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Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

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Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#171

Post by quickben »

Retric wrote: post #65
quickben wrote: post #35

Earlier quoted context omitted.

Toronto. I haven't taken a taxi forever, but I believe they start at $3.25 (city council orders) as opposed to Uber at $2.5.

The math does not seem to work out for them. (1.7b / 0.8b + 1.7b) = 68% of their costs. 3.25 * 0.68 = 2.21$, but Uber charges more than that and would like some profit. aka Uber has higher costs than cab companies making them a long term dead end. Sure, they are probably subsidizing other markets more, but even then that are gong to run out of money long before the self driving car thing takes off.

You are assuming perfectly rational market. It isn't.

Many people here would dodge Uber if they expect surge pricing (And something along these lines was said today on one of the popular for young people radios stations, here).

Also, there are plenty of taxi just waiting around everywhere downtown.

Many (older?) people, would never get Uber to go to the airport, which is a very good profit opportunity.

So, I don't see Uber having a 100% monopoly in any future, as various people have various needs and opinions and it's not a race to the bottom on price in this segment.

They will both coexist, but for people taking the cab in the first place, $0.75 is not even on the list of thoughts in downtown Toronto. You get out of a Johny Cash event, $200 a person ticket, it's snowy, and you'll wait few minutes for uber when the Taxis are parked up front?

As you move outwards from the core, more people drive Uber, and one was even my ex coworker, so he told lots of stories.

So, to conclude, you can't assume race to the bottom on price alone. Or IPhones, rolexes, Alienware PCs, etc would have been long gone.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#172

Post by tehlike »

moxious wrote: post #111
weremine wrote: post #24

Has there been a startup in recent history that was losing this amount of money per year (planned or not) that ended up going green and successful?

That's a good question. As far as I know these losses are pretty epic, so it's somewhat uncharted territory. They're also not directly comparable to previous unicorns because of their cost structure. They also can't exactly amp up the website ads to cash in on advertising, like previous big losers who turned things around.

autonomous driving could potentially cut one of the main expenses (like the driver's fee), which could cut down prices even more, and probably get them enough of a margin to make them profitable.

that's probably why it makes sense to dominate the market while they still can.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#173

Post by mikeyouse »

user837387 wrote: post #141
mikeyouse wrote: post #103

Earlier quoted context omitted.

Side note, profitability is generally described as "into the black" not the green. Amazon is probably the best example, their GAAP losses totalled several billion dollars for a decade or so before they flipped the switch.

That completely got me. I thought he was talking about green technology which did not make much sense to me. Didn't realize he was talking about profitability.

Yeah it's usually clear what they mean with "into the green" but a thread about electric vehicles definitely makes that confusing.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#174

Post by wavefunction »

mgraczyk wrote: post #53
Analemma_ wrote: post #43

Earlier quoted context omitted.

It might come from the fact that they ragequit Austin rather than do background checks.

Uber was already doing background checks in Austin. They quit in protest of a requirement that drivers be fingerprinted and forced to drive around with Uber decals on their cars.

Uber (combined with Lyft) spent $10,000,000 to lie to the people of Austin about the effects of Prop 1. At a conservative cost of $50 per finger-printing, that's enough to fingerprint 200,000 drivers.

I know because I received over 30 pieces of direct mail in the two weeks leading up to the vote from whatever clown-show operation they hired. Twelve of the direct mail pieces were the same mailer.

Given the waste of paper and their previous history (especially the behavior of the executives), I don't care if Uber ever "comes back."

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#175

Post by paulddraper »

animex wrote: post #167

Uber will be a dead Unicorn in the medium future. They've got too many legal pressures, competitors with native advantages (i.e. the automakers), and their expansion plans have them overextended. Here in Edmonton, AB, Canada, regulatory changes have pushed the Uber prices to almost 2x during non-surge times over regular taxis. Taxi's have stepped up. Local competitors have sprouted. Carshares are abounding. It's all…

They still have the momentum.

This isn't a start up trying to figure out how to make money (Twitter) or a company that can't/won't change (Blackberry).

This is a company making money that is pursuing a blitzkrieg on the industry. They can sit back any day and rake in billions. I agree there isn't a high entry barrier, but I don't think they've lost the first-to-market advantage.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#176

Post by jartelt »

alistproducer2 wrote: post #166

Here's what I'm not understanding about Uber. There' nothing they provide that couldn't be cloned. It's clear there's no way to grow into profitability so once the VC subsidies go away Uber will have to significantly raise prices to survive, putting them in the same price range as traditional car services. At that point, what's to stop Yellow Cab from creating their own Uber clone and eating Uber's lunch?

Well, Yellow Cab could hardly even get credit payments to work in their cabs, so they are not exactly a technology company. It's not going to be easy for a cab company to clone what Uber (or lyft) have built during the last 7 years. Plus Uber has a network of drivers/users that has significant value.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#177

Post by thechut »

cylinder wrote: post #72
nharada wrote: post #4

Presumably this is intentional -- Uber could raise prices and make more money, but right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future. At least anecdotally, here in SF Lyft is almost always more expensive than Uber.

I would just take Juno. The drivers here in NYC are only doing Uber to get enough ratings to qualify for Juno. Uber went way too far squeezing drivers, it's a mess. I've seen their Uber pool earnings ... It should be illegal.

What exactly is the Juno model? Just a clone of early Uber?

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#178

Post by tehlike »

rubicon33 wrote: post #100
stuckagain wrote: post #82

Earlier quoted context omitted.

I don't know how people get this impression, unless it is by only reading the comments on this site and never reading any primary sources. Uber's "self-driving" tech is currently unable to do things that other companies were doing years ago. Google's car took a blind man to Taco Bell in 2012. Uber's car has two engineers in the front seat and still blows stop lights and can't make a right turn.

Yea, Google drove a blind man to Taco Bell in 2012 and still hasn't released a self driving car 4 years later. Meanwhile, Uber's been in the self driving car business half that time? They already looks more likely to actually have these things on the road, and, they have the incentive, and cash pool to do it. Another reason people "get this impression" is that Google has a history of interesting projects that never m…

as a google employee, this often makes me sad too, but when it comes to human life, it's a bit more nuanced than that.

engineers don't have the luxury to do many things they could otherwise do on their server side software. You break a server, you fire-drill it, get the resources, roll back the release or so on. You lose money, sometimes tens of millions of dollars, but not human life. You write your post mortem, and put the protections in place, you learn from it.

Noone can afford to lose a life.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#179

Post by potatolicious »

jpalomaki wrote: post #127
nharada wrote: post #4

Presumably this is intentional -- Uber could raise prices and make more money, but right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future. At least anecdotally, here in SF Lyft is almost always more expensive than Uber.

Would the monopoly plan really work? Is there something that would prevent competition from reappearing when prices are raised? At least from customer perspective it would be pretty easy to use couple of apps and shop between different providers. For drivers this might be of course more difficult, since Uber can use contracts and other mechanisms to prevent them from working with other providers.

> "Would the monopoly plan really work?"

IMO no. Others mention the network effect, and while it will certainly be a factor, I don't think it will be anywhere near strong enough to make the monopoly plan work.

The network effect for Uber is really local - at the city level. An "Uber, but only in Austin" service can easily compete with a national-level Uber, since the vast majority of cab rides are taken within a user's home city.

You need a critical mass of cars/drivers to present real competition in this space, but you don't need to do it at national, or even state-level scale. A small upstart that can achieve critical mass in a single city can present real threat to Uber in that city.

The network effect of cabs between cities is so little that while a lot of consolidation of cab companies have occurred in each city, until Uber there was never a major cross-city network. I'm not convinced that a unified worldwide fleet has a significant competitive advantage. It'd be useful for tourists, maybe.

And this is already happening - Juno here in NYC is gaining real traction by charging drivers less, getting drivers to evangelize to each other. Uber won't be toppled by Lyft or any other megalithic ride hailing company, it will more likely be toppled by hundreds of smaller, geographically narrow companies.

Re: Uber's Loss Exceeds $800M in Q3 on $1.7B in Net Revenue

#180

Post by chrischen »

orthoganol wrote: post #126
nharada wrote: post #4

Presumably this is intentional -- Uber could raise prices and make more money, but right now they're choosing to keep prices very low in order to undercut Lyft and the cab companies with the assumption that having a monopoly will return more profits in the future. At least anecdotally, here in SF Lyft is almost always more expensive than Uber.

I think almost certainly their profitability is dependent on a future of driverless cars, and I'm sure that's what they are pitching investors. Fearfully, since their survival means going driverless and they are now losing $800 million a quarter, they will race to get driverless cars on the road, it will be rushed, and it could be reckless. I'm thinking the two driverless cars filmed blowing red lights in SF recently…

If taxis could survive there's no reason uber couldn't.
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