Uber Posts $708M Loss as Finance Head Leaves(wsj.com)
wsj.com
Uber Posts $708M Loss as Finance Head Leaves
https://www.wsj.com/articles/uber-posts-708-million-loss-as-finance-head-leaves-1496272500
238 comments
> And what most people miss, is that the 3.4 billion is the 30% cut Uber takes from a ride. Prices don't have to rise 20% to break even, prices have to rise 6%
No, they have to rise by more than that. Your math is technically correct (a 6% rise gives you an extra $700 million), but you are assuming that the price increase goes entirely to Uber. There is no way Uber can increase prices by 6% and give none of that upside to their drivers - they would flee to platforms offering better terms (like Lyft).
If Uber was to be profitable this past quarter they wouldn't have needed an extra $700 million in fares, but an extra 2.3 billion - which is a 20% rise.
No, they have to rise by more than that. Your math is technically correct (a 6% rise gives you an extra $700 million), but you are assuming that the price increase goes entirely to Uber. There is no way Uber can increase prices by 6% and give none of that upside to their drivers - they would flee to platforms offering better terms (like Lyft).
If Uber was to be profitable this past quarter they wouldn't have needed an extra $700 million in fares, but an extra 2.3 billion - which is a 20% rise.
You haven't been paying attention to what Uber's been doing. They started by charging flat fares on Pool, now they're charging flat fares for all rides. They're decoupling the price that the rider pays from what the driver gets. Pool makes this obfuscation easier, since the calculation is much more complex for rides that are partially shared. They do seem to be raising prices on riders without passing it on to drivers.
>They're decoupling the price that the rider pays from what the driver gets.
And this is somewhat transparent, right? Everyone loves getting middle manned, I'm sure neither drivers nor passengers will mind.
Getting a lift is a commodity. It needs to be cheaper form the buyer's perspective and it needs to pay better from the driver's perspective. Not sure how that works while also earning bing money for the middle man. Uber smells like a self-driving play, and that's falling apart.
And this is somewhat transparent, right? Everyone loves getting middle manned, I'm sure neither drivers nor passengers will mind.
Getting a lift is a commodity. It needs to be cheaper form the buyer's perspective and it needs to pay better from the driver's perspective. Not sure how that works while also earning bing money for the middle man. Uber smells like a self-driving play, and that's falling apart.
(on the assumption that your first sentence was sarcastic) Everyone does love getting middle-manned, it's why uber is successful. We had taxi services before uber, but they were unreliable and sometimes meant calling around 3 or 4 to get a cab at busy times. No accountability of where the cab was if it was late / no showed. Uber changed that and people flocked to them in their droves. Same for airbnb and basically any other major marketplace app / site.
They may now be looking like an autonomous driving play, but that is not why the company started.
They may now be looking like an autonomous driving play, but that is not why the company started.
People use uber because it is cheap and easy. If taxis and other ride services roll out apps (which they are) then uber has lost its advantage in ease of use. If uber starts to feel expensive as well then they have lost everything that made them popular. Uber has to start squeezing someone for $700m a quarter. That squeeze isn't going to feel good.
That's happened though. I live in London, where black cabs are the de facto standard. They should be one of the examples of the most organised taxi 'companies' in the world - brilliant brand, effective organisation and a technically closed market and yet they have 3 major apps (gett, mytaxi(hailo), taxiapp) meaning they can't offer the same experience as uber. Black cabs also cost 4x what an uber costs for the same journey, which certainly doesn't help.
People want 1 app which does taxis - uber fits that bill pretty nicely, and to be honest, I don't think users would really notice if they bumped prices by 10%, certainly not in London.
People want 1 app which does taxis - uber fits that bill pretty nicely, and to be honest, I don't think users would really notice if they bumped prices by 10%, certainly not in London.
That's certainly true - things like Pool make it easier to obfuscate the cut Uber takes. But still, price rises don't just have a potential to alienate passengers, but drivers as well. If anything, drivers may well be more fickle than passengers, since someone who takes Uber once or twice a week has less to lose than someone driving for them 8 hours a day.
True but a 6% increase overboard is practically invisible.
Will you notice if you pay $7.51 one day, and 7.96 the next day? What with all the surge pricing, route changes, time of day pricing, and other schemes Uber throws at you, you're lucky to get the same price day to day.
Will you notice if you pay $7.51 one day, and 7.96 the next day? What with all the surge pricing, route changes, time of day pricing, and other schemes Uber throws at you, you're lucky to get the same price day to day.
If they are so invisible not to matter, then why aren't they higher already? Why would Uber lose money if they didn't feel like they have to?
I think there is always the factor of other apps and e.g google maps making prices easily available for comparison etc.
If Uber increases from $7.51 to $7.96 you might not see the difference in your head, but then if for example lyft is offering $7.80 for the same ride, whats more likely for you to choose?
I think they'd be very careful with increasing prices and wait their competitors to increase prices first so they can follow up, or else they might run themselvs out of business.
If Uber increases from $7.51 to $7.96 you might not see the difference in your head, but then if for example lyft is offering $7.80 for the same ride, whats more likely for you to choose?
I think they'd be very careful with increasing prices and wait their competitors to increase prices first so they can follow up, or else they might run themselvs out of business.
To be fair if you take an uber regularly on a regular route you know how much it is going to cost. Sure they could bump up prices when a user takes a journey they don't usually take but it is noticeable when your regular ride cost increases.
they can 'simply' (probably not that simple, of course), introduce higher fares for new users. never used uber myself, and if i did, I'd have little to compare the cost to. That 6% they need could easily be 7, 8, 9 or 10%, and I wouldn't know.
In my case, at least, living in NYC, I compare prices with what I pay for standard Yellow Cabs. Sometimes the Uber prices are not that much lower for routes that I know. In NYC, the Uber and Yellow Cab rates are almost the same. Compare that with Chicago which has far more reasonable rates. All of the inputs (car cost and operations, gas, labor of driver) is the same in NYC and Chicago, yet NYC is far, far more expensive for users.
Gett and Via (the later is a carpooler) has much better rates.
For the rates Uber charges in NYC (UberX)
Base Fare: $2.55. (NYC Yellow Cab - $2.50) Per Minute: $0.35. (Yellow - $.50) Per Mile: $1.75. (Yellow - $2.50) Cancellation Fee: $5 (Yellow -- no cancellation) Service Fees: $0 Minimum Fare: $8. (Yellow - no minimum)
Chicago: (Uber X)
Base Fare: $1.70 Per Minute: $0.20 Per Mile: $0.95 Cancellation Fee: $5 Service Fees: $1.40 Minimum Fare: $4.40
For the rates Uber charges in NYC (UberX)
Base Fare: $2.55. (NYC Yellow Cab - $2.50) Per Minute: $0.35. (Yellow - $.50) Per Mile: $1.75. (Yellow - $2.50) Cancellation Fee: $5 (Yellow -- no cancellation) Service Fees: $0 Minimum Fare: $8. (Yellow - no minimum)
Chicago: (Uber X)
Base Fare: $1.70 Per Minute: $0.20 Per Mile: $0.95 Cancellation Fee: $5 Service Fees: $1.40 Minimum Fare: $4.40
</conjecture>
Lyft just isn't a real competitor outside of major American cities right now. Go to a city without an international airport and see how many lyft drivers there are.
Lyft just isn't a real competitor outside of major American cities right now. Go to a city without an international airport and see how many lyft drivers there are.
Oh, for sure. But being spread thinly over dozens of small markets isn't necessarily a better idea than concentrating on a few large ones.
Counter example India, Lyft can now never come here. Soon it will be one of Uber's biggest market.
Ola seems to be doing fine and I think they've some sort of partnership with lyft where at some point in time you'll be able to use the lyft app and hail ola rides. This hasn't happened yet, though.
Why not?
We had a local competitior backed by soft bank. They are in bad shape. All because of execution. I don't see any other company able to match that ruthlessness.
So, Uber will be able to take the entire market as long as they don't make it lucrative?
That seems to be Uber's plan everywhere, and they look quite successful at it.
That seems to be Uber's plan everywhere, and they look quite successful at it.
I believe that Lyft doesn't have to compete globally with Uber to be a successful business in its own right. I also believe that Uber isn't immune from being crippled by competitors that operate in a very small but key subset of Uber's markets.
There is very little network effect with Uber. Sure, you can hop off a plane anywhere in the world and open Uber to get a car, but that is a very small number of people overall. I would contend that most people use whichever ride-sharing service is available and most economical in their own city, and if that same service is available on the rare occasion that they travel, then bonus.
Of course, if Uber beats everyone else to the punch with proprietary self-driving cars and undercuts prices profitably, they win. There seem to be some very large issues with that, however.
There is very little network effect with Uber. Sure, you can hop off a plane anywhere in the world and open Uber to get a car, but that is a very small number of people overall. I would contend that most people use whichever ride-sharing service is available and most economical in their own city, and if that same service is available on the rare occasion that they travel, then bonus.
Of course, if Uber beats everyone else to the punch with proprietary self-driving cars and undercuts prices profitably, they win. There seem to be some very large issues with that, however.
You're ignoring that businessmen who travel all the time are very heavy users of Uber and similar services.
I'm not even a frequent flyer, but I'd estimate that a good 80-90% of my Uber usage is travel-related. At home, I have tons of other options to get around, but on a tight schedule in an unfamiliar city, I basically default to Uber all the time, because I rarely have the time or risk tolerance explore alternatives.
One of the things I love about Uber is that I can use it in SF, Singapore, Manila, Helsinki, wherever. It also works sufficiently well that I have near-zero incentive to try out Lyft/Grab/Ola/whatever, particularly since this usually involves yet another tedious sign-up process of entering credit cards and PIN confirmations and yadda yadda.
I'm not even a frequent flyer, but I'd estimate that a good 80-90% of my Uber usage is travel-related. At home, I have tons of other options to get around, but on a tight schedule in an unfamiliar city, I basically default to Uber all the time, because I rarely have the time or risk tolerance explore alternatives.
One of the things I love about Uber is that I can use it in SF, Singapore, Manila, Helsinki, wherever. It also works sufficiently well that I have near-zero incentive to try out Lyft/Grab/Ola/whatever, particularly since this usually involves yet another tedious sign-up process of entering credit cards and PIN confirmations and yadda yadda.
Yeah but frequent flying businessmen are also the kind of people who will do research and pick better options quickly if they are available, it's not plausible for Uber to have a permanent monopoly.
One of Uber's massive problems is lack of predictability. When going to/from the airport I can't fuck around with surge pricing, I need to be able to have a travel budget that doesn't change sharply for situations out of my control. I don't want to miss planes. A service like Blacklane (which by the way is now in the US and is growing very quickly yet seems to rarely make the articles that talk about Uber's competition) neatly solves that problem for you, and generally has better service and more professional drivers.
I am a frequent flier and your idea that there's zero-incentive to have a backup or alternate option to Uber ready to go doesn't resonate with me. Uber isn't reliable enough to forget about other options, and as long as those exist and are viable Uber's supposed "monopoly" strategy will likely be regarded in retrospect as expensive and stupid waste of capital.
One of Uber's massive problems is lack of predictability. When going to/from the airport I can't fuck around with surge pricing, I need to be able to have a travel budget that doesn't change sharply for situations out of my control. I don't want to miss planes. A service like Blacklane (which by the way is now in the US and is growing very quickly yet seems to rarely make the articles that talk about Uber's competition) neatly solves that problem for you, and generally has better service and more professional drivers.
I am a frequent flier and your idea that there's zero-incentive to have a backup or alternate option to Uber ready to go doesn't resonate with me. Uber isn't reliable enough to forget about other options, and as long as those exist and are viable Uber's supposed "monopoly" strategy will likely be regarded in retrospect as expensive and stupid waste of capital.
As a business traveller you don't really care about the price as it's paid by your employer. So you'll take the fastest and most comfortable option. In many cities that's still a cab as they are much faster to get at airports than Ubers.
The other alternative are exec cars which Uber offers but which will often be pre-booked locally.
I think Uber could get many business travellers on board if they'd offer some rewards system (similar to airlines). Otherwise there's no reason to be loyal to Uber if a local cab or some other hire service (e.g. Lyft, Addison Lee in London) are faster to use.
The other alternative are exec cars which Uber offers but which will often be pre-booked locally.
I think Uber could get many business travellers on board if they'd offer some rewards system (similar to airlines). Otherwise there's no reason to be loyal to Uber if a local cab or some other hire service (e.g. Lyft, Addison Lee in London) are faster to use.
Uber already has a partnership with SPG (Starwood Hotels). Catch an Uber, get hotel points; catch an Uber while staying at a SPG hotel, get even more points.
https://www.spgpromos.com/uber/
https://www.spgpromos.com/uber/
I think their point was that well-off people who travel all the time are still a tiny portion of the population.
> I rarely have the time or risk tolerance explore alternatives.
If your goal is to save time and mitigate risk, then pre-book with a local service before you even depart. Or, as many business travelers do, ask the company/person you're meeting to arrange a car to collect you. Then you just have to look out for one of those drivers in Arrivals holding a card with your name.
Many of the international airports I've traveled to have excellent transport links to the city centre, primarily by rail. They're quick, cost effective and low risk.
I don't see a compelling reason to book with Uber on arrival.
If your goal is to save time and mitigate risk, then pre-book with a local service before you even depart. Or, as many business travelers do, ask the company/person you're meeting to arrange a car to collect you. Then you just have to look out for one of those drivers in Arrivals holding a card with your name.
Many of the international airports I've traveled to have excellent transport links to the city centre, primarily by rail. They're quick, cost effective and low risk.
I don't see a compelling reason to book with Uber on arrival.
> Many of the international airports I've traveled to have excellent transport links to the city centre, primarily by rail. They're quick, cost effective and low risk.
While I agree with your point, rarely are the rail links less risky to find/buy tickets/navigate than simply walking out the door at arrivals and catching a cab door to door.
While I agree with your point, rarely are the rail links less risky to find/buy tickets/navigate than simply walking out the door at arrivals and catching a cab door to door.
It's a good point about the ticketing. However, trains don't get stuck in traffic (generally).
The two airports I fly into quite regularly are London Heathrow and Vienna. At both locations I'd prefer to catch the Airport Express train than mess about with taxis in traffic.
I was in Hong Kong a few months ago and it was extremely straight forward to catch the airport train. Very, very obvious where to go, how to buy tickets etc.
Try catching a cab from Sydney Kingsford Smith airport into the city during peak hour. You will sit on the Eastern Distributor for a long time.
The two airports I fly into quite regularly are London Heathrow and Vienna. At both locations I'd prefer to catch the Airport Express train than mess about with taxis in traffic.
I was in Hong Kong a few months ago and it was extremely straight forward to catch the airport train. Very, very obvious where to go, how to buy tickets etc.
Try catching a cab from Sydney Kingsford Smith airport into the city during peak hour. You will sit on the Eastern Distributor for a long time.
It doesn't work at all in Germany, Spain, Iceland, and in smaller towns in UK. Uber isn't very reliable in Europe
Do Uber drivers even see the fair that is charged their passengers? If not, then it's not clear Uber can't keep most or all of a 6% price increase without losing drivers to Lyft.
they don't see the fare charged to the customer, but people have figured out the customer is charged a higher fare than the driver sees by comparing notes, there is a lawsuit about it currently.
http://www.latimes.com/local/lanow/la-me-uber-drivers-lawsui...
http://www.latimes.com/local/lanow/la-me-uber-drivers-lawsui...
And raising fares by 20% is going to reduce demand.
You're absolutely right.
> Uber is doing fine.
Yes and no, they are in a space which is extremely price competitive. I literally am watching Uber take a dramatic hit in my area right now. Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices.
Now, I only use Lyft - as do most of the people. Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company.
I realize this is ancidotal, but everywhere I go (I travel a lot, switching between Uber and lyft), Lyft seems to be more popular among drivers and riders. They simply don't use it because of price/market share. However, adjust the price or driver's and the equation changes.
I honestly still don't see them making it out of their situation.
Yes and no, they are in a space which is extremely price competitive. I literally am watching Uber take a dramatic hit in my area right now. Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices.
Now, I only use Lyft - as do most of the people. Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company.
I realize this is ancidotal, but everywhere I go (I travel a lot, switching between Uber and lyft), Lyft seems to be more popular among drivers and riders. They simply don't use it because of price/market share. However, adjust the price or driver's and the equation changes.
I honestly still don't see them making it out of their situation.
I'm not buying that most people use Lyft in your area - passengers or drivers. I believe you think that and your circle of people may also be doing the same, but beyond that, I'm guessing there's a lot of bias. Especially if you're saying everywhere you go Lyft seems to be more popular among riders. It's just not true at all.
For my own anecdote, I'd bet 75% of my FB friends with smartphones within my age range, 21-40, have Uber on their phone or have only ridden Uber. And a fraction of them will have Lyft. Among people I actually know, this is roughly the case, with Lyft being a bit more popular, but that's because of who I am/surround myself with.
For my own anecdote, I'd bet 75% of my FB friends with smartphones within my age range, 21-40, have Uber on their phone or have only ridden Uber. And a fraction of them will have Lyft. Among people I actually know, this is roughly the case, with Lyft being a bit more popular, but that's because of who I am/surround myself with.
As long as we're sharing anecdotes, most of the people I know, parents and young kids included, have made the switch to Lyft starting about 8 months ago. They seem to be the less evil company, so people enjoy working for and using them.
Come to think of it, the question of "evil" seems almost irrelevant in the big picture. Even if say Lyft is marginally more ethical than Uber, the end long-term result will still be a fleet of drivers competing against each other in Taylorism mode to be paid a pittance, only to be eventually replaced by automated vehicles.
Anecdotally, my aged father (72) uses Uber. Uber has spread pretty well to 3rd world countries and is popular in all the vacation spots.
Some people I know tried to switch to Lyft when all the bad PR on Uber hit, but the prices were higher so either they switched back to Uber or the more passionate ones are now riding the metro again.
Some people I know tried to switch to Lyft when all the bad PR on Uber hit, but the prices were higher so either they switched back to Uber or the more passionate ones are now riding the metro again.
I don't know about other cities but in teh Bay Area prices are pretty evenly matched.
Most of my family and friends exclusively use Uber because of Travis and his values.
I wouldn't doubt it, Uber comes preinstalled on most android phones.
Came pre-installed on my Lumia phone too.
And was the second app, which I deleted. Right after Facebook.
And was the second app, which I deleted. Right after Facebook.
While anecdotes are clearly anecdotal - the entirety of my company has started switching. The constant bad press, and quite frankly the CEO being such a jerk has been enough to get my colleagues to almost universally switch. The cost difference is about 3rd on the list of priorities for most business users.
Just thought I'd point out that, in addition to name calling not being very nice in general, it's particularly in poor taste right now given that the person in question is grieving a family death that happened just this weekend[1]
[1] http://money.cnn.com/2017/05/27/technology/uber-travis-kalan...
[1] http://money.cnn.com/2017/05/27/technology/uber-travis-kalan...
I didn't know about this, and while it's sad, it doesn't excuse his past actions and in the context of this post it doesn't matter. If the post was about his mother passing, and someone mentioned how much of a jerk he is, that's in much worse taste. Saying it in a comment thread on a post about Uber's loss is not in bad taste.
> Saying it in a comment thread on a post about Uber's loss is not in bad taste.
I dunno. The comment doesn't seem very relevant, being basically one random guy's opinion of what he read on the 'tubes about another guy he probably never met, and extrapolating that to be some sort of argument about the profitability of a company. To me, it just kinda feels like thinly disguised bandwagoning to get internet points.
I recall people making similarly tone deaf comments about Steve Jobs around the time he took time off due to cancer, or Bill Gates in his early philanthropic days. Perhaps this particular case bothers me more than the average person because I've been through the same loss, but I guess as long as one get internet points, poor taste is forgiven?
I dunno. The comment doesn't seem very relevant, being basically one random guy's opinion of what he read on the 'tubes about another guy he probably never met, and extrapolating that to be some sort of argument about the profitability of a company. To me, it just kinda feels like thinly disguised bandwagoning to get internet points.
I recall people making similarly tone deaf comments about Steve Jobs around the time he took time off due to cancer, or Bill Gates in his early philanthropic days. Perhaps this particular case bothers me more than the average person because I've been through the same loss, but I guess as long as one get internet points, poor taste is forgiven?
I wouldn't assume that everyone knows about the death of his mother. I didn't until you posted the article. In this case, the comment was relevant to its parent because the parent was adding an anecdote about the number of people they know who had ridden Uber versus Lyft, and the comment was adding its own anecdote about their workplace/coworkers switching to Lyft.
Like I said, I think it depends on context. In this case, I wouldn't say it's tone deaf to mention the CEO of Uber being one of the main reasons you don't use Uber anymore, unless the article is directly talking about something bad happening to him. For example, if the article about his mom's death got to the front page, and people made comments about how bad of a CEO he is or he's the main reason they don't use Uber, that's not ok.
Like I said, I think it depends on context. In this case, I wouldn't say it's tone deaf to mention the CEO of Uber being one of the main reasons you don't use Uber anymore, unless the article is directly talking about something bad happening to him. For example, if the article about his mom's death got to the front page, and people made comments about how bad of a CEO he is or he's the main reason they don't use Uber, that's not ok.
Fair point. I agree
I'm completely ignorant of all of this but if the CEOs behaviour is part of his reason for changing loyalties as a customer then it seems highly relevant to me. Even if the CEO is a perfect saint, stating their reasoning is valid IMO.
If people stop using a company because of the behaviour of a CEO, be the real or merely perceived, that must impact profit and is likely to increasingly do so, no?
Well, the parent commenter is entitled to monetarily support or not support whatever company he wants for whatever reason he wants.
At least from my own perception, the character of the CEO usually doesn't come up as relevant for the people using the platform. On the rider side, it's usually been a matter of how convenient/frustrating their experience with any given platform is, and on the driver side, there's generally no concept of loyalty whatsoever; they just try to be on as many platforms as possible to maximize income.
At least from my own perception, the character of the CEO usually doesn't come up as relevant for the people using the platform. On the rider side, it's usually been a matter of how convenient/frustrating their experience with any given platform is, and on the driver side, there's generally no concept of loyalty whatsoever; they just try to be on as many platforms as possible to maximize income.
[deleted]
It's really hard to look at ride sharing apps without being clouded by your own experience. There are likely other people in your town/city who would say most people use uber and 80% of the drivers only drive for uber. It's a weirdly personal experience so its hard to see other peoples point of view which is why we have to rely on statistics like this one that show what's going on without personal experience getting in the way.
> Now, I only use Lyft - as do most of the people.
Define most people. As far as I could tell Uber has a far bigger user base and market share. So I'm not sure how Lyft could suddenly be used the most.
During the whole #DeleteUber protest it took longer to get an Uber at my house in the bay area. Lyft was quicker for about two weeks. Then it shifted back. Now I can't get a Lyft in under 20 minutes whereas Uber is usually 5-8 minutes away.
My experience is anecdotal but I see no evidence to suggest yours was not as well. If there is something showing Lyft taking over a larger slice of the pie then please post it.
Define most people. As far as I could tell Uber has a far bigger user base and market share. So I'm not sure how Lyft could suddenly be used the most.
During the whole #DeleteUber protest it took longer to get an Uber at my house in the bay area. Lyft was quicker for about two weeks. Then it shifted back. Now I can't get a Lyft in under 20 minutes whereas Uber is usually 5-8 minutes away.
My experience is anecdotal but I see no evidence to suggest yours was not as well. If there is something showing Lyft taking over a larger slice of the pie then please post it.
> Lyft came to town
Sounds like the parent is referring to his/her town. It's still anecdotal because surely the parent doesn't have that statistic but it very well may be the case in his/her town.
Sounds like the parent is referring to his/her town. It's still anecdotal because surely the parent doesn't have that statistic but it very well may be the case in his/her town.
Hmm. Fair enough, assumed new context from paragraph. Regardless some data would be interesting here as I experienced seemingly the exact opposite. Lyft is essentially useless in my part of the bay area.
> Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices.
Where is this and what facts is this number based on ?
In Australia for example Lyft is simply non existent. And sure it's a smaller market but it demonstrates that Uber's aggressive international expansion strategy is the right one.
> Plus, most of the Uber drivers are shady
Pretty libellous, ridiculous and unfair thing to say.
Where is this and what facts is this number based on ?
In Australia for example Lyft is simply non existent. And sure it's a smaller market but it demonstrates that Uber's aggressive international expansion strategy is the right one.
> Plus, most of the Uber drivers are shady
Pretty libellous, ridiculous and unfair thing to say.
it demonstrates that Uber's aggressive international expansion strategy is the right one.
Does it?
"We lose money on every customer, but we'll make it up in volume" is one of the classic ways to run a business into bankruptcy. Sometimes, taking one's time is the far sounder strategy, even if a hyper-growth competitor is "everywhere" and "dominating" in the eyes of the uninformed public.
Does it?
"We lose money on every customer, but we'll make it up in volume" is one of the classic ways to run a business into bankruptcy. Sometimes, taking one's time is the far sounder strategy, even if a hyper-growth competitor is "everywhere" and "dominating" in the eyes of the uninformed public.
They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market.
In other words, even Lyft's best case scenario would be a huge step down for Uber.
In other words, even Lyft's best case scenario would be a huge step down for Uber.
No amount of "we were briefly a huge multinational" will compensate for a fundamentally unsound business.
Sooner or later the free money is going to run out and Uber is going to have to stop hemorrhaging nearly a billion dollars every quarter. When that day comes they're not going to have a lot of options to stop the bleeding: raising prices and cutting back the markets they operate in are likely to be the first things they do, or are forced to do by investors.
Meanwhile, the way you build a huge multinational is by first figuring out a way to make money and then scaling it to everywhere, not by figuring out how to be everywhere and then realizing "crap, we have to actually turn a profit now".
Sooner or later the free money is going to run out and Uber is going to have to stop hemorrhaging nearly a billion dollars every quarter. When that day comes they're not going to have a lot of options to stop the bleeding: raising prices and cutting back the markets they operate in are likely to be the first things they do, or are forced to do by investors.
Meanwhile, the way you build a huge multinational is by first figuring out a way to make money and then scaling it to everywhere, not by figuring out how to be everywhere and then realizing "crap, we have to actually turn a profit now".
They are growing revenue faster than their losses and they are profitable in mature markets. That sounds like a fundamentally sound business to me. The cognitive dissonance you're suffering from is the inability to believe that investors will take on losses on the order of a billions of dollars to build a profitable business. Millions of dollars are okay, but changing millions to billions and people are like "that money has to run out eventually". That's not how investors operate. If the opportunity is on the order of billions of dollars as well (maybe trillions), investments of billions of dollars isn't that big in the grand scheme of things. What matters is that the size of the opportunity is large and that revenue grows faster than losses. So long as those two things are true, there will be no lack of investors willing to pony up the money to be on that gravy train.
I do not believe Uber's future value to investors is equal to the amount of money already put into it, let alone orders of magnitude higher (and "trillions" of dollars -- as you suggest -- is laughable).
In a world where Lyft wins the US market, they then have a battle chest for future expansion.
Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.
Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.
Lyft can't expand outside the US because there are already local competitors. If I'm happy using Grab, why would I bother installing Lyft?
Uber is apparently already profitable in the US. Does anyone know if Lyft is? If it is not, then that would suggest that Lyft is more guilty than Uber of subsidizing rides in order to win market share.
2016 numbers:
Lyft Revenue: $700 million
Lyft Losses: $600 million
Uber Revenue: $6 billion
Uber Losses: $2.8 billion
Uber has a solid worldwide presence. Lyft does not.
You can go into nearly any state and most countries (I think all of the first world countries and a bunch of second world ones too) and book an Uber.
As long as that stays true and Uber continues to grow outside of the US, Lyft doesn't stand a chance.
If Lyft could light up worldwide scale right now, they absolutely would have. Something is holding them back. It's likely new rideshare laws that Uber spawned due to it having first mover advantage.
Disclosure: I am a Lyft user and deleted my Uber account.
You can go into nearly any state and most countries (I think all of the first world countries and a bunch of second world ones too) and book an Uber.
As long as that stays true and Uber continues to grow outside of the US, Lyft doesn't stand a chance.
If Lyft could light up worldwide scale right now, they absolutely would have. Something is holding them back. It's likely new rideshare laws that Uber spawned due to it having first mover advantage.
Disclosure: I am a Lyft user and deleted my Uber account.
Uber is really bad in SouthEast Asia, Grab is by far the most used here, especially in Singapore, Thailand and co.
Uber is also useless in China...
Grab just offers so much more from motorcycle rides, delivery service, payment etc...
In germany and other european countries Uber is also completly useless, they have to use local law abiding apps like MyTaxi.
So no, Uber does not have a solid worldwide presence i would say, Singapore, Germany and other are clearly what u call first world...
In germany and other european countries Uber is also completly useless, they have to use local law abiding apps like MyTaxi.
So no, Uber does not have a solid worldwide presence i would say, Singapore, Germany and other are clearly what u call first world...
> As long as that stays true and Uber continues to grow outside of the US, Lyft doesn't stand a chance.
Well, except they do because the local market is simply huge. There is room for multiple competitors.
Just like we have ATT, Verizon, Etc.
Well, except they do because the local market is simply huge. There is room for multiple competitors.
Just like we have ATT, Verizon, Etc.
Regional monopolies or there is some kind of differentiation between the plans. Additionally, they bribe customers into signing multi-year contracts.
It is a totally different space from taxis, where the experience is mostly fungible.
It is a totally different space from taxis, where the experience is mostly fungible.
Everyone keeps forgetting that Lyft has first-mover advantage. Lyft basically created ride-sharing, Uber was a black-car company and had to play catch-up to Lyft.
lyft somewhat had first mover advantage in SF. Uber had first mover advantage in every other city. Uber already existed in SF and was doing black car rides and a lot of people in NY/SF knew of it - which Uber used to leapfrog Lyft's first move advantage.
> Now, I only use Lyft - as do most of the people. Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company.
Why's that?
Why's that?
Uber is doing fine where I live. No one is using Lyft here. Also this https://xkcd.com/605/
> Now, I only use Lyft - as do most of the people.
Nope.
Nope.
> Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company.
I bet you'll think that you're not a racist or a bigot, and yet you're making the exact same connection a racist or bigot would. Just because someone drives for Uber, they are shady? That's a terrible stereotype to be propagating, just like our esteemed president saying "Most illegal immigrants are rapists."
I bet you'll think that you're not a racist or a bigot, and yet you're making the exact same connection a racist or bigot would. Just because someone drives for Uber, they are shady? That's a terrible stereotype to be propagating, just like our esteemed president saying "Most illegal immigrants are rapists."
The few numbers that Uber posted look like good news for them, but let's not overstate things.
The reason that people post numbers YoY instead of QoQ most of the time is not to artificially inflate numbers. It's because lots of companies have yearly seasonality. If you looked at Apple's numbers for Q4 (real Q4, Oct-Dec, not Apple's fiscal Q4) quarter over quarter, they'd always look like they were on a massive, incredible growth trend. If you looked at their Q1 numbers quarter over quarter, they'd always look like they're shrinking.
Since Uber is sharing a very limited subset of numbers on a purely voluntary basis, it's pretty reasonable to assume that they're showing the ones that make them look good. If they wanted to show YoY numbers, they certainly could. It stands to reason that YoY numbers aren't going to make them look massively better than QoQ numbers.
And, finally, saying that you could "just" raise revenue by 6% and have it all go to the bottom line with no other effects is fantasy -- and even if they could do that, that would make them non-GAAP break-even, not "the kind of profitable company that justifies a $70B valuation."
The reason that people post numbers YoY instead of QoQ most of the time is not to artificially inflate numbers. It's because lots of companies have yearly seasonality. If you looked at Apple's numbers for Q4 (real Q4, Oct-Dec, not Apple's fiscal Q4) quarter over quarter, they'd always look like they were on a massive, incredible growth trend. If you looked at their Q1 numbers quarter over quarter, they'd always look like they're shrinking.
Since Uber is sharing a very limited subset of numbers on a purely voluntary basis, it's pretty reasonable to assume that they're showing the ones that make them look good. If they wanted to show YoY numbers, they certainly could. It stands to reason that YoY numbers aren't going to make them look massively better than QoQ numbers.
And, finally, saying that you could "just" raise revenue by 6% and have it all go to the bottom line with no other effects is fantasy -- and even if they could do that, that would make them non-GAAP break-even, not "the kind of profitable company that justifies a $70B valuation."
Looking at this interesting pdf:
http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_...
It looks like Taxis are seasonal and so they'll see a drop in revenue over summer (page 4). Though elsewhere they note that airport fares are up over summer.
It also looks like there's a large, several day, drop over the Xmas period every year, which could potentially make Q1 better than Q4. Although I know in the UK at least Xmas rates are higher.
Still, without seeing the actual figures and just eyeballing it, it's hard to say.
As you say though, they could have decreased costs just by dropping what they pay their drivers. Ahem, I mean the rate they offer jobs to self-employed definitely-not-employed independent contractors.
(I wasn't able to read the source article, so don't know if they've addressed that).
http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_...
It looks like Taxis are seasonal and so they'll see a drop in revenue over summer (page 4). Though elsewhere they note that airport fares are up over summer.
It also looks like there's a large, several day, drop over the Xmas period every year, which could potentially make Q1 better than Q4. Although I know in the UK at least Xmas rates are higher.
Still, without seeing the actual figures and just eyeballing it, it's hard to say.
As you say though, they could have decreased costs just by dropping what they pay their drivers. Ahem, I mean the rate they offer jobs to self-employed definitely-not-employed independent contractors.
(I wasn't able to read the source article, so don't know if they've addressed that).
When I worked for Flywheel (which was an Uber competitor that uses taxis, and whose customers were concentrated heavily in San Francisco), there were a number of different, crazy seasonal effects.
Rainy weather definitely spiked demand in a big way (I sometimes wonder if Flywheel would have managed to make it over a few more hurdles if California had not been in an intense multi-year drought when I worked there). There was virtually no demand from Christmas to New Years, and then New Years Eve saw demand that was 10x what it was on other days. There are other extremely high-demand holidays such as Halloween and St Patrick's Day. Basically any drinking holiday, for obvious reasons, except 4th of July.
Uber is in many more markets, of course, though I suspect that a smaller number than you'd think are by far the heavyweights in their revenue and an even smaller number are the heavyweights in terms of improving their bottom line. They have surge pricing, which we didn't, and which is presumably better at turning demand into revenue than we were. Other markets may have different relationships with their weather than San Francisco did.
Rainy weather definitely spiked demand in a big way (I sometimes wonder if Flywheel would have managed to make it over a few more hurdles if California had not been in an intense multi-year drought when I worked there). There was virtually no demand from Christmas to New Years, and then New Years Eve saw demand that was 10x what it was on other days. There are other extremely high-demand holidays such as Halloween and St Patrick's Day. Basically any drinking holiday, for obvious reasons, except 4th of July.
Uber is in many more markets, of course, though I suspect that a smaller number than you'd think are by far the heavyweights in their revenue and an even smaller number are the heavyweights in terms of improving their bottom line. They have surge pricing, which we didn't, and which is presumably better at turning demand into revenue than we were. Other markets may have different relationships with their weather than San Francisco did.
I would expect large multinational companies that earn revenue in all timezones and in both the northern and southern hemisphere to exhibit limited seasonality. Figures may be skewed in favor of their larger and more mature markets, but not all countries celebrate the same holidays (like Christmas) and summer and winter and flipped in the northern and southern hemispheres.
I would expect local competitors to exhibit far greater seasonality than any major multinational.
I would expect local competitors to exhibit far greater seasonality than any major multinational.
Warning: Uber counts the entire Uber Pool fare are revenue, which throws off these numbers a lot since I would guess that Uber Pool is the most popular option where available.
Source: https://www.bloomberg.com/news/articles/2017-04-14/embattled...
Source: https://www.bloomberg.com/news/articles/2017-04-14/embattled...
Perhaps I'm being dense, but I don't understand your math. If $3.4 billion represents the 30% Uber cut, then that means total gross bookings is about $11.3 billion. If they raise prices six percent, and have no loss of volume, then total gross bookings comes to about $12 billion.
However, wouldn't you still assume Uber only would get 30% of that extra $700 million in gross bookings? I.e. revenue would only be .3 x $12 billion, which is $3.6 billion, still leaving Uber 500 million short?
However, wouldn't you still assume Uber only would get 30% of that extra $700 million in gross bookings? I.e. revenue would only be .3 x $12 billion, which is $3.6 billion, still leaving Uber 500 million short?
No. What would prevent Uber from taking all 6% raising prices and giving drivers nothing extra?
I think that's a pretty bad assumption. If that's the case, what's to stop Uber from just taking a bigger chunk now and giving drivers less without raising prices? "Market forces" is the obvious answer, and those forces aren't going away.
Lyft.
I would also add that drivers shouldn't be getting extra as right now drivers aren't the ones subsidizing the lower prices.
> prices have to rise 6% (assuming no efficiency improvements via pool etc, which is frankly ridiculous)
If Uber raises 6%, the revenue Uber will decrease. If you raise the price, simply there will be less rides because people will find alternatives such as Lyft, taxi, or even public transportations.
If Uber raises 6%, the revenue Uber will decrease. If you raise the price, simply there will be less rides because people will find alternatives such as Lyft, taxi, or even public transportations.
An irrelevant percent of people will choose to take the bus because their $10 ride is now $10.50.
I agree that they are competing against Lyft on price, but they will both sooner or later have to reach break-even; neither will run at a loss forever. Rides will shift between them, but the rideshare market as a whole will shrink trivially when it does.
I agree that they are competing against Lyft on price, but they will both sooner or later have to reach break-even; neither will run at a loss forever. Rides will shift between them, but the rideshare market as a whole will shrink trivially when it does.
Many of my friends open both Lyft and Uber. They choose whichever is cheaper. Sure, Lyft might take a few more minutes to arrive. If you time it well ahead, it does not cost you more time. For me, I would rather take Lyft even if it is a little more expensive and takes a little longer. I hope Lyft catches up and makes it a real competition, which benefits consumers eventually.
In Australia we only have Uber and taxis. Nobody is switching to taxis because of a 10% price increase. Because most people are using Uber for the fact that they will always come, always pick you up and always drop you off at the right spot.
So it's fantastic that Lyft is doing okay in the US. But Uber is playing a whole different game.
So it's fantastic that Lyft is doing okay in the US. But Uber is playing a whole different game.
Exactly. I'm in Australia and have no idea how Uber and taxi prices compare. I use Uber because of the quality of their product.
Not a big fan of Uber as a company though. If Lyft of another viable competitor set up shop here then I'd be open to switching.
Not a big fan of Uber as a company though. If Lyft of another viable competitor set up shop here then I'd be open to switching.
I can give a very small sample of data. Uber is $30-33 to my suburb on a Thursday night. I even had a $28 once which is ludicrous (I calculated the theoretical minimum cost of the route to be around $27.50 so it was almost a perfect run).
I've caught taxis on the exact same route twice because my phone was dead and I couldn't order an Uber. One was $48 and the other was $55. I believe it's more on a Friday or Saturday (they have some 'off-peak' fee or something), but Uber obviously has the occasional surge on those nights too.
Using Taxis, in Melbourne at least, seems to be lighting money on fire.
I've caught taxis on the exact same route twice because my phone was dead and I couldn't order an Uber. One was $48 and the other was $55. I believe it's more on a Friday or Saturday (they have some 'off-peak' fee or something), but Uber obviously has the occasional surge on those nights too.
Using Taxis, in Melbourne at least, seems to be lighting money on fire.
This is incorrect. We have had private hire vehicles in Australia for years. Many of them are now also taking rides via Uber, but I've had black sedans to/from the airport for as long as I can remember.
The only things Uber add to the service mix is an app and a bad attitude, neither of which create any value for me.
The only things Uber add to the service mix is an app and a bad attitude, neither of which create any value for me.
I've never heard of private hire cars being used by consumers and ordinary people sure as hell aren't using them to goto the pub or shopping centre and back.
What Uber brings to the table isn't high end hire cars but rather UberX which is a game changer for price and quality. Finally taxis can't refuse to take you somewhere or not use the GPS. And not sure how you had a "bad attitude" experience given how seriously drivers take their ratings.
What Uber brings to the table isn't high end hire cars but rather UberX which is a game changer for price and quality. Finally taxis can't refuse to take you somewhere or not use the GPS. And not sure how you had a "bad attitude" experience given how seriously drivers take their ratings.
Let me correct you. I am a consumer and I use private hire cars, because I value their professionalism, cleanliness and punctuality which comes for a very modest premium.
This often surprises Australians, so if you are one of them you're not alone. In my view Australia has a culturally ingrained reverse snobbery, which leads to false judgements about value and utility.
The "bad attitude" I believe is clearly attributed to Uber, not their independent not-employees-at-all contractors, whose exploitation, low income, and zero benefits I have some limited sympathy for.
This often surprises Australians, so if you are one of them you're not alone. In my view Australia has a culturally ingrained reverse snobbery, which leads to false judgements about value and utility.
The "bad attitude" I believe is clearly attributed to Uber, not their independent not-employees-at-all contractors, whose exploitation, low income, and zero benefits I have some limited sympathy for.
Private hire cars are not a realistic alternative to Uber or taxis in most cases, since they generally have to be booked well in advance. In Australia, they're also significantly more expensive than taxis.
Wrong and wrong. I took one to the airport today, I called thirty minutes ahead, and it cost less than a metered fare.
Where in Australia are you, and what company did you use? In both Sydney and Melbourne, all the hire cars I know of cost more.
Melbourne, and I have a VHA account.
Metered fares from my home to MEL are inflated by extensive never-ending roadworks. The fixed-rate private hire cars are excellent value for that route. For everything else it's a modest premium, and one I'm very happy to pay.
>An irrelevant percent of people will choose to take the bus because their $10 ride is now $10.50.
That's not how the market works at scale.
That's not how the market works at scale.
And not all markets behave the same.
So pretending to know what Uber customers will do is asinine.
So pretending to know what Uber customers will do is asinine.
True, but Uber does know, and they probably have teams of data scientists and economists optimizing the fare charge to maximize revenue. My guess is that if Uber could eliminate their losses and suffer no decrease in fares by raising rates 6%, then they would have.
> they will both sooner or later have to reach break-even; neither will run at a loss forever.
This. Subsidies don't scale. When you're company does relatively few rides, you can afford to subsidize rides on the order of dollars. The more rides you do however means can only subsidize rides less and less until it has a negligible effect on a rider's decision to switch providers. At that scale, all companies will start to move away from subsidies.
Subsidies can't buy the same amount of market share at scale without losses growing linearly, which is unacceptable to investors. Subsidies will decline and should eventually disappear in mature markets even with fierce competition. Heavy subsidies really only make sense in immature markets where there is a land grab.
This. Subsidies don't scale. When you're company does relatively few rides, you can afford to subsidize rides on the order of dollars. The more rides you do however means can only subsidize rides less and less until it has a negligible effect on a rider's decision to switch providers. At that scale, all companies will start to move away from subsidies.
Subsidies can't buy the same amount of market share at scale without losses growing linearly, which is unacceptable to investors. Subsidies will decline and should eventually disappear in mature markets even with fierce competition. Heavy subsidies really only make sense in immature markets where there is a land grab.
> If Uber raises [prices] 6%, the revenue Uber [receives] will decrease.
You are assuming facts not in evidence. If you don't know Uber's price elasticity of demand, you can't predict that. It is likely that the number of rides will decrease, but, if it decreases by less than ~6%, their total revenue will increase.
You are assuming facts not in evidence. If you don't know Uber's price elasticity of demand, you can't predict that. It is likely that the number of rides will decrease, but, if it decreases by less than ~6%, their total revenue will increase.
It is a very competitive market. Customers are price-sensitive. I have many friends who open both Uber and Lyft and take whichever is cheaper. Right now, their prices are very close. If Uber raises 6%, their revenue will drop in my area. Besides, if it is that easy to turn a profit, Uber would have done it a while ago. A profitable business is much easier to justify under the current circumstances.
>> Customers are price-sensitive [with varying levels of sensitivity for varying aspects of the service]
That is the source of price elasticity of demand. Customers are not identical.
Some people value convenience of only checking one app more than a small price difference. Some people value the speed of getting a car and if Uber can provide a car 3 minutes faster, may be willing to pay a few percent more. Some people prefer the UX of the Uber app and how fast it is to actually compute a trip / connect to a driver compared to Lyft. Some people are submitting expense reports and would prefer to have all their car service expenses from the same provider, for convenience.
And some people don't.
Just because Uber hasn't turned a profit (which they may have, in local areas, for all we know), doesn't mean they couldn't. It's completely rational for them to price low and attract more customers if they are more able to raise capital than their competitor in order to make it harder for their competitor to stay in business.
That is the source of price elasticity of demand. Customers are not identical.
Some people value convenience of only checking one app more than a small price difference. Some people value the speed of getting a car and if Uber can provide a car 3 minutes faster, may be willing to pay a few percent more. Some people prefer the UX of the Uber app and how fast it is to actually compute a trip / connect to a driver compared to Lyft. Some people are submitting expense reports and would prefer to have all their car service expenses from the same provider, for convenience.
And some people don't.
Just because Uber hasn't turned a profit (which they may have, in local areas, for all we know), doesn't mean they couldn't. It's completely rational for them to price low and attract more customers if they are more able to raise capital than their competitor in order to make it harder for their competitor to stay in business.
I'm so grateful that Uber exists, precisely for those places where those alternatives don't really exist, and so the choices are trying to bum a ride, or god forbid, driving drunk.
You could just not get drunk...
Haha, that is always an option... but I'd rather the drunks be able to use an app to get home, than fight the larger, and largely self-defeating battle of trying to convince or cajole people into not getting out of their heads.
> And what most people miss, is that the 3.4 billion is the 30% cut Uber takes from a ride.
From what I have read/heard, they count all of Uber pool in revenues so this statement isn't entirely correct.
From what I have read/heard, they count all of Uber pool in revenues so this statement isn't entirely correct.
>Yeah... Uber is doing fine.
Okay, let's see them raise prices 6% in an environment with increasingly hostile regulators, increasing competition and a shallow moat and see what happens.
"Just raise prices" demonstrates a lack of fundamental economic analysis; what happens to demand? Outside of of a few city centers, people use Uber because it's cheap, not because it's cool. People will move to alternatives.
Uber is literally giving away rides, then boasting about usage. You think they can easily increase prices?
Okay, let's see them raise prices 6% in an environment with increasingly hostile regulators, increasing competition and a shallow moat and see what happens.
"Just raise prices" demonstrates a lack of fundamental economic analysis; what happens to demand? Outside of of a few city centers, people use Uber because it's cheap, not because it's cool. People will move to alternatives.
Uber is literally giving away rides, then boasting about usage. You think they can easily increase prices?
that's incorrect. $3.4B is their gross revenue (gross bookings) and out of that they probably paid 70% to drivers ($2.4B). i say probably because that assumes a single revenue source, no diffential payments to drivers and no other direct costs (COGS).
so indeed, they would need revenues to go up by ~20% to break even. that in turn means a 20% rise in average prices to break even (again assuming a single revenue source).
so indeed, they would need revenues to go up by ~20% to break even. that in turn means a 20% rise in average prices to break even (again assuming a single revenue source).
No, you're wrong. 3.4B is their revenue, not their gross bookings.
And 100% of Pool fares.
you're right, my bad. in my haste to post before quickly having to get offline earlier, i didn't read carefully. i also couldn't access the WSJ article, so i don't know if there are better numbers in it or not. in any case, here's what i could garner about 1Q2017 by looking at other sites[1][2]:
[1]: https://www.bloomberg.com/news/articles/2017-06-01/uber-s-re... [2]: http://www.upi.com/Business_News/2017/05/31/Uber-posts-impro... [3]: https://www.forbes.com/sites/markrogowsky/2017/04/15/caution...
$7.5B bookings ((1+9%)*$6.9B from 4Q2016)
-$3.2B paid to (non-Pool) drivers
-$0.9B COGS (probably driver acquisition)
------------------------
$3.4B net revenue (GAAP)
-$1.9B paid to Pool drivers
------------------------
$1.5B net revenue (non-GAAP)
-$2.2B other expenses
------------------------
-$0.7B net earnings (or EBIT?)
($3.2B+$1.9B)/$7.5B = 68% paid to drivers (32% take rate [3])
[1]: https://www.bloomberg.com/news/articles/2017-06-01/uber-s-re... [2]: http://www.upi.com/Business_News/2017/05/31/Uber-posts-impro... [3]: https://www.forbes.com/sites/markrogowsky/2017/04/15/caution...
It depends. They have a printing press. So, do you consider their taxi business the printing press on the way to create the ATM or the Bank?
[deleted]
A couple things to note:
1. This is new loss excluding 'employee stock compensation and other items'. Anecdotally I've heard that Uber offers, particularly for advanced technical positions, are extremely stock heavy. This could be a big exclusion. It's also a bit of a double standard since so much was made of Snap's recent losses which were largely stock based compensation driven.
2. Past discussions on HN have noted that Uber counts the full Pool fare as revenue but this is not the case for Uber X or Uber Black. So if Pool is a rising share of rides (I've heard it is) then Uber will show strong revenue growth without a proportional growth in net income.
And a question: How long will Uber's investors tolerate the current situation? The company is losing money at a record setting pace, has a new scandal every day, and has seemingly no plans for a liquidity event. Even though the on-paper growth is fantastic people must want to get their money out. If this was a public company there would be a huge sell off.
1. This is new loss excluding 'employee stock compensation and other items'. Anecdotally I've heard that Uber offers, particularly for advanced technical positions, are extremely stock heavy. This could be a big exclusion. It's also a bit of a double standard since so much was made of Snap's recent losses which were largely stock based compensation driven.
2. Past discussions on HN have noted that Uber counts the full Pool fare as revenue but this is not the case for Uber X or Uber Black. So if Pool is a rising share of rides (I've heard it is) then Uber will show strong revenue growth without a proportional growth in net income.
And a question: How long will Uber's investors tolerate the current situation? The company is losing money at a record setting pace, has a new scandal every day, and has seemingly no plans for a liquidity event. Even though the on-paper growth is fantastic people must want to get their money out. If this was a public company there would be a huge sell off.
If I understood the Reuters article correctly, Uber made $3.4 billion and therefore lost $4.1 billion in the first quarter of 2017.
Can someone help me understand what Uber spends $4.1 billion dollars on in 3 months? Is it because they're subsidizing rides by that much on average? (i.e. paying drivers more than riders pay)
Can someone help me understand what Uber spends $4.1 billion dollars on in 3 months? Is it because they're subsidizing rides by that much on average? (i.e. paying drivers more than riders pay)
They're paying drivers 70% of the fare, so no.
It's a very good question. They must burn a lot of money on developing self driving cars and other research. But can it really be this much?
It's a very good question. They must burn a lot of money on developing self driving cars and other research. But can it really be this much?
Advertising and expanding around the globe would be a good place to start. It's not cheap to find/put top-notch staff on the other side of the world to expand a business, open offices, recruit drivers and customers, etc.
Acquisitions? Lobbying?
An acquaintance started a mapping company, and Uber snatched it up almost overnight. Although I expect a lot was paid in stock, which isn't included in these losses.
An acquaintance started a mapping company, and Uber snatched it up almost overnight. Although I expect a lot was paid in stock, which isn't included in these losses.
[deleted]
It is very different from country to country how they do stuff. When they where in China they heavily subsidized rides, paying drives more than the entire fare, sometimes.
They haven't broken out the losses.
(a) Are they profitable in the US? That would be a huge milestone.
(b) If not entire US, are they profitable in top-X US urban markets, and thus losses are all due to expansion into 2nd/3rd quartile of cities?
(c) Maybe some metrics like "After subtracting R&D efforts in self-driving cars, and legal fees due to multiple lawsuits, we are on average making X cents for every mile/minute driven."
"Our drivers take X days to enroll, and then work for us Y hours per week, and the turnover rate is Z."
(a) Are they profitable in the US? That would be a huge milestone.
(b) If not entire US, are they profitable in top-X US urban markets, and thus losses are all due to expansion into 2nd/3rd quartile of cities?
(c) Maybe some metrics like "After subtracting R&D efforts in self-driving cars, and legal fees due to multiple lawsuits, we are on average making X cents for every mile/minute driven."
"Our drivers take X days to enroll, and then work for us Y hours per week, and the turnover rate is Z."
These are really great questions I would love someone to shed light on.
From internal sources, I can say with some confidence that they are profitable in most major US cities.
(I do not work for Uber, so take this for what it's worth)
(I do not work for Uber, so take this for what it's worth)
Is that under the old accounting system (which paid out too little to drivers) or the correct one?
Last quarter people drew attention to the different accounting methods used for pool versus other uber services, with pool booking the entire price of the ride as revenue rather than just uber's take. Does anyone have a sense of how much of the increase in revenue is due to increased ridership versus a shift in demand towards pool? Do flat fares use the same methodology?
Great example of how the headlines can drive a story more than the story itself.
While Uber may have posted $708 million of losses, it is also up 18% in revenue from last quarter. That's 3.4 billion dollars in the first quarter of 2017.
Uber is making approximately $1,500,000 per hour.
I dislike Uber as much as the next person for ethical reasons, but a company that can achieve millions of dollars in revenue per day, in 7 years, is quite extraordinary.
While Uber may have posted $708 million of losses, it is also up 18% in revenue from last quarter. That's 3.4 billion dollars in the first quarter of 2017.
Uber is making approximately $1,500,000 per hour.
I dislike Uber as much as the next person for ethical reasons, but a company that can achieve millions of dollars in revenue per day, in 7 years, is quite extraordinary.
$1,500,000 per hour in revenue sounds great.
Spending $1,872,000 per hour to bring in $1,500,000 per hour sounds less great.
I understand that it takes money to make money, but this is one of the most extreme cases in a business.
Spending $1,872,000 per hour to bring in $1,500,000 per hour sounds less great.
I understand that it takes money to make money, but this is one of the most extreme cases in a business.
As a value investor or Warren Buffett follower would put it, they are very capital intensive. This can turn into a bad sign if they can't build a moat (monopoly of sorts) or take a hit on their margins.
What I can even begin to imagine is why are they that much capital intensive?
Uber's actual product is a SaaS. Everything else is contracted. Where is that much money going?
Uber's actual product is a SaaS. Everything else is contracted. Where is that much money going?
The fact they're losing money like this doesn't really mean anything because Uber isn't a normal business. It's not some little mom & pop outfit that has bills to pay. This is a company whose investors (e.g. the Saudis) have so much cash a billion here and a billion there barely matters.
It's a place for absurdly wealthy people to park vast sums of cash on the bet that Uber will continue to gobble up marketshare from taxi companies, etc., until they're in a position to disrupt transit in general (and ride sharing services, too) with self-driving cars and who knows what else they'll come up with.
I don't think comparisons with Twitter are all that apt. People need to go from point A to B. No one needs to tweet. The network effect of social networks is valuable but I think that value pales in comparison to transportation. The way we pay backs up this premise: we pay for Twitter and Facebook with our eyeballs and our data, but we pay for Uber with our credit cards.
It's a place for absurdly wealthy people to park vast sums of cash on the bet that Uber will continue to gobble up marketshare from taxi companies, etc., until they're in a position to disrupt transit in general (and ride sharing services, too) with self-driving cars and who knows what else they'll come up with.
I don't think comparisons with Twitter are all that apt. People need to go from point A to B. No one needs to tweet. The network effect of social networks is valuable but I think that value pales in comparison to transportation. The way we pay backs up this premise: we pay for Twitter and Facebook with our eyeballs and our data, but we pay for Uber with our credit cards.
> The fact they're losing money like this doesn't really mean anything because Uber isn't a normal business.
Yeah, Uber is different because of its insane amount of investor money but losing money is still losing money; it can't go on forever. So saying it doesn't mean anything is a bit shortsighted in my opinion.
> It's a place for absurdly wealthy people to park vast sums of cash on the bet that Uber will continue to gobble up marketshare from taxi companies, etc., until they're in a position to disrupt transit in general (and ride sharing services, too) with self-driving cars and who knows what else they'll come up with.
Seems like an extremely risky bet to me. I'm unconvinced they'll be able to make any decent amounts of money in this service especially considering the majority of auto manufacturers are working on similar capabilities; they'll be able to drive the price down far below Uber ever could unless they start manufacturing their own vehicles.
Yeah, Uber is different because of its insane amount of investor money but losing money is still losing money; it can't go on forever. So saying it doesn't mean anything is a bit shortsighted in my opinion.
> It's a place for absurdly wealthy people to park vast sums of cash on the bet that Uber will continue to gobble up marketshare from taxi companies, etc., until they're in a position to disrupt transit in general (and ride sharing services, too) with self-driving cars and who knows what else they'll come up with.
Seems like an extremely risky bet to me. I'm unconvinced they'll be able to make any decent amounts of money in this service especially considering the majority of auto manufacturers are working on similar capabilities; they'll be able to drive the price down far below Uber ever could unless they start manufacturing their own vehicles.
With respect to the second point about hugely wealthy foreign investors parking cash in Uber-like companies, consider that the risk profile of a highly visible company like Uber with very high-volume cash flow, unprofitable though they may be, can often be much lower than the risk profile of keeping the money in the source nation's domestic vehicles. See also: foreign money parked in absurd condos in NYC.
> until they're in a position to disrupt transit in general (and ride sharing services, too) with self-driving cars and who knows what else they'll come up with.
Considering they have a lawsuit against their self driving program [1], I wouldn't put so much faith on that
[1]: https://www.theguardian.com/technology/2017/may/30/uber-fire...
Considering they have a lawsuit against their self driving program [1], I wouldn't put so much faith on that
[1]: https://www.theguardian.com/technology/2017/may/30/uber-fire...
s/park/burn/
People were saying the same thing about Twitter forever and turned out to be largely wrong. I have a feeling the company making billions of dollars in revenue has some smart people who figured out how not to mess this up.
But who knows maybe Uber will stop being the dominate taxi / self-driving car company globally over the next decade and mess it all up. Or not... but I doubt this large expenditure was done without foresight. The question is whether they can dominate for years to come in a high-growth industry, which it seems likely given the wide gap between them and the competition.
But who knows maybe Uber will stop being the dominate taxi / self-driving car company globally over the next decade and mess it all up. Or not... but I doubt this large expenditure was done without foresight. The question is whether they can dominate for years to come in a high-growth industry, which it seems likely given the wide gap between them and the competition.
> People were saying the same thing about Twitter forever and turned out to be largely wrong.
Twitter lost 456 million dollars in 2016 [1] and I don't remember them ever being profitable so i don't know how those people are wrong.
[1]: https://en.wikipedia.org/wiki/Twitter
Twitter lost 456 million dollars in 2016 [1] and I don't remember them ever being profitable so i don't know how those people are wrong.
[1]: https://en.wikipedia.org/wiki/Twitter
If you look, their losses are because of stock-based comp, not because of spending. It's generally a GAAP loss, not a cash loss.
That doesn't make it less real. The company is giving away shares and investors are diluted. That may be a good deal if the stock is overvalued, but probably investors do not share that view.
It still means that their owners won't see any of the money generated by the company. Before compensation, most companies are profitable. And in the end it doesn't matter to the shareholder if you pay stock compensation or cash.
Not true. Stock compensation is dilutitive to existing shareholders putting future pressure on earnings per share and generally means you'll see a share buyback further reducing cash on balance sheet or increasing debt. Further, large blocks of lockup expirations cause selling pressure. Once talent sells stock compensation how do you then retain them? Do you grant more shares diluting existing shareholders further?
It is different for incentives but not for the actual outcome. Obviously you'd have to compare the same compensation levels, i.e. 100k in cash vs 100k in stocks (at payout).
For start ups it can turn out cheaper as the compensation will be lower in stocks if the company doesn't perform well. From a shareholder perspective it's compensation and shouldn't be treated differently. Excluding it from costs is dangerous as it gives the impression that it's optional costs when in reality, you need to pay the stock compensation to retain talent.
For start ups it can turn out cheaper as the compensation will be lower in stocks if the company doesn't perform well. From a shareholder perspective it's compensation and shouldn't be treated differently. Excluding it from costs is dangerous as it gives the impression that it's optional costs when in reality, you need to pay the stock compensation to retain talent.
Are we talking about the same twitter? My understanding is they are not doing some well currently. Just because the doors are open for business doesn't mean said business is thriving.
Also, twitter is a platform that has exclusivity. Uber is easily replaceable with Lyft or a taxi service's app. Just because a friend is using Uber doesn't mean I have to. The same doesn't apply to twitter, the platform is the value. This is what kept and keeps twitter afloat, Uber on the other hand paved the way for a shift in the way we consume cars as a service.
Also, twitter is a platform that has exclusivity. Uber is easily replaceable with Lyft or a taxi service's app. Just because a friend is using Uber doesn't mean I have to. The same doesn't apply to twitter, the platform is the value. This is what kept and keeps twitter afloat, Uber on the other hand paved the way for a shift in the way we consume cars as a service.
Are you sure they were wrong about twitter? It still loses money. I am not saying that twitter isn't valuable, it just may have been overvalued. You certainly lost money if you bought stock in it five years ago.
>I have a feeling the company making billions of dollars in revenue has some smart people who figured out how not to mess this up.
see: enron
see: enron
I buy gas from across the street for 3 dollars a gallon. I sell it for 2. I sell 1.5 million dollars an hour. My business is doing great.
I think the problem is that you are not doing any value-add, or refinement. If you were somehow enhancing the gas, at a loss, then the example isn't so ridiculous.
Are you also doing self driving car research from the money?
Do you think Uber has spent 15 billion dollars on research?
I have a bridge to sell you if you do.
I have a bridge to sell you if you do.
The reason they can make so much money is in part due to their lack of ethics and willingness to break rules/regulations. They haven't done anything extraordinary; they're just more willing to engage in shady behavior for that extra buck.
Revenue: $3.4B
Loss: $708M
Growth: 18% Quarter over quarter
Cash to burn: $7.2B
With the current burn rate, Uber can burn another 10 quarters.
With the current burn rate, Uber can burn another 10 quarters.
Well the loss this past quarter went down. Though yeah, it doesn't seem like they are looking to break even any time soon.
That would be at 0% growth, which is unlikely.
If much of the growth comes from Pool (where gross fares count as revenues, not their cut), growing revenue could actually increase losses.
they also have about 3B in credit available to them
Uber is great, but I've relocated to Bali and the competitors here are doing such a fantastic job at giving me reasons not to use Uber.
Go-jek is cheaper, you can pay with cash, and they offer like 15 other services like... go-food, go-massage, go-cleaning, etc.
It's incredible.
Go-jek is cheaper, you can pay with cash, and they offer like 15 other services like... go-food, go-massage, go-cleaning, etc.
It's incredible.
So Uber made 612M more in revenue and lost 283M less money, in 17Q1 than 16Q4.
Naively, that seems like a good sign (for Uber), but it could also just be that they stopped growth spending or are hiding losses in unreported figures.
Does anyone have more insight in to what could have caused it?
Naively, that seems like a good sign (for Uber), but it could also just be that they stopped growth spending or are hiding losses in unreported figures.
Does anyone have more insight in to what could have caused it?
Tangentially related: is there a seasonal ebb and flow to Uber usage that could soften or sharpen this delta? I know I'm much less likely to want to walk 3 miles in February than October, but that's just one person in one city.
I wonder how they'll be able to raise more cash with all this turmoil within the company. Even a 15B [1] cash hoard can't last much longer at this burn rate.
[1]https://mobile.nytimes.com/2016/06/21/business/dealbook/why-...
[1]https://mobile.nytimes.com/2016/06/21/business/dealbook/why-...
assuming nothing changes, don't they have 10 more quarters at this burn rate?
People are standing in line.
People who are willing to take a substantial share at a $70bn valuation? I'm not so sure about that. An IPO could be their only chance to raise significant amounts of capital. They'll need to use the time they have with their current cash balance (~2 years) to look good enough for an IPO.
They do not have a sustainable business. They're clearly pumping up revenue with subsidies (which is why they lose so much money). I do use Uber occasionally but when I do there's so many offers and deals that I never pay anything close to a break-even price. If you sell dollar bills for 85 cents it's easy to have lots of revenue.
They are surely gonna run out of top c-level execs faster than out of cash.
I like how the WSJ headline tries to imply casualty between loss and leaving of finance head. Why cannot these guys simply share the news instead of trying to imply the cause.
"as, conjunction: used to indicate that something happens during the time when something else is taking place: Frank watched him as he ambled through the crowd | as she grew older, she kept more to herself."
So they're just trying to mention both big news items in the same headline. The casualty[sic] is all in your head.
So they're just trying to mention both big news items in the same headline. The casualty[sic] is all in your head.
Maybe, but "as" also can be used in place of "because or since". Here is another headline from Reuters "Uber's finance head leaves; company's quarterly loss narrows". In my opinion, both the headlines provide a different slant to the same story.
P.S:- We both misspelled "causality", what a "casualty" :)
P.S:- We both misspelled "causality", what a "casualty" :)
That use of "as" would require a comma: "they were free, as the case had not been proved."
P.S.: I noticed the misspelling of causality, which is was the [sic] was trying to indicate.
P.S.: I noticed the misspelling of causality, which is was the [sic] was trying to indicate.
Has anybody published an estimate of what Uber's cash reserves might look like, or how long they can remain solvent at these insane burn levels? Losses of $3B/year seem like they would put almost anybody out of business.
From the article:
"The company, which has raised some $15 billion in equity and debt funding, said it still has $7.2 billion of cash left on hand, about the same as it had at the end of last year."
I know most people hate on uber, but it has impacted my life a lot. I think the model they've demonstrated is a legit model, and the ruthlessness with which they pursue it should not take anything away from the company's value. In fact, it should add. I want companies to show a giant middle finger to monopolistic city laws that harm citizens.
>I want companies to show a giant middle finger to monopolistic city laws that harm citizens.
Just wait until a private company holds a monopoly on an essential service, especially one with a history of unethical conduct like Uber. The city laws will seem like the good old days in comparison.
Just wait until a private company holds a monopoly on an essential service, especially one with a history of unethical conduct like Uber. The city laws will seem like the good old days in comparison.
You can see monopolistic behavior in some cities where the water franchise is in commercial hands (California American Water Co.). They seem to just raise rates with impunity.
e.g Comcast. Doesn't everybody just love having to pick between the diverse internet options of 1) all of Comcast's abusive shenanigans or 2) 2002-era dsl speeds?
I've heard of a few women whose life was also "impacted a lot". And I fail to see how casual sexism in the office is an adequate way to fight "monopolistic city laws".
Casual sexism in the office does not invalidate the business model. And is irrelevant when it comes to creating value for customers. What's your point?
Which monopolistic city laws were hurting your personally before Uber came to the rescue?
Not sure what "evil" laws you are talking about, but car safety, maintenance, insurance, fare counter requirements, mandatory drivers background check etc. are all beneficial to the user in my book.
> car safety, maintenance, insurance
All those laws exist for all cars, not just taxis.
> fare counter requirements
Classic example of over-regulation, leading to crappy service, low supply, and high prices.
> mandatory drivers background check
If some person is so suspect that you cannot trust them to drive you around in public while being tracked by GPS continuously, why is he not locked up? This is a bullshit made-up requirement and does not prevent anything.
All those laws exist for all cars, not just taxis.
> fare counter requirements
Classic example of over-regulation, leading to crappy service, low supply, and high prices.
> mandatory drivers background check
If some person is so suspect that you cannot trust them to drive you around in public while being tracked by GPS continuously, why is he not locked up? This is a bullshit made-up requirement and does not prevent anything.
"All those laws exist for all cars, not just taxis."
I don't know where you are from, but here taxi cars have stricter safety, ecology, age (and probably more) requirements than private cars. Which makes sense as they usually spend more time on roads and carry more people.
"Classic example of over-regulation, leading to crappy service, low supply, and high prices."
Um, no. Fare counter regulations and checks just make sure that it shows distance/fare correctly, and as far as I know, there's no monopoly in this market -- it's much like scales regulation in grocery stores.
I don't know where you are from, but here taxi cars have stricter safety, ecology, age (and probably more) requirements than private cars. Which makes sense as they usually spend more time on roads and carry more people.
"Classic example of over-regulation, leading to crappy service, low supply, and high prices."
Um, no. Fare counter regulations and checks just make sure that it shows distance/fare correctly, and as far as I know, there's no monopoly in this market -- it's much like scales regulation in grocery stores.
> If some person is so suspect that you cannot trust them to drive you around in public while being tracked by GPS continuously, why is he not locked up? This is a bullshit made-up requirement and does not prevent anything.
Are you fucking kidding me?
Prison sentences are usually not "for the rest of your natural life", and repeat offending is VERY COMMON.
Edit: GPS tracked by a fucking iPhone app. That the driver can turn off. What the fuck fantasy world do you live in that you can't imagine someone who is walking the streets possibly having bad intentions for other people.
Are you fucking kidding me?
Prison sentences are usually not "for the rest of your natural life", and repeat offending is VERY COMMON.
Edit: GPS tracked by a fucking iPhone app. That the driver can turn off. What the fuck fantasy world do you live in that you can't imagine someone who is walking the streets possibly having bad intentions for other people.
They still know exactly who was driving. In areas where impersonation by people without working papers has been a problem, they've started to make the drivers photograph themselves to prove their identity.
It's a safer system than the existing yellow cab setup - if you go missing, at least they have a pretty good idea about who did it.
It's a safer system than the existing yellow cab setup - if you go missing, at least they have a pretty good idea about who did it.
[deleted]
Reuters (non-paywall): https://www.reuters.com/article/us-uber-results-idUSKBN18R3E...
wsj Article Unlock bookmark: javascript:window.location.href='http(s)://m.facebook.com/l.php?u='+encodeURIComponent(window.location.href);
remove the '(' and ')' around s in https
remove the '(' and ')' around s in https
> Yes and no, they are in a space which is extremely price competitive. I literally am watching Uber take a dramatic hit in my area right now.
You are 'literally' watching Uber take a 'dramatic' hit. Okay.
Extremely price competitive market, yet you only mention Lyft.
> Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices.
Where did you get your numbers from? Just making stuff up as you go?
> Now, I only use Lyft - as do most of the people.
I only use Uber - as do most of the people. See how this generic mud-slinging like commentary works?
> Plus, most of the Uber drivers are shady here
Making blanket statements with words like 'shady' and 'here' is cheap.
You did not mention a single, verifiable fact. I can apply this kind of narrative to pretty much anything.
> I honestly still don't see them making it out of their situation.
Wrap it up with a cliche 'honesty...'. I do not understand comments like this; how much is Lyft paying you?
You are 'literally' watching Uber take a 'dramatic' hit. Okay.
Extremely price competitive market, yet you only mention Lyft.
> Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices.
Where did you get your numbers from? Just making stuff up as you go?
> Now, I only use Lyft - as do most of the people.
I only use Uber - as do most of the people. See how this generic mud-slinging like commentary works?
> Plus, most of the Uber drivers are shady here
Making blanket statements with words like 'shady' and 'here' is cheap.
You did not mention a single, verifiable fact. I can apply this kind of narrative to pretty much anything.
> I honestly still don't see them making it out of their situation.
Wrap it up with a cliche 'honesty...'. I do not understand comments like this; how much is Lyft paying you?
Commenting this uncivilly will get your account banned on HN, so please don't do that, and please in particular don't accuse other users of astroturfing just because you happen to hold a different view than they do. It's a popular internet trope but it isn't allowed here.
We detached this comment from https://news.ycombinator.com/item?id=14456973 and marked it off-topic.
We detached this comment from https://news.ycombinator.com/item?id=14456973 and marked it off-topic.
That said, harsh — maybe, but @korzun still has a point.
Original comment is (clearly) biased and doesn't align with the actual facts. I wonder why it got upvoted in the first place.
I don't think the accusation has been made because "one happens to hold a different view". It is harsh, but to be fair, OP failed to make a valid point.
Original comment is (clearly) biased and doesn't align with the actual facts. I wonder why it got upvoted in the first place.
I don't think the accusation has been made because "one happens to hold a different view". It is harsh, but to be fair, OP failed to make a valid point.
[deleted]
Could we stop posting links to paywalled content, for crying out loud? Or at least require that it be marked? Most news is available somewhere without a subscription.
1. Click "web" link below story here on HN
2. Click first result on Google
WSJ doesn't paywall if the referrer is Google.
WSJ doesn't paywall if the referrer is Google.
FWIW, I still hit the paywall after clicking on the Google search result.
Yes, I don't think that trick has worked for some time.
So for $70b I can buy a wallet that pays me -2.8b per year?
Not to be negative, but it sounds like it is time for a down round.
"Revenue up 18%
Loss down 1/3rd
22x+ the revenue of $snap
So much important work left to do, but congrats to the @Uber team."
https://twitter.com/jason/status/870059383765389312
So much important work left to do, but congrats to the @Uber team."
https://twitter.com/jason/status/870059383765389312
Why the silly dig at Snap? If you subtract Snap's employee stock program it lost $200m last quarter which is a lot less than Uber's $700m loss.
Uber might actually exist in 10 years, the dig at Snap seems extremely fair game in this frothy environment
At their respective current burn rates they both probably have 3-4 years left.
This is a tweet from Calacanis. I think he invested in Uber. I have no idea. Guess is that they are a recently public tech company that is an app w/ network Dynamics.
Uber is his one investment that people other than himself consider successful.
He wrote a book about what a genius he is for investing in a hundred companies and having one of them be Uber.
He's going to have to revise the book to talk about his coffee machine startup.
He wrote a book about what a genius he is for investing in a hundred companies and having one of them be Uber.
He's going to have to revise the book to talk about his coffee machine startup.
18% growth from last quarter (note: that's not Y/Y. this is ridiculously fast, given the huge base.)
708mm loss / 3.4 billion in revenue is only about 20% under even. And what most people miss, is that the 3.4 billion is the 30% cut Uber takes from a ride. Prices don't have to rise 20% to break even, prices have to rise 6% (assuming no efficiency improvements via pool etc, which is frankly ridiculous)
Yeah... Uber is doing fine.