot of tech companies that try and spin non-GAAP earnings by removing stock-based compensation, which can paint a very different picture (e.g., Salesforce)
If you're using GAAP, you have to include stock-based compensation as a cost. There are, however, a lot of tech companies that try and spin non-GAAP earnings by removing stock-based compensation, which can paint a very different picture (e.g., Salesforce)
There has never been an above razor thin profit line for fleet vehicle operations. Uber is a subsidized taxi company. They charge people from A TO B and take a cut of the fare. The fares are so low compared to taxis because of this subsidization. The only way they survive as this app form of a taxi is by drastically raising fares. They will be too far behind the driverless car race and crash there as well. Let alone the truth of the matter is, the technology is waaaaaaaay farther away on driverless. Read Financial Times 7 part series on Uber. They're the only ones truly on top of this sham of a company.
Do you have the link to the FT series? I can't find anything on Google.
The parent poster is probably referring to the Naked Capitalism series, not FT. That series is now up to 9 parts:
Part 1: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...
Part 2: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 3: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 4: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 5: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 6: http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
Part 7: http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
Part 8: http://www.nakedcapitalism.com/2017/02/can-uber-ever-deliver...
Part 9: http://www.nakedcapitalism.com/2017/03/can-uber-ever-deliver...
Part 1: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...
Part 2: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 3: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 4: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 5: http://www.nakedcapitalism.com/2016/12/can-uber-ever-deliver...
Part 6: http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
Part 7: http://www.nakedcapitalism.com/2017/01/can-uber-ever-deliver...
Part 8: http://www.nakedcapitalism.com/2017/02/can-uber-ever-deliver...
Part 9: http://www.nakedcapitalism.com/2017/03/can-uber-ever-deliver...
Didn't all of the "scandals" start in Q4 2016 in the first place?
This is basically saying, look we were on a good trajectory from Q3-Q4.
But the question is, what happened after that?
This is basically saying, look we were on a good trajectory from Q3-Q4.
But the question is, what happened after that?
There were "scandals" almost continuously, every other month since 2014 or earlier. For some reason though, a lot more people started paying attention only after the Susan Fowler debacle.
None of that seems to have impacted Uber anyway, not meaningfully.
None of that seems to have impacted Uber anyway, not meaningfully.
No, it started in Feb 2017.
“We’re fortunate to have a healthy and growing business"
In the same way that going down the street kicking dogs is 'healthy', in that it's a good leg work out.
It's not sustainable, as sooner or later you'll go to jail, but they didn't say sustainable :)
It's not sustainable, as sooner or later you'll go to jail, but they didn't say sustainable :)
The naivety on HN is staggering sometimes.
Imagine your parents give you a $10 loan to start a lemonade stand. You think you need six years to make them an above market return on their investment of 2x.
You're gonna buy cups, lemons, sugar, and water.
In the first year you think you're going to spend $3 and make $0.
So you have $7 in the bank.
In the second year you think you're gonna spend $2, and make $1.
So you have $6 in the bank.
In the third year you think you're gonna spend $6, and make $4.
So you have $4 in the bank.
In the fourth year you think you're gonna spend $6, and make $6.
So you still have $4 in the bank.
In the fifth year you think you're gonna spend $6 and make $10.
And now you're profitable. In the sixth year you spend $6 and make $50. You pay back 2x your parents' money.
As long as you were hitting your targets, that loan looks like smart business from you and your parents are pleased that their investment outperformed the market and generated a huge return.
If you had trouble hitting your targets, or needed to raise more money unexpectedly, your parents might have said that they'd want a higher return or more security (equity) in the business. But if you're executing on your plan, then that's not gonna happen.
Businesses operate with debt all the time. Some businesses are lossmaking for a long time. Some businesses are lossmaking on billions of dollars of revenue. They have high central costs. They have high R&D costs. They have marketing strategies which require them to subsidise entry-level products and upsell.
The business is healthy provided the following things are true:
1. They've agreed a strategy and milestones with their investors and board,
2. They are hitting those milestones by executing on that strategy.
3. They aren't running out of money ahead of schedule, or running out of money on specific instruments ahead of schedule (for example they have debt financing with Goldman which I'm assuming is being used to acquire smaller companies or subsidise driver fares since that would be expensive to do out of equity).
4. The investors are prepared to honour their agreement to fund the company and truly believe in the milestones and objectives the board has voted on.
Uber has raised $15 billion to date.
In 2012 it lost $20m, in 2013 $15m, in 2014 it lost around $650m, in 2015 it lost $1.5bn, in 2016 it lost $2.8bn.
The business has burned $5bn give or take, or 33% of its total capital raise to date.
Let's say that the losses are understated and they've actually lost closer to $7bn.
They have ~$8bn in the bank or on credit. They have a team of 6,700 which let's say is 45% engineering, R&D, product and the remainder have a linear relationship to the busyness and scale of the business.
They don't have to think about raising money until the middle or end of next year. They could cut their workforce if they needed to get to profitability quickly for some reason.
You or I might not be comfortable running a business with a $2.8bn loss, but nobody on here bats an eye when a YC company loses a a million dollars on a couple of million of revenue with a few million more in the bank. But as soon as it's a b and not an m, people lose their minds.
Imagine your parents give you a $10 loan to start a lemonade stand. You think you need six years to make them an above market return on their investment of 2x.
You're gonna buy cups, lemons, sugar, and water.
In the first year you think you're going to spend $3 and make $0.
So you have $7 in the bank.
In the second year you think you're gonna spend $2, and make $1.
So you have $6 in the bank.
In the third year you think you're gonna spend $6, and make $4.
So you have $4 in the bank.
In the fourth year you think you're gonna spend $6, and make $6.
So you still have $4 in the bank.
In the fifth year you think you're gonna spend $6 and make $10.
And now you're profitable. In the sixth year you spend $6 and make $50. You pay back 2x your parents' money.
As long as you were hitting your targets, that loan looks like smart business from you and your parents are pleased that their investment outperformed the market and generated a huge return.
If you had trouble hitting your targets, or needed to raise more money unexpectedly, your parents might have said that they'd want a higher return or more security (equity) in the business. But if you're executing on your plan, then that's not gonna happen.
Businesses operate with debt all the time. Some businesses are lossmaking for a long time. Some businesses are lossmaking on billions of dollars of revenue. They have high central costs. They have high R&D costs. They have marketing strategies which require them to subsidise entry-level products and upsell.
The business is healthy provided the following things are true:
1. They've agreed a strategy and milestones with their investors and board,
2. They are hitting those milestones by executing on that strategy.
3. They aren't running out of money ahead of schedule, or running out of money on specific instruments ahead of schedule (for example they have debt financing with Goldman which I'm assuming is being used to acquire smaller companies or subsidise driver fares since that would be expensive to do out of equity).
4. The investors are prepared to honour their agreement to fund the company and truly believe in the milestones and objectives the board has voted on.
Uber has raised $15 billion to date.
In 2012 it lost $20m, in 2013 $15m, in 2014 it lost around $650m, in 2015 it lost $1.5bn, in 2016 it lost $2.8bn.
The business has burned $5bn give or take, or 33% of its total capital raise to date.
Let's say that the losses are understated and they've actually lost closer to $7bn.
They have ~$8bn in the bank or on credit. They have a team of 6,700 which let's say is 45% engineering, R&D, product and the remainder have a linear relationship to the busyness and scale of the business.
They don't have to think about raising money until the middle or end of next year. They could cut their workforce if they needed to get to profitability quickly for some reason.
You or I might not be comfortable running a business with a $2.8bn loss, but nobody on here bats an eye when a YC company loses a a million dollars on a couple of million of revenue with a few million more in the bank. But as soon as it's a b and not an m, people lose their minds.
> The naivety on HN is staggering sometimes.
This is pretty arrogant given that you're trying to prognosticate something that historically isn't predictable, the financial outcome of a company.
What you neglect to acknowledge in your post is that the there is a lot of signaling from Travis about his ethics being questionable, existing investors want to get their money out so there's no assurances they're being ethical, it's not impossible that Uber will come out as playing Enron accounting games.
This is pretty arrogant given that you're trying to prognosticate something that historically isn't predictable, the financial outcome of a company.
What you neglect to acknowledge in your post is that the there is a lot of signaling from Travis about his ethics being questionable, existing investors want to get their money out so there's no assurances they're being ethical, it's not impossible that Uber will come out as playing Enron accounting games.
> This is pretty arrogant given that you're trying to prognosticate something that historically isn't predictable, the financial outcome of a company.
In my view it's less arrogant than OP is being naive. My point is not that Uber is going to have a certain financial outcome, it's that people are losing their minds because it's large numbers. Losing $3bn on $6bn of revenue is "unhealthy" but if they were losing $3m on $6m people wouldn't give a shit.
> there is a lot of signaling from Travis about his ethics being questionable
Yes.
> existing investors want to get their money out
The Kapors are seed investors. I don't think any of the institutions who have put in the bulk of the $15bn raised have suggested that they want their money back.
In my view it's less arrogant than OP is being naive. My point is not that Uber is going to have a certain financial outcome, it's that people are losing their minds because it's large numbers. Losing $3bn on $6bn of revenue is "unhealthy" but if they were losing $3m on $6m people wouldn't give a shit.
> there is a lot of signaling from Travis about his ethics being questionable
Yes.
> existing investors want to get their money out
The Kapors are seed investors. I don't think any of the institutions who have put in the bulk of the $15bn raised have suggested that they want their money back.
Can you articulate:
(a) your beliefs that Uber's fleet shifts to driverless at various points over the next 20 years.
(b) Their change in costs and revenues following this scenario (and in cases when this doesn't happen).
I can only justify Uber's recent valuations if I entirely discount regulatory risk, assume huge GDP growth in the developing economies + Uber establishing dominance there and that Uber goes completely driverless in the next 10 years, without any legal/licencing costs.
The alternative would be a 30% fare hike, which would cause customers to go banannas.
(a) your beliefs that Uber's fleet shifts to driverless at various points over the next 20 years.
(b) Their change in costs and revenues following this scenario (and in cases when this doesn't happen).
I can only justify Uber's recent valuations if I entirely discount regulatory risk, assume huge GDP growth in the developing economies + Uber establishing dominance there and that Uber goes completely driverless in the next 10 years, without any legal/licencing costs.
The alternative would be a 30% fare hike, which would cause customers to go banannas.
You're forgetting Uber's intent to be a major player in on-demand delivery, local shipping/haulage, and long distance shipping.
My point as ever remains this: people are looking at Uber's current model (where it loses 15% on each fare), its revenue, and its losses, and shitting themselves. They are correctly observing that to raise fares they would have to suffer a loss of customers. Those people are missing several points:
1. The bet on autonomous cars reducing Uber's fares further whilst simultaneously driving them to profitability
2. Uber's intent to spread beyond just passenger carrying
3. The fact that Uber could cut its expensive R&D and autonomous car team today and likely be profitable.
4. The fact that these numbers are simply the same numbers as most/many/all startups raising venture capital, simply orders of magnitude higher. They raised $15bn at a $100bn valuation? Great. There are companies who have raised $15m at $100m.
> I can only justify Uber's recent valuations if I entirely discount regulatory risk, assume huge GDP growth in the developing economies + Uber establishing dominance there and that Uber goes completely driverless in the next 10 years, without any legal/licencing costs.
A more interesting discussion (although irrelevant to my argument), and one we'd struggle to make without, y'know, actually having the data we need to value the business. Which is to say that we're sitting on the sidelines trying to guess the strategy and numbers. Parts of it are clear but I'd expect that a VC investor in Uber probably knows a bit more about what they want to do than us.
My point as ever remains this: people are looking at Uber's current model (where it loses 15% on each fare), its revenue, and its losses, and shitting themselves. They are correctly observing that to raise fares they would have to suffer a loss of customers. Those people are missing several points:
1. The bet on autonomous cars reducing Uber's fares further whilst simultaneously driving them to profitability
2. Uber's intent to spread beyond just passenger carrying
3. The fact that Uber could cut its expensive R&D and autonomous car team today and likely be profitable.
4. The fact that these numbers are simply the same numbers as most/many/all startups raising venture capital, simply orders of magnitude higher. They raised $15bn at a $100bn valuation? Great. There are companies who have raised $15m at $100m.
> I can only justify Uber's recent valuations if I entirely discount regulatory risk, assume huge GDP growth in the developing economies + Uber establishing dominance there and that Uber goes completely driverless in the next 10 years, without any legal/licencing costs.
A more interesting discussion (although irrelevant to my argument), and one we'd struggle to make without, y'know, actually having the data we need to value the business. Which is to say that we're sitting on the sidelines trying to guess the strategy and numbers. Parts of it are clear but I'd expect that a VC investor in Uber probably knows a bit more about what they want to do than us.
Ok great. Thanks for going into so much detail.
How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous.
How much can Uber's revenue grow with/without 1 (bare in mind they already represent approx 1/4 to 1/5 of global taxi bookings, although I admit this could be undercounted and grow)?
Based on this, what happens to Uber's net margin with/without (1). Bare in mind it's currently > -100% and the sector average has been low-mid single digits for years. I can't see it rising much above $3 -$4 billion with and can't get it anywhere near this without.
Its true that smaller companies raise money at high multiples of revenue, but that is when they represent a much smaller proportion of the potential market.
It's also true that they COULD successfully expand into other markets and this COULD one day become profitable. However, in my mind this roughly cancels out with the significant competitive and regulatory risk that they face in doubling their share of the taxi market,and they could end up repeating their trick of selling dollar bills for 85 cents in the markets too.
Happy to hear where you disagree!
How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous.
How much can Uber's revenue grow with/without 1 (bare in mind they already represent approx 1/4 to 1/5 of global taxi bookings, although I admit this could be undercounted and grow)?
Based on this, what happens to Uber's net margin with/without (1). Bare in mind it's currently > -100% and the sector average has been low-mid single digits for years. I can't see it rising much above $3 -$4 billion with and can't get it anywhere near this without.
Its true that smaller companies raise money at high multiples of revenue, but that is when they represent a much smaller proportion of the potential market.
It's also true that they COULD successfully expand into other markets and this COULD one day become profitable. However, in my mind this roughly cancels out with the significant competitive and regulatory risk that they face in doubling their share of the taxi market,and they could end up repeating their trick of selling dollar bills for 85 cents in the markets too.
Happy to hear where you disagree!
> How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous.
Tesla has the hardware deployed already and announced that the software to enable Tesla Network (which is essentially Uber, without drivers) will be enabled by the end of this calendar year. You think there are 50% odds that one of the other companies ploughing billions of dollars into autonomous driving R&D is going to take another 15 years to execute on this? I can't think of many examples where that level of first mover advantage has existed outside of the development of viably deployable nuclear weapons.
> Based on this
I don't accept the premise, I'm afraid. But Uber could be profitable if it increased its fare price by 15%. So why is it difficult to believe that they could achieve profitability by cutting central costs?
Tesla has the hardware deployed already and announced that the software to enable Tesla Network (which is essentially Uber, without drivers) will be enabled by the end of this calendar year. You think there are 50% odds that one of the other companies ploughing billions of dollars into autonomous driving R&D is going to take another 15 years to execute on this? I can't think of many examples where that level of first mover advantage has existed outside of the development of viably deployable nuclear weapons.
> Based on this
I don't accept the premise, I'm afraid. But Uber could be profitable if it increased its fare price by 15%. So why is it difficult to believe that they could achieve profitability by cutting central costs?
I agree with everything you wrote except the 'level-5-autonomous-car-ubiquity. I don't think Uber's success depends upon it; Uber is the next iteration in the domestic logistics industry (USPS>UPS>FedEx). One way for Uber to communicate this to the market would be to have all its functionality available in a single application (of course, some of their products are limited availability because they haven't figured out how to scale them). Amazon had/has similar financial metrics over many quarters. Amazon is also a potential acquirer.
Agree that it's not the only end game for Uber, and have discussed elsewhere. There are lots of ways for Uber to hit profitability.
I don't think Tesla can be L5 this year..it would be awesome, and I'd love them to be the first, and I believe that after some time they will have it, but they are just too far behind right now (just look at videos/stats). Waymo still has the best statistics, though their equipment may be more expensive than Tesla's.
In return Tesla will have much more data in a few years.
In return Tesla will have much more data in a few years.
> I don't think Tesla can be L5 this year..
Very happy to concede that it's possible they won't be! But look at the context as I think you're missing the point a little: OP is stating there's a 50% chance that they won't be L5 in the next _fifteen_ years. They're currently forecasting L5 in Q4 17. He's saying that they're going to be 14 years late.
Very happy to concede that it's possible they won't be! But look at the context as I think you're missing the point a little: OP is stating there's a 50% chance that they won't be L5 in the next _fifteen_ years. They're currently forecasting L5 in Q4 17. He's saying that they're going to be 14 years late.
Yup. I wouldn't be surprised if all these people being especially critical are vocally supportive of Lyft, despite the fact that leaked financials show that Lyft is losing money more than twice as fast as Uber.
If investor money stopped flowing tomorrow and all companies were forced to be cash flow positive to remain solvent, we'll quickly see which emperors have no clothes. These unit economics will continue for every player in this market as long as investors feel it is worth fighting for. Those with better margins will survive and will suffer the least amount of dilution in the process.
When the dust settles Uber is going to be the only company that ever ends up making any money in this market.
If investor money stopped flowing tomorrow and all companies were forced to be cash flow positive to remain solvent, we'll quickly see which emperors have no clothes. These unit economics will continue for every player in this market as long as investors feel it is worth fighting for. Those with better margins will survive and will suffer the least amount of dilution in the process.
When the dust settles Uber is going to be the only company that ever ends up making any money in this market.
But there is no guarantee at all that you will ever turn a profit. That lemonade stand of yours might spend more than it makes for longer than your loan will sustain you. Which would require you to obtain another loan and so on. How many loans would it take before you would say: Maybe I really should start to make a profit on every glass of lemonade? Or maybe you'd say: What a bummer, Joe from next door has also started a lemonade business, I wished he wouldn't subsidize his lemonade so much because I can't compete with him and his parents are wealthier than mine so they can keep that up longer.
It's not always a happy ending in the lemonade business.
It's not always a happy ending in the lemonade business.
> But there is no guarantee at all that you will ever turn a profit.
That's correct. And that's why most of your parents' money is in more stable investments. But if yours comes off, then they get a great return!
> That lemonade stand of yours might spend more than it makes for longer than your loan will sustain you.
That's also true. And if that happens, your parents don't have to put bad money after good. That's why it's important that you say what you're going to deliver, and if you deliver it, then they can believe you're on course. If you think you need $40, and you ask for $10 today, then they'll be happy to give you the $30 in 3 years when you need to open more lemonade stands on other streets.
> Which would require you to obtain another loan and so on. How many loans would it take before you would say: Maybe I really should start to make a profit on every glass of lemonade?
That's the point I'm making: your parents and you have an agreement and a plan. If you're sticking to that plan and on course, then we'll give you however many loans we discussed or anticipated you'd need.
> Or maybe you'd say: What a bummer, Joe from next door has also started a lemonade business, I wished he wouldn't subsidize his lemonade so much because I can't compete with him and his parents are wealthier than mine so they can keep that up longer.
This is an inevitable outcome that anyone in the lemonade business would have expected.
> It's not always a happy ending in the lemonade business.
:-)
That's correct. And that's why most of your parents' money is in more stable investments. But if yours comes off, then they get a great return!
> That lemonade stand of yours might spend more than it makes for longer than your loan will sustain you.
That's also true. And if that happens, your parents don't have to put bad money after good. That's why it's important that you say what you're going to deliver, and if you deliver it, then they can believe you're on course. If you think you need $40, and you ask for $10 today, then they'll be happy to give you the $30 in 3 years when you need to open more lemonade stands on other streets.
> Which would require you to obtain another loan and so on. How many loans would it take before you would say: Maybe I really should start to make a profit on every glass of lemonade?
That's the point I'm making: your parents and you have an agreement and a plan. If you're sticking to that plan and on course, then we'll give you however many loans we discussed or anticipated you'd need.
> Or maybe you'd say: What a bummer, Joe from next door has also started a lemonade business, I wished he wouldn't subsidize his lemonade so much because I can't compete with him and his parents are wealthier than mine so they can keep that up longer.
This is an inevitable outcome that anyone in the lemonade business would have expected.
> It's not always a happy ending in the lemonade business.
:-)
> In the fifth year you think you're gonna spend $6 and make $10. And now you're profitable.
In theory yes, but tracking the the progress of UberChina http://www.cnbc.com/2016/02/18/uber-losing-1-billion-a-year-..., situation in Denmark or Spain, inability to win market share from established players in Russia, India or Malaysia introduce some real-world corrections to an otherwise ideal business plan.
In theory yes, but tracking the the progress of UberChina http://www.cnbc.com/2016/02/18/uber-losing-1-billion-a-year-..., situation in Denmark or Spain, inability to win market share from established players in Russia, India or Malaysia introduce some real-world corrections to an otherwise ideal business plan.
You should read Brad Stone's The Upstarts. The outcome in China is actually pretty favorable for Uber. One-line summary: Travis (not Uber, but Travis) probably owns as much of Didi as the current founder/CEO of Didi. Didi is currently valued >$30B.
So good for Travis, bad for the investors in Uber? Nice move.
Uber owns way more.
From http://www.latimes.com/business/technology/la-fi-tn-uber-did...
> Uber will receive a 5.89% share of the combined entity with preferred equity interest, which is equal to a 17.7% economic interest in Didi Chuxing, the statement said.
From http://www.latimes.com/business/technology/la-fi-tn-uber-did...
> Uber will receive a 5.89% share of the combined entity with preferred equity interest, which is equal to a 17.7% economic interest in Didi Chuxing, the statement said.
> inability to win market share from established players in Russia, India or Malaysia
Any concrete data on this other than for news articles?
Any concrete data on this other than for news articles?
A good amount of companies operating in the space are private, guarding their financials as much as possible, so the field is not well covered by analysts, especially in emerging markets. I guess there's not enough incentive for an analyst, investment bank or brokerage house to pay for such research until someone in the field goes public. So unfortunately, we're restricted to random news articles.
Here's NYT on India https://www.nytimes.com/2017/04/14/technology/uber-india.htm...
"On top of all this is competition. Uber faces an aggressive and well-funded Indian rival, Ola Cabs, which operates in 100 cities and offers a wider range of services than Uber does."
RT (okay, not the best source of non-fake news, but this is covering business and referring to a third-party report, so even with a grain of salt) https://www.rt.com/business/312513-yandex-taxi-uber-revenue/
"Russia's most popular search engine has not only beaten Google on its home turf, but has now left Uber in the dust in the Russian taxi market. The company has announced that its online-taxi services’ revenue has tripled in the second quarter of 2015. The Yandex.Taxi fleet has more than 15,000 vehicles in Moscow compared to 10,000 for its Israeli competitor Gett and America’s Uber with 3,000."
Analysis of Singapore market suggests that the playbook consisting of lowering the prices to undercut the taxi establishment works well in countries with expensive taxi services that limit medallions, not so well in countries with dirt-cheap and readily available taxi services http://sbr.com.sg/transport-logistics/news/sorry-uber-and-gr...
"the extremely high taxi penetration rate in Singapore means that it is less difficult for commuters to get a taxi in Singapore than in other cities, making it harder than elsewhere for Uber/Grab to get jobs for its drivers during off-peak hours."
Here's NYT on India https://www.nytimes.com/2017/04/14/technology/uber-india.htm...
"On top of all this is competition. Uber faces an aggressive and well-funded Indian rival, Ola Cabs, which operates in 100 cities and offers a wider range of services than Uber does."
RT (okay, not the best source of non-fake news, but this is covering business and referring to a third-party report, so even with a grain of salt) https://www.rt.com/business/312513-yandex-taxi-uber-revenue/
"Russia's most popular search engine has not only beaten Google on its home turf, but has now left Uber in the dust in the Russian taxi market. The company has announced that its online-taxi services’ revenue has tripled in the second quarter of 2015. The Yandex.Taxi fleet has more than 15,000 vehicles in Moscow compared to 10,000 for its Israeli competitor Gett and America’s Uber with 3,000."
Analysis of Singapore market suggests that the playbook consisting of lowering the prices to undercut the taxi establishment works well in countries with expensive taxi services that limit medallions, not so well in countries with dirt-cheap and readily available taxi services http://sbr.com.sg/transport-logistics/news/sorry-uber-and-gr...
"the extremely high taxi penetration rate in Singapore means that it is less difficult for commuters to get a taxi in Singapore than in other cities, making it harder than elsewhere for Uber/Grab to get jobs for its drivers during off-peak hours."
In Singapore, you can also book taxi via Grab, we did so on our recent trip, meter/payment is still app based.
Or maybe their market plan already included those potential misses.
Or maybe it didn't?
The naiveté on HN is staggering sometimes.
Imagine your parents give you a 10 dollar loan to start a lemonade stand.
It costs you $3 to buy the lemons, sugar, water, and cups to make 10 cups of lemonade, that you sell for ten cents each.
In the first day you spend $3 and make $1. In the second day you spend 3 more dollars and make one dollar. In the third day you spend $3 and make another $1. In the fourth day you again spend $3 and make $1. At this point you now have $2 remaining.
On the fifth day a miracle happens and your mom gives you another 10 dollars, so you make and sell more lemonade. But you're concerned now so you ask all of your customers why they're buying your lemonade. They tell you that the only reason is the price, it's such cheap lemonade! If it were 2x more expensive they might still buy it, but certainly not at 3x.
And then what happens 4 days later?
Uber doesn't have a business model, they have a house of cards. They can't make money continuing to operate the way they do now, fares don't cover their operating costs, even if you factor out costs of "building" or "expansion". Their paths to success are either forcing everyone out of business by undercutting them and causing everyone else to go bankrupt, after which they can raise their prices back to the old market rates; or, somehow managing to get self-driving taxis on the market in the next 5 years so they can take driver compensation out of the equation.
Imagine your parents give you a 10 dollar loan to start a lemonade stand.
It costs you $3 to buy the lemons, sugar, water, and cups to make 10 cups of lemonade, that you sell for ten cents each.
In the first day you spend $3 and make $1. In the second day you spend 3 more dollars and make one dollar. In the third day you spend $3 and make another $1. In the fourth day you again spend $3 and make $1. At this point you now have $2 remaining.
On the fifth day a miracle happens and your mom gives you another 10 dollars, so you make and sell more lemonade. But you're concerned now so you ask all of your customers why they're buying your lemonade. They tell you that the only reason is the price, it's such cheap lemonade! If it were 2x more expensive they might still buy it, but certainly not at 3x.
And then what happens 4 days later?
Uber doesn't have a business model, they have a house of cards. They can't make money continuing to operate the way they do now, fares don't cover their operating costs, even if you factor out costs of "building" or "expansion". Their paths to success are either forcing everyone out of business by undercutting them and causing everyone else to go bankrupt, after which they can raise their prices back to the old market rates; or, somehow managing to get self-driving taxis on the market in the next 5 years so they can take driver compensation out of the equation.
This is nonsense I'm afraid.
I was demonstrating to OP that even if he is concerned by the losses Uber is making, and doesn't consider $3bn of losses on $6bn of revenue to be "healthy", it doesn't matter if the plan and the numbers are headed in the right way as far as investors are concerned.
> On the fifth day a miracle happens and your mom gives you another 10 dollars
This is precisely my point. This does not happen (except at huge economic cost to the company and its founders) unless you are demonstrating a plan which you are executing on.
> Uber doesn't have a business model.
Yes, it does. You may not like it, and you may think it's stupid and you know better than the people who put $15bn into it, but it does have a business model.
> They can't make money continuing to operate the way they do now, fares don't cover their operating costs, even if you factor out costs of "building" or "expansion".
Really? A 15% price increase = Uber is profitable[1], and you don't think they could generate a commensurate margin shift from losing central cost? Get rid of the team working on driverless and it's a profitable business.
> Their paths to success are either forcing everyone out of business by undercutting them
Yep.
> somehow managing to get self-driving taxis on the market
Yep
> or simply continuing to build huge volume, as they have been, and then cutting their central costs back to achieve profitability
Oh, you didn't suggest that much easier path to profitability which they could execute on tomorrow. Weird.
[1] https://twitter.com/naval/status/853033099101323264
I was demonstrating to OP that even if he is concerned by the losses Uber is making, and doesn't consider $3bn of losses on $6bn of revenue to be "healthy", it doesn't matter if the plan and the numbers are headed in the right way as far as investors are concerned.
> On the fifth day a miracle happens and your mom gives you another 10 dollars
This is precisely my point. This does not happen (except at huge economic cost to the company and its founders) unless you are demonstrating a plan which you are executing on.
> Uber doesn't have a business model.
Yes, it does. You may not like it, and you may think it's stupid and you know better than the people who put $15bn into it, but it does have a business model.
> They can't make money continuing to operate the way they do now, fares don't cover their operating costs, even if you factor out costs of "building" or "expansion".
Really? A 15% price increase = Uber is profitable[1], and you don't think they could generate a commensurate margin shift from losing central cost? Get rid of the team working on driverless and it's a profitable business.
> Their paths to success are either forcing everyone out of business by undercutting them
Yep.
> somehow managing to get self-driving taxis on the market
Yep
> or simply continuing to build huge volume, as they have been, and then cutting their central costs back to achieve profitability
Oh, you didn't suggest that much easier path to profitability which they could execute on tomorrow. Weird.
[1] https://twitter.com/naval/status/853033099101323264
This is the much better analogy for the Uber business model.
> or, somehow managing to get self-driving taxis on the market in the next 5 years so they can take driver compensation out of the equation.
Only if nobody beats them to it and offers self-driving taxis before they do.
Only if nobody beats them to it and offers self-driving taxis before they do.
Sales growth in commodity product that is loosing money on ever sale? I'll never understand this. Uber won't own the market. There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft.
I sold my car over a year ago and use a mix of ridesharing and rentals for transportation. Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and from work and the drivers are compensated only for gas money.
Locally, there is a company that will allow you to rent an electric car for free for two hours (it has an electronic billboard on the ceiling).
In the future, cheap electricity and efficient manufacturing might make a world where rides of a certain distance would be free or extremely low cost in exchange for advertising.
Transportation is a commodity. For a short ride, I don't care that much about the differences, whether I'm sitting in a Toyota Corolla or Mercedes S-Class. It gets me from point A to point B.
In this environment, I think the VCs pouring billions of dollars into Uber are throwing their money away subsidizing Uber's leadership in commodity market. Cheaper wins. I get to choose on each ride. There's no lock-in, there's really no reason for brand loyalty. Whatever is cheaper wins. If it's free, whomever gets here first wins. If they are both available right now, it's who has the nicer seat.
This is a race to the bottom and as a customer I'm only going to remember negative experiences with the brand. Lyft is better by encouraging themed cars but, they've stopped doing that from what I've seen.
There's a good chance that Lyft and Uber might face huge backlash for bait and switching drivers when they roll out driverless cars.
I'm bearish on Uber in the long term.
I sold my car over a year ago and use a mix of ridesharing and rentals for transportation. Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and from work and the drivers are compensated only for gas money.
Locally, there is a company that will allow you to rent an electric car for free for two hours (it has an electronic billboard on the ceiling).
In the future, cheap electricity and efficient manufacturing might make a world where rides of a certain distance would be free or extremely low cost in exchange for advertising.
Transportation is a commodity. For a short ride, I don't care that much about the differences, whether I'm sitting in a Toyota Corolla or Mercedes S-Class. It gets me from point A to point B.
In this environment, I think the VCs pouring billions of dollars into Uber are throwing their money away subsidizing Uber's leadership in commodity market. Cheaper wins. I get to choose on each ride. There's no lock-in, there's really no reason for brand loyalty. Whatever is cheaper wins. If it's free, whomever gets here first wins. If they are both available right now, it's who has the nicer seat.
This is a race to the bottom and as a customer I'm only going to remember negative experiences with the brand. Lyft is better by encouraging themed cars but, they've stopped doing that from what I've seen.
There's a good chance that Lyft and Uber might face huge backlash for bait and switching drivers when they roll out driverless cars.
I'm bearish on Uber in the long term.
> Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and from work and the drivers are compensated only for gas money.
When I first heard about Uber I never thought about it as a replacement for the traditional taxi system but more of this. People on the way to their destination who can take some people there. Not some guy waiting around for the next person who needs a ride.
When I first heard about Uber I never thought about it as a replacement for the traditional taxi system but more of this. People on the way to their destination who can take some people there. Not some guy waiting around for the next person who needs a ride.
> Sales growth in commodity product that is loosing money on ever sale? I'll never understand this.
It's almost a standard by now: lose on every sale, make it up in volume.
Joseph Heller had that one first I think.
It's almost a standard by now: lose on every sale, make it up in volume.
Joseph Heller had that one first I think.
Can you even call this a business?
Well, there are some examples of such loss leaders becoming successful but not in a market like this.
Tesla is a good example of a company that did this.
Tesla is a good example of a company that did this.
And there are people that think Tesla is doomed. You can't run losses forever and expect to keep the lights on. I don't know what is so hard to understand, it is simple math. They, Tesla, are not "successful" in any sense of the word as it relates to financial stability.
You're conflating the basic unit economic principles of fixed vs. variable costs. And you're ignoring the breakeven point.
A company that loses money on every unit sale has no breakeven point (Uber). A company that makes money on every unit sale has a breakeven point (Tesla). Because Tesla's fixed costs are very high, their breakeven point is out there, and thus they must operate at a loss for a period of time.
Now this is a simplistic one product view. When you add multiple products and release timing to the model, the complexity increases. Not only does the complexity increase, we don't have enough external financial numbers to break apart the data per product.
Don't get me wrong, Tesla has execution risk. But financially, I'm not at all concerned. They won't fail for lack of profitability or demand, they'll fail because they couldn't execute if anything. And... well... they've been slowly but surely derisking their execution risk as well.
So we shall see.
A company that loses money on every unit sale has no breakeven point (Uber). A company that makes money on every unit sale has a breakeven point (Tesla). Because Tesla's fixed costs are very high, their breakeven point is out there, and thus they must operate at a loss for a period of time.
Now this is a simplistic one product view. When you add multiple products and release timing to the model, the complexity increases. Not only does the complexity increase, we don't have enough external financial numbers to break apart the data per product.
Don't get me wrong, Tesla has execution risk. But financially, I'm not at all concerned. They won't fail for lack of profitability or demand, they'll fail because they couldn't execute if anything. And... well... they've been slowly but surely derisking their execution risk as well.
So we shall see.
> A company that loses money on every unit sale has no breakeven point (Uber)
What? Uber spends an additional ~$0 on every additional ride. They only lose money because of growth and price wars with the competition.
In mature markets with no competition (eg. Toronto) there are no driver incentives or bonuses and they are still cheap and popular with riders and drivers alike.
What? Uber spends an additional ~$0 on every additional ride. They only lose money because of growth and price wars with the competition.
In mature markets with no competition (eg. Toronto) there are no driver incentives or bonuses and they are still cheap and popular with riders and drivers alike.
Hm. I just got driven home from the bar for $4. It was an uber pool, but for the whole ten minute drive, nobody else was in the car. This was in silicon valley, a very mature market.
This sort of thing is super common, where I get a deep discount on a 'pool' ride but I end up riding alone. The drivers tell me that they get a regular rate (on top of whatever the bonuses are) which is per-mile. The guy tonight said he thought he was making like $7 for the ride in question, just on the mileage.
I... am pretty sure they are losing money on many pool rides.
This sort of thing is super common, where I get a deep discount on a 'pool' ride but I end up riding alone. The drivers tell me that they get a regular rate (on top of whatever the bonuses are) which is per-mile. The guy tonight said he thought he was making like $7 for the ride in question, just on the mileage.
I... am pretty sure they are losing money on many pool rides.
> I... am pretty sure they are losing money on many pool rides.
They can be losing money on many pool rides and still be making money on pool overall. I don't know whether they are.
They can be losing money on many pool rides and still be making money on pool overall. I don't know whether they are.
So you're telling me that Uber isn't selling their services at a loss on a unit economics scale in the majority of their markets? What percentage of their markets have positive unit economics? This is news to me, and I'm open to updating my viewpoint given data to the contrary.
There's no lock in, because Uber failed in the most important category of their business - true ride sharing, a business with strong network effect, while others(ridewithvia, ford chariot) are already succeeding with true, high-density ride-sharing, with others companies(moovex, mercedes, ..) are working on their own service.
And chariot i think started in 2014, so Uber is very slow to respond, not sure why.
And chariot i think started in 2014, so Uber is very slow to respond, not sure why.
Chariot is doing exactly the same thing as Uber, ie. subsidizing all the rides to get a low price. But they don't have the same network effects, they will go out of business soon.
But chariot has network effects:more passengers = Fuller vehicles + shorter routes = lower costs and lower trip times.
And I'm sure Ford did the math, they're not some VC with free money.
And I'm sure Ford did the math, they're not some VC with free money.
If you look at the primary ways they keep their market it looks closer to a CPG than a technology company in that it's almost 100% brand recognition and sentiment.
Totally different long term business model and why they are pushing so hard for driverless cars, because that's more of a platform.
I expect that they want to really be an infrastructure player more like Verizon than anything in the very long term where they have lock in through municipal or state mandate for contract vehicles and driving infrastructure.
Given their less than positive relationship with governments I could see a city/state starting with autonomous buses and then moving to cars in a hub and spoke type system for public transport level fares. Uber probably would want those contracts more than anything.
Totally different long term business model and why they are pushing so hard for driverless cars, because that's more of a platform.
I expect that they want to really be an infrastructure player more like Verizon than anything in the very long term where they have lock in through municipal or state mandate for contract vehicles and driving infrastructure.
Given their less than positive relationship with governments I could see a city/state starting with autonomous buses and then moving to cars in a hub and spoke type system for public transport level fares. Uber probably would want those contracts more than anything.
Well they have been getting those contracts in a few municipalities. AFAIK no other player in this market has started signing up municipal governments to use ridesharing to supplement or replace other public transportation options like buses.
Citation please?
Is there any public information that says Uber is losing money on every sale? I'm honestly curious. In my brief searching, I haven't found much. I'd love it if someone would point me to information on Uber's finances/economics that shows their negative gross margin in developed city markets.
My mental model of their finances is heavy fixed costs (~5,000 programmers) and near-zero marginal costs. The only way they are losing money on marginal rides is if they are paying drivers more than the fare. Do they? I honestly don't know.
Is there any public information that says Uber is losing money on every sale? I'm honestly curious. In my brief searching, I haven't found much. I'd love it if someone would point me to information on Uber's finances/economics that shows their negative gross margin in developed city markets.
My mental model of their finances is heavy fixed costs (~5,000 programmers) and near-zero marginal costs. The only way they are losing money on marginal rides is if they are paying drivers more than the fare. Do they? I honestly don't know.
There have been leaks (from a while back) that show a loss in most markets (but not all). The spending involved is mostly from driver incentives, which takes some form of "paying drivers more than the fare[s they get]", but is often of the form "we will guarantee you make at least $X so long as you're online in that area during this time and accept at least y% of the requests".
Do you have links to these leaks? I'd like to learn more.
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> There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft.
It makes sense, but I'm not sure it works out that way. Many web services have zero lock-in (not including those with a network effect such as Twitter and Facebook) and competitors are a URL away, yet the first ones to gain (mindshare? marketshare?) seem to keep it: Google search, Amazon, etc.
It makes sense, but I'm not sure it works out that way. Many web services have zero lock-in (not including those with a network effect such as Twitter and Facebook) and competitors are a URL away, yet the first ones to gain (mindshare? marketshare?) seem to keep it: Google search, Amazon, etc.
Google was the first search engine? Actually, the field was crowded when Google appeared.
Amazon was definitely not the first ecommerce site either.
Google has superior search results. FB/Twitter are where all my friends are. Amazon has network effects with Prime that are more than just free next day shipping.
Uber takes me from point A to point B in a virtually indistinguishable way than Lyft or any of the other smaller ride sharing services. The most important thing is the transport, not the comfort, not the branding, not the "Lifestyle Experience". Maybe they will succeed because all of these people want something more out of a ride other than the ride but, for me it's cheap, reliable, fast; in that order. Everything else if fluff.
Uber takes me from point A to point B in a virtually indistinguishable way than Lyft or any of the other smaller ride sharing services. The most important thing is the transport, not the comfort, not the branding, not the "Lifestyle Experience". Maybe they will succeed because all of these people want something more out of a ride other than the ride but, for me it's cheap, reliable, fast; in that order. Everything else if fluff.
Services like UberPool/Lyft Line do benefit from winner-takes-all effects, as the service that can keep its cars full can offer lower prices.
Just a note: There were many search engines with a lot of market share before Google (i.e Lycos).
Yes, but not really.
Google search was the first one to find a business model for pure search (adsense i.e. advertising based on your search terms).
That allowed them to build the best pure search experience they could and was so profitable that they could spend more money building it than anyone else. That's a virtuous cycle.
Their competition at the time was moving away from pure search (because it was unprofitable for them) into yahoo-like portals, because that's where the money was (also ads but non-contextual display ads).
Which is why that's not a good analogy for uber.
In U.S. there's really Uber and Lyft. Every time Uber is discussed, "no lock-in" comes up but why no one even tries to compete with Uber and Lyft in US?
It does seem like people who actually have the money to potentially mount an attack on Uber or Lyft came to the conclusion that it would be a foolish waste of money.
Uber and Lyft have a clear business model: they are better and cheaper than taxis and have global presence (while taxi companies are historically local and don't have the capital to go global).
Customers in this market do care about price and better service, so it's rather obvious that Uber and Lyft will win over taxis (arguably they already won given that they're 100x bigger than any taxi company).
Both Uber and Lyft are still in the phase of aggressive expansion and growth, they still enter new markets, subsidize the service to increase usage density (which makes the user experience better), they experiment with things like Uber Pool, being alternative to busses etc.
None of the above is cheap so it's understandable that they loose money today.
But at some point the growth will stop, their costs will go down and one of them (or even both) will be very profitable companies.
The only thread for Uber and Lyft are self-driving cars (i.e. Google, Tesla, GM) because they'll drive costs down by 5x. Whoever wins that race wins the taxi business, which is why Uber spent $680 million on Otto and GM $1billion on Cruise and Google was apparently paying $120 million to a single individual in charge of self-driving cars.
Google search was the first one to find a business model for pure search (adsense i.e. advertising based on your search terms).
That allowed them to build the best pure search experience they could and was so profitable that they could spend more money building it than anyone else. That's a virtuous cycle.
Their competition at the time was moving away from pure search (because it was unprofitable for them) into yahoo-like portals, because that's where the money was (also ads but non-contextual display ads).
Which is why that's not a good analogy for uber.
In U.S. there's really Uber and Lyft. Every time Uber is discussed, "no lock-in" comes up but why no one even tries to compete with Uber and Lyft in US?
It does seem like people who actually have the money to potentially mount an attack on Uber or Lyft came to the conclusion that it would be a foolish waste of money.
Uber and Lyft have a clear business model: they are better and cheaper than taxis and have global presence (while taxi companies are historically local and don't have the capital to go global).
Customers in this market do care about price and better service, so it's rather obvious that Uber and Lyft will win over taxis (arguably they already won given that they're 100x bigger than any taxi company).
Both Uber and Lyft are still in the phase of aggressive expansion and growth, they still enter new markets, subsidize the service to increase usage density (which makes the user experience better), they experiment with things like Uber Pool, being alternative to busses etc.
None of the above is cheap so it's understandable that they loose money today.
But at some point the growth will stop, their costs will go down and one of them (or even both) will be very profitable companies.
The only thread for Uber and Lyft are self-driving cars (i.e. Google, Tesla, GM) because they'll drive costs down by 5x. Whoever wins that race wins the taxi business, which is why Uber spent $680 million on Otto and GM $1billion on Cruise and Google was apparently paying $120 million to a single individual in charge of self-driving cars.
Google and amazon won the market because they made a better product. Before google search was clumsy and slow, it was just bad. But people still went to search sites because where else are you going to go? Most other search sites (yahoo being a prime example of one that existed before google and still survives) decided not to try improving search (which was too hard) but rather to bolt on additional features, to make their web-site a "portal" by providing directories, other services, games, etc. Portal sites were all the rage in the late '90s. But then google came around and knocked it out of the park with a rethink of search. They took cutting edge CS and software engineering in the form of pagerank and map/reduce and married it to an equally cutting edge model for running web apps in the form of sharded multi-host metacomputers and then hosted it on a clean, fast loading page. The result was that google could produce better results faster and at lower ammortized systems cost than the competition, and the clean UI made the site more usable. Instead of taking 5 seconds per page to return a result that might have something worthwhile on like page 3 google returned a page full of high quality results in a fraction of a second. That's why they won. And it's how they made money too because they could provide more targeted and less intrusive ads (based on search terms) and they could make less money per ad while still making more money overall (because their cost per search was so low).
Amazon figured out how to marry a familiar and easy to use web-based store to a state of the art fulfillment pipeline, which is how they took over the market. Fulfillment is a non-trivial problem. Keeping track of what is where and how much is left, figuring out what to charge for shipping and handling, and figuring out where to keep stock and how to produce orders. A typical web-based shop will get to your order in one or two business days and be able to put it in the mail maybe that day or a day later. Amazon figured out how to optimize everything about their systems to be able to get your order in the mail within hours of you placing it. They've consistently been improving that process for years, and almost nobody can keep up with them. They can achieve same day delivery on a lot of common items in many metro areas, for example.
If Uber was as superior to the alternatives as Amazon or google was they wouldn't have any problems keeping marketshare. But they really aren't that much different than Lyft or other ride hailing apps. The core valueadd comes from being able to use a smartphone to set up your ride instead of having to place a call or having a cab be immediately visible to you. There's not enough that Uber brings to the table otherwise which would allow them to keep their business if they couldn't subsidize fares using VC money.
Amazon figured out how to marry a familiar and easy to use web-based store to a state of the art fulfillment pipeline, which is how they took over the market. Fulfillment is a non-trivial problem. Keeping track of what is where and how much is left, figuring out what to charge for shipping and handling, and figuring out where to keep stock and how to produce orders. A typical web-based shop will get to your order in one or two business days and be able to put it in the mail maybe that day or a day later. Amazon figured out how to optimize everything about their systems to be able to get your order in the mail within hours of you placing it. They've consistently been improving that process for years, and almost nobody can keep up with them. They can achieve same day delivery on a lot of common items in many metro areas, for example.
If Uber was as superior to the alternatives as Amazon or google was they wouldn't have any problems keeping marketshare. But they really aren't that much different than Lyft or other ride hailing apps. The core valueadd comes from being able to use a smartphone to set up your ride instead of having to place a call or having a cab be immediately visible to you. There's not enough that Uber brings to the table otherwise which would allow them to keep their business if they couldn't subsidize fares using VC money.
> Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and from work and the drivers are compensated only for gas money.
The Who's Driving app is great for this kind of thing.
The Who's Driving app is great for this kind of thing.
*losing, every
Yeah, it's actually kind of amazing how many 'traditional' checkboxes Uber seems to miss with its 'rapid growth'. Little network effect lockin, low (ish) barrier to entry (with the hardest thing being brand recognition, with news of new/cheaper/'better' ridesharing plats potentially spreading like wildfire), opportunistic customers (and even drivers) without brand loyalty.
If Kalanick implements some sort of amazing plan to pull them through despite all of that (not counting the moonshot of expediting SDCs into the market) he'll be a walking testament to the whole 'market doesn't care who you are as a person, but if you can get the job done' maxim.
I'm not necessarily bearish - I'm not expecting an upset like that, but I'm not particularly invested in Uber so am more keeping an eye on it for the entertainment than anything.
Yeah, it's actually kind of amazing how many 'traditional' checkboxes Uber seems to miss with its 'rapid growth'. Little network effect lockin, low (ish) barrier to entry (with the hardest thing being brand recognition, with news of new/cheaper/'better' ridesharing plats potentially spreading like wildfire), opportunistic customers (and even drivers) without brand loyalty.
If Kalanick implements some sort of amazing plan to pull them through despite all of that (not counting the moonshot of expediting SDCs into the market) he'll be a walking testament to the whole 'market doesn't care who you are as a person, but if you can get the job done' maxim.
I'm not necessarily bearish - I'm not expecting an upset like that, but I'm not particularly invested in Uber so am more keeping an eye on it for the entertainment than anything.
> There is zero lock-in.
They're fixing this. You buy 100 flat fares that you can use over the next 6 months, then you're more or less locked in.
They're fixing this. You buy 100 flat fares that you can use over the next 6 months, then you're more or less locked in.
I tried that with Uber. It was great, everywhere I wanted to go for a month for $1.99 per ride $40. I saved a FANTASTIC amount of money that month on Uber and I used the hell out of it. As soon as it was over, I went back to checking Lyft again.
I'm sure they lost even more money on me that month than normal.
I'm sure they lost even more money on me that month than normal.
what's the electric car company??
What a sham! Instead of spinning BS, just go public if your fundamental finances are sound.
"We'll make it up in volume!"
Seriously.
We can double the size of a loss making business! We can lose money twice as fast!
Actually it looks like losses relative to revenues are smaller than they were, but that's still not impressive. Especially when it's non-GAAP anyway.
How much money do they have? How did they raise so much without giving any control away and not going to the public markets? I mean... a billion here, a billion there, sooner or later it adds up... right?
We can double the size of a loss making business! We can lose money twice as fast!
Actually it looks like losses relative to revenues are smaller than they were, but that's still not impressive. Especially when it's non-GAAP anyway.
How much money do they have? How did they raise so much without giving any control away and not going to the public markets? I mean... a billion here, a billion there, sooner or later it adds up... right?
They've raised $15bn in total and their last valuation was about $70bn. In total they've lost around $6bn, meaning that between cash and credit facilities they have around $8-9bn in the bank.
And when they need to make profit they can easily fire about 90% of their workforce & keep the machine humming in place.
can they? Their valuation is entirely based on self-driving cars, if they fire everybody and give up on that it's over for them.
I think he's being sarcastic. But it looks like they only need to increase price by 15% to achieve profitability, so it doesn't require firing 90% of their staff to get there.
Reminds me of this comic:
http://www.giantitp.com/comics/oots0135.html
http://www.giantitp.com/comics/oots0135.html
Uber is demonstrating that they can sell $2 bills for a buck and that there's demand for that. They've not demonstrated they can establish a real business here in what has turned into a pure commodity market.
In competitive markets a lot of "me too" competitors pop up all the time. When you see consumers just picking the one that's the cheapest (i.e. with the most VC cash subsidizing the ride) and drivers rocking up with multiple phones on the dashboard as they too game these companies it's clearly all a fools game. This industry is a race to the bottom, but at least people get to enjoy cheap VC-subsidized rides while the party's still on!
In competitive markets a lot of "me too" competitors pop up all the time. When you see consumers just picking the one that's the cheapest (i.e. with the most VC cash subsidizing the ride) and drivers rocking up with multiple phones on the dashboard as they too game these companies it's clearly all a fools game. This industry is a race to the bottom, but at least people get to enjoy cheap VC-subsidized rides while the party's still on!
Quibble: having multiple phones is not gaming companies; they're independent contractors, remember? You work for whoever provides the best compensation at that moment.
Live by the sword, die by the sword.
Live by the sword, die by the sword.
It's possible he meant game in a deeper, street-philosophy sense, in that the drivers are playing the game and Uber is playing the fool.
My understanding was that Uber had/has a system called "Hell" that could uniquely identify Lyft drivers based on fiticious rider requests Uber would send, and then use that data to target those Lyft drivers to drive exclusively for Uber.
Uber most definitely wasn't playing the fool.
Uber most definitely wasn't playing the fool.
I'm not saying that's what's happening, I'm just saying there's an idiomatic use of "playing these companies" that doesn't involve betraying a trust.
Fair analysis. Definitely hard to obtain meaning from text alone at times.
> Uber is demonstrating that they can sell $2 bills for a buck and that there's demand for that.
I think the consensus is that rides are subsidised by around twenty cents on the dollar.
Ubers bet is autonomous cars. They pay a 75% fee to the driver. When autonomous fleets launch in the next few years they'll normalise prices at around 50%, meaning your $10 ride costs you $5, and each ride has wafer thin profitability (the additional 5% margin will be chewed up a little by maintenance costs).
And let's be real: Lyft did $600m of sales in 2016. Uber did $5.5bn. This isn't just a race to the bottom on price, it's about building a brand.
I think the consensus is that rides are subsidised by around twenty cents on the dollar.
Ubers bet is autonomous cars. They pay a 75% fee to the driver. When autonomous fleets launch in the next few years they'll normalise prices at around 50%, meaning your $10 ride costs you $5, and each ride has wafer thin profitability (the additional 5% margin will be chewed up a little by maintenance costs).
And let's be real: Lyft did $600m of sales in 2016. Uber did $5.5bn. This isn't just a race to the bottom on price, it's about building a brand.
> Ubers bet is autonomous cars.
Out of the following contenders:
1) GM (+Cruise Automation), Mercedes or VW with their enormous supply networks, vendor lock-ins, economies of scale and ability to massively ramp up a car production when needed.
2) Tesla with their (allegedly unique) battery storage tech, working manufacturing facility and massive amounts of data harvested from thousands of Tesla vehicles on the roads today.
3) Google/Waymo with their unlimited budget, ability to partner up or buy whoever they choose, and nearly limitless amount of software engineering talent they can suddenly relocate to this project when desired.
4) Avis/Budget, Hertz or other fleet management company that already has a relationship with car manufacturer and can own/maintain/wash/clean/park/dispatch a large number of vehicles on the cheap.
5) Uber.
Why is #5 the strongest candidate? Does the dispatch app that displays available cars on the map create such a strong moat that #1, #2, #3 or #4 will never be able to replicate? Does Uber have a bunch of aces up their sleeve that will allow them to build/buy automobile manufacturing facilities on the cheap? Do they have a know-how of maintaining a large fleet and take care of simple things like changing a tire or cleaning the car after the previous passenger puked in it? And do that at scale?
Out of the following contenders:
1) GM (+Cruise Automation), Mercedes or VW with their enormous supply networks, vendor lock-ins, economies of scale and ability to massively ramp up a car production when needed.
2) Tesla with their (allegedly unique) battery storage tech, working manufacturing facility and massive amounts of data harvested from thousands of Tesla vehicles on the roads today.
3) Google/Waymo with their unlimited budget, ability to partner up or buy whoever they choose, and nearly limitless amount of software engineering talent they can suddenly relocate to this project when desired.
4) Avis/Budget, Hertz or other fleet management company that already has a relationship with car manufacturer and can own/maintain/wash/clean/park/dispatch a large number of vehicles on the cheap.
5) Uber.
Why is #5 the strongest candidate? Does the dispatch app that displays available cars on the map create such a strong moat that #1, #2, #3 or #4 will never be able to replicate? Does Uber have a bunch of aces up their sleeve that will allow them to build/buy automobile manufacturing facilities on the cheap? Do they have a know-how of maintaining a large fleet and take care of simple things like changing a tire or cleaning the car after the previous passenger puked in it? And do that at scale?
Quite simply at the rate Uber is going it will crash and burn long before self-driving cars are a thing at scale
I'm not arguing that it's a sensible bet. I'm arguing that people shitting themselves laughing because Uber has a model whereby it loses 15% of the cost of each trip do not appreciate what Uber is trying to do.
> Ubers bet is autonomous cars.
Autonomous cars being generally available lowers the barrier to entry for competitors to Uber, and makes their position worse, not better. Uber's bet is Uber controlling the autonomous car market, which is a different and much harder thing.
Autonomous cars being generally available lowers the barrier to entry for competitors to Uber, and makes their position worse, not better. Uber's bet is Uber controlling the autonomous car market, which is a different and much harder thing.
> Autonomous cars being generally available lowers the barrier to entry for competitors to Uber, and makes their position worse, not better.
Why do you think that's true? Uber is investing heavily in autonomous cars because they want to be very early to the market (hence "Uber's bet is autonomous cars"), and because when you have autonomous cars high utilisation is important, they are in food delivery, and interested in shipping and courier services.
I think you're also overestimating the complexity of recruiting a load of former private hire drivers and underestimating the complexity of developing scaled fleet management solutions for entirely autonomous vehicles.
> Uber's bet is Uber controlling the autonomous car market
I think most reasonable people would be able to impute some sort of first mover or early mover advantage into what I was saying.
Why do you think that's true? Uber is investing heavily in autonomous cars because they want to be very early to the market (hence "Uber's bet is autonomous cars"), and because when you have autonomous cars high utilisation is important, they are in food delivery, and interested in shipping and courier services.
I think you're also overestimating the complexity of recruiting a load of former private hire drivers and underestimating the complexity of developing scaled fleet management solutions for entirely autonomous vehicles.
> Uber's bet is Uber controlling the autonomous car market
I think most reasonable people would be able to impute some sort of first mover or early mover advantage into what I was saying.
I think you're underestimating the difficulty of getting a system in tens of thousands of vehicles cheaply and easily.
Do you really think with this many players, that anyone is going to get a huge market? They're not. Uber, even if they manage to survive their lawsuit and build a working system, has plenty of fast followers in the self-driving systems market. So the competition will be at most 24 months behind. Not nearly enough time to acquire and retrofit a fleet of vehicles, and then deploy the fleet in numbers big enough to make a difference to their current cost structure. (Keep in mind the fleet acquisition is a capital expenditure.)
Second, they won't have a large market to distribute this technology, because they don't make cars, and the people that do make cars are already players in this space. I find it hard to believe that Volkswagon, Toyota, or General Motors would simply ditch their internal projects and license with a newcomer that has no manufacturing experience to be a supplier, especially when they themselves would be close to making their own solution which would be able able to be manufactured at scale.
Look, everyone knows that auto manufacturer navigation and entertainment systems suck, yet they still roll their own instead of wide partnering with Apple, Microsoft, Google. My Acura's infotainment system is awkward, slow, and outright user antagonistic, yet there it is.
At most, Uber's self driving kits could be what Alpine is to car stereos. Sure people buy them, but most don't, and if you already have one that works, you probably won't swap it out.
Do you really think with this many players, that anyone is going to get a huge market? They're not. Uber, even if they manage to survive their lawsuit and build a working system, has plenty of fast followers in the self-driving systems market. So the competition will be at most 24 months behind. Not nearly enough time to acquire and retrofit a fleet of vehicles, and then deploy the fleet in numbers big enough to make a difference to their current cost structure. (Keep in mind the fleet acquisition is a capital expenditure.)
Second, they won't have a large market to distribute this technology, because they don't make cars, and the people that do make cars are already players in this space. I find it hard to believe that Volkswagon, Toyota, or General Motors would simply ditch their internal projects and license with a newcomer that has no manufacturing experience to be a supplier, especially when they themselves would be close to making their own solution which would be able able to be manufactured at scale.
Look, everyone knows that auto manufacturer navigation and entertainment systems suck, yet they still roll their own instead of wide partnering with Apple, Microsoft, Google. My Acura's infotainment system is awkward, slow, and outright user antagonistic, yet there it is.
At most, Uber's self driving kits could be what Alpine is to car stereos. Sure people buy them, but most don't, and if you already have one that works, you probably won't swap it out.
>> Uber's bet is Uber controlling the autonomous car market
> I think most reasonable people would be able to impute some sort of first mover or early mover advantage into what I was saying.
I think most reasonable people are deeply sceptical that Uber is going to win first-mover advantage against the likes of Google (who's been working on the autonomy tech for what, a decade, now?), traditional automakers (who have deep experience actually building vehicles), and Tesla (who've been working on the autonomy for at least as long, while also developing manufacturing experience, and have many more vehicles on the road gathering data). Let's not even bother quibbling about that nasty lawsuit.
> I think most reasonable people would be able to impute some sort of first mover or early mover advantage into what I was saying.
I think most reasonable people are deeply sceptical that Uber is going to win first-mover advantage against the likes of Google (who's been working on the autonomy tech for what, a decade, now?), traditional automakers (who have deep experience actually building vehicles), and Tesla (who've been working on the autonomy for at least as long, while also developing manufacturing experience, and have many more vehicles on the road gathering data). Let's not even bother quibbling about that nasty lawsuit.
> I think most reasonable people are deeply sceptical that Uber is going to win first-mover advantage against the likes of Google
Sure. Not anything to do with my point, though.
Sure. Not anything to do with my point, though.
Autonomous cars are not going arrive for 10 to 15 years. If Uber can't reduce costs by 20% or increase prices by 20% or some combination of the two, then they are making the wrong kind of bet's.
Personally, I believe their bet is on not needing a large advertising budget once enough people know about their service.
Personally, I believe their bet is on not needing a large advertising budget once enough people know about their service.
> Autonomous cars are not going arrive for 10 to 15 years.
Tesla believes its cars are already equipped with the necessary hardware and that the software, including Tesla Network (their announced autonomous Uber competitor), will be going live at the end of 2017.
At this point five years seems like a long time horizon for autonomous cars being on the road.
Tesla believes its cars are already equipped with the necessary hardware and that the software, including Tesla Network (their announced autonomous Uber competitor), will be going live at the end of 2017.
At this point five years seems like a long time horizon for autonomous cars being on the road.
Saying they're going to release details at the end of this year is not the same as launching at the end of the year.
This might be the perfect Hacker News comment. It's a shifting of the premise to something which is axiomatically indisputable, but clearly has no relevance to the argument.
OP said that self driving cars are 10-15 years away.
I observe that the hardware has already been developed and that Tesla anticipates its software being ready within the next 12 months, suggesting that a ten year horizon feels conservative.
HN pedant wades in to make an irrelevant point.
OP said that self driving cars are 10-15 years away.
I observe that the hardware has already been developed and that Tesla anticipates its software being ready within the next 12 months, suggesting that a ten year horizon feels conservative.
HN pedant wades in to make an irrelevant point.
[deleted]
hackernews.. the place for uber quarterbacking.
For what it's worth, comments like these here on HN tend to be seen as "sore loser" comments and find their way to the graveyard.
Congratulations on your foresight, however I think the chorus you should expect from this audience is "they did it better than you, so get over it."
Congratulations on your foresight, however I think the chorus you should expect from this audience is "they did it better than you, so get over it."
second post.. why can't I delete the whole tree?
I'm actually a DNN that can recognize social patterns based on sentiment analysis of text in the context of HN. ;)
Seriously though, this is a super common thing that happens on HN all the time. This community is actively hostile to people who aren't winners and talk about why they should have won if only they were "given a chance" or did something differently. Pretty typical recipe for the bottom of the page.
I'll note that I didn't vote either way on your comment so as to not bias it. Though simply posting my comment might actually sway people to vote it up - there is also a very strong contrarian trend on HN as well.
Seriously though, this is a super common thing that happens on HN all the time. This community is actively hostile to people who aren't winners and talk about why they should have won if only they were "given a chance" or did something differently. Pretty typical recipe for the bottom of the page.
I'll note that I didn't vote either way on your comment so as to not bias it. Though simply posting my comment might actually sway people to vote it up - there is also a very strong contrarian trend on HN as well.
I suspect your comment may actually cause people to downvote the OP.
bye bye HN. going to get some work done.
> Fine, I'll delete the post then.
Why? Screw the downvotes, thanks for writing that.
It beats the crap out of all those so called 'success stories' that if you look at them closely merely amount to a half-assed hobby project that accidentally made some money.
FWIW: My partner Michael in 1999 suggested that besides live content we should find a way to easily host videos. I nixed the idea.
For an encore, a couple of years later when confronted with gamers using our service to live-stream their games I wrote a bot to block them.
Youtube and Twitch happened anyway :)
Why? Screw the downvotes, thanks for writing that.
It beats the crap out of all those so called 'success stories' that if you look at them closely merely amount to a half-assed hobby project that accidentally made some money.
FWIW: My partner Michael in 1999 suggested that besides live content we should find a way to easily host videos. I nixed the idea.
For an encore, a couple of years later when confronted with gamers using our service to live-stream their games I wrote a bot to block them.
Youtube and Twitch happened anyway :)
Actually, I'm on your side here, which I why I wrote the FYI so you could understand why this would (likely) not get much love.
Don't worry, don't lose too much sleep over it.
You forget that Uber was the last one to market with ridesharing. Lyft and Sidecar were out there faster. The reason why Uber is huge is because it was the first company to take all its money and go all-in into growth, by any means necessary. They spent and grew and got more funding until they were global within a few years, unlike most other companies. Their growth strategy is unprecedented and what is the most special about Uber, not the app itself, or even the idea.
You would most likely not have duplicated their growth strategy, and would have gotten steamrolled. At this point, there's no way you could get your foot in the door next to Lyft or Uber, without significant funding.
You forget that Uber was the last one to market with ridesharing. Lyft and Sidecar were out there faster. The reason why Uber is huge is because it was the first company to take all its money and go all-in into growth, by any means necessary. They spent and grew and got more funding until they were global within a few years, unlike most other companies. Their growth strategy is unprecedented and what is the most special about Uber, not the app itself, or even the idea.
You would most likely not have duplicated their growth strategy, and would have gotten steamrolled. At this point, there's no way you could get your foot in the door next to Lyft or Uber, without significant funding.
I think there are some strategies that may still work.
FWIW, back then my friends sounded a lot what you are saying. Oh it's too hard. Oh you'll be up against big boys.
And I didn't do it b/c I'm a bit of a perfectionist. Uber did it. And, from what I understand, they did it by hiring someone off an offshore programming website. MVP.
And they built the human pyramid. That's what you need to do to retire. Build a human pyramid.
FWIW, back then my friends sounded a lot what you are saying. Oh it's too hard. Oh you'll be up against big boys.
And I didn't do it b/c I'm a bit of a perfectionist. Uber did it. And, from what I understand, they did it by hiring someone off an offshore programming website. MVP.
And they built the human pyramid. That's what you need to do to retire. Build a human pyramid.
I'm troubled by the things that you say and your tone. I think you should talk with a therapist.
Money is not everything. You don't have to be a millionaire to have children. You don't need to be filthy rich to retire.
But you also have to accept that you would never, ever have built Uber. The growth strategy was executed perfectly, so far. So don't feel bad that you didn't finish the app, it wouldn't have made a difference.
So please move on, have a family, stop thinking about money.
Money is not everything. You don't have to be a millionaire to have children. You don't need to be filthy rich to retire.
But you also have to accept that you would never, ever have built Uber. The growth strategy was executed perfectly, so far. So don't feel bad that you didn't finish the app, it wouldn't have made a difference.
So please move on, have a family, stop thinking about money.
> I'm 43 and would like to start a family.
Don't wait for success or money if you want to start a family, there really never is a 'right' time.
Don't wait for success or money if you want to start a family, there really never is a 'right' time.
Why does HN limit the depth of replies? Just to keep the page looking snappy & fresh?
That's pretty awesome that you guys thought of hosting videos. The idea escaped me, even after watching photo.net & then Flickr. I was working on an idea back then & the issue was the cost of bandwidth, right? Sure.. put videos on the Internet... but how would you ever pay for that much bandwidth? I guess that's why a Silicon valley crew did it. They could somehow see the decline in bandwidth pricing, understood how much extra fiber capacity there was.
We should have gotten together then. I owned the domain fullscreen.com (and I made nice websites!)
Software is hard! The winners show what it takes. Just put something out there! AirBNB ruby on rails! Facebook... PHP! Google... python!
That's pretty awesome that you guys thought of hosting videos. The idea escaped me, even after watching photo.net & then Flickr. I was working on an idea back then & the issue was the cost of bandwidth, right? Sure.. put videos on the Internet... but how would you ever pay for that much bandwidth? I guess that's why a Silicon valley crew did it. They could somehow see the decline in bandwidth pricing, understood how much extra fiber capacity there was.
We should have gotten together then. I owned the domain fullscreen.com (and I made nice websites!)
Software is hard! The winners show what it takes. Just put something out there! AirBNB ruby on rails! Facebook... PHP! Google... python!
> Why does HN limit the depth of replies?
OH.
I felt like I was going insane reading some of the comments that seemed like they had no context. Ha. (Now to figure out what the proper ordering is? Unless it's deleted)
Thanks for the context
OH.
I felt like I was going insane reading some of the comments that seemed like they had no context. Ha. (Now to figure out what the proper ordering is? Unless it's deleted)
Thanks for the context
He deleted his initial post. He claimed to have written a taxi app early on, and regrets not finishing it.
Well, to be honest, the cost of bandwidth was one of the factors that caused me to nix the project, we were having enough bandwidth problems as it was (we got kicked off the international backbone because the webcams saturated it).
Was the first iteration of Google really written in Python?
That's quite interesting.
Was the first iteration of Google really written in Python?
That's quite interesting.
Pretty sure it was Java: https://groups.google.com/forum/#!msg/comp.lang.java/aSPAJO0...
You are right. Time to get started.
And if you have new or growing product lines that incorporate into both revenue and expenses like Uber Pool does, you'd see exactly this shift _without a change in the underlying unit economics_. Which means that, not only are they losing money faster than ever, but they have no mechanism to stop the bleeding.