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Uber Turns to Saudi Arabia for $3.5B Cash Infusion

nytimes.com

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Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#261

Post by DavidWanjiru »

morgante wrote: post #173
downandout wrote: post #98

Earlier quoted context omitted.

I believe that your assumption of insane driver subsidies is indeed the reason they are sucking down so much money. That is a problem, because the moment that people have to pay the actual costs of an Uber ride, they may go back to taxis or driving their own cars. The only strategy I can see with the absurd amounts they are raising is that they are trying to get enough money to sustain the subsidies until they kill a…

> That is a problem, because the moment that people have to pay the actual costs of an Uber ride, they may go back to taxis or driving their own cars. There doesn't seem to be evidence of that. Uber is apparently profitable in its mature markets (mainly the US).[0] The money is mostly used to prop up new markets, where you have to give lots of incentives to get both sides of the market in place fast (keeping supply a…

The question them becomes, did Uber need to use similar subsidy tactics to become profitable in its mature markets? If yes, then this is just rinse and repeat, no problem. If no, then I'd argue there'll be trouble ahead.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#262

Post by milcron »

DavidWanjiru wrote: post #260
discardorama wrote: post #196

Earlier quoted context omitted.

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidize some part of the equation strikes me as underhanded, as opposed to purely being innovatively disruptive.

Eh, what about insurance companies? They "subsidize" those who have emergencies, using money from people who aren't having emergencies. The innovation there comes from evening out the cost of emergencies over time -- always pay a (relatively) flat fee.

If Uber's incentives for drivers result in a better experience for riders (shorter rides), isn't that a good thing?

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#263

Post by roel_v »

ng12 wrote: post #96
cylinder wrote: post #87

Earlier quoted context omitted.

Exactly. They are burning cash to gain market share and will lose that share as soon as they stop. Not many barriers to these apps. Uber is going to implode.

Here's the thing -- ride sharing is the least interesting thing about Uber. Uber's expertise is on-demand logistics which is a totally new field at this scale. Ride sharing just happened to be an easy first step. Once they're able to move things around in real-time at a global scale the opportunities are massive.

"on-demand logistics which is a totally new field at this scale"

I've heard this argument before, but how can this be taken seriously? Take DHL, or UPS - they do orders of magnitude more (in transactions) than Uber does, and I know it's not exactly the same, but I'd even argue that any parcel service is a lot more complicated than Uber. Hell, even the tiny postal service of my country ships the same amount of packages each day as Uber has rides.

The tech side of Uber is (dare I say it!) trivial (well the 'ride sharing' part, not the AV research side). It's the regulatory and plain business model angles that must be costing them.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#264

Post by adrianN »

mandeepj wrote: post #257
discardorama wrote: post #196

Earlier quoted context omitted.

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

> it removes the incentive for the driver to dick around and do a TSP around the city to drive up the fare With GPS, drivers can't do this.

Time for a "taxi driver" firmware for Garmin devices? They're pretty open iirc.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#265

Post by gaius »

loeg wrote: post #225
macspoofing wrote: post #158

Earlier quoted context omitted.

>You can split an Uber 4 ways but you can't split a bus fare. Like a taxi? Uber will never come close to moving the sheer numbers that public transit does. You can't do it, not enough road to fit all those cars. Especially in downtown cores. So Uber competes with public transit as much as taxis compete with public transit.

Yes, like a taxi. The primary benefits Uber has over traditional Taxis are 1. price; 2. they have an app, and it works well; 3. drivers arrive in vaguely predictable times that are less than 45 minutes; and 4. it doesn't discriminate as badly as cabbies. > Uber will never come close to moving the sheer numbers that public transit does. You can't do it, not enough road to fit all those cars. Especially in downtown cor…

2-4 apply to every taxi firm these days too

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#266

Post by lazaroclapp »

tracker1 wrote: post #221
Spooky23 wrote: post #171

Earlier quoted context omitted.

Über has enchanted the tech people. It's this golden goose that every conversation turns to. Listen to the Ben Thompson podcast -- if he was reacting to an article about ham sandwiches, he would tie it to Uber. There's no reality here. No magic self driving electric taxis, no robot delivering your takeout. 18-24 months this thing will be like Groupon (remember they were magically saving writers by hiring thousands of…

For those curious... 100k / 20 / 365 = $13/day, at $3/gallon (est) = 4.56 gallons * 20mpg (low gas milage) = 91 miles/day, or closer to 30mpg would be around 135miles/day, which I guess is possible. I was just thinking it seemed like a lot. Now, a fair amount of that is varying levels of taxes... but it's still significant amount. I'm currently doing about 40 miles/day commute for work, and know people who are drivin…

You are not counting consumption of plastics, electricity generated by oil, combustible used by construction vehicles building the roads and buildings he uses, etc. But even by that sort of accounting, $100K sounds like it was intended to be hyperbolic ;)

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#267

Post by pknerd »

Mendenhall wrote: post #190
morgante wrote: post #178

Earlier quoted context omitted.

I think you're overthinking the likelihood of that becoming a controversy. Sovereign wealth funds routinely invest in companies which run contrary to government official policies. Their foremost duty is as investment managers, not politicians.

I dont think it will turn into a controversy at all, but a smart competitor versed in propaganda could easily hit that attack vector. "Ride with Uber and help raise money to suppress women!" "How do you feel as a Uber driver knowing board members dont think women should be able to drive and your actions help support that?"

SO if a woman does not drive she is suppressed? So far no woman was elected as a President either in US. Guess women are oppressed there?

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#268

Post by Nullabillity »

loeg wrote: post #151
macspoofing wrote: post #132

Earlier quoted context omitted.

I don't know about London, but in my area an UberX ride is 4-5x the price of a bus ticket (~10km). This only gets worse as the distance grows. Public transit is not Uber's competition and it'll never replace mass transit.

You can split an Uber 4 ways but you can't split a bus fare. So if you go out with a few friends it becomes much more reasonable for short trips. If Uber gets more expensive, some people will go back to public transit.

Nope, but most people who take public transit regularly already have a monthly fixed-price subscription. So that trip is pretty much free already, unless people start commuting by taxi...

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#269

Post by mrweasel »

kinkdr wrote: post #15
Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

In my simplistic mind, their business model is to spend a lot of money today in order to create a monopoly tomorrow.

To me it seems like they're realising that there aren't actually that much money to be made by taxiing people around. Now they need another infusion of cash to transition or expand the business, hoping to find some other source of profit.
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