Live data from Hacker News

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

bloomberg.com

401–410 of 424 posts

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

#401

As others point out this isn't necessarily bad, but it does mean that Uber is extremely vulnerable. If we learned anything in the last bubble it was that attempting to bootstrap through the power curve is exceptionally susceptible to capital constraints. Back in the dot com days a number of 'baby telephone companies' that were building out their networks and spending huge amounts of money on laying out the infrastruc…

The question is whether Uber is buying anything of durable value with their billions. Dot-com companies were buying warehouse space, laying fiber, creating lock-in. Uber might be running competitors out of business, but it's a business with low barriers to entry, and they're not really locking in customers or drivers. They may claim to be building a moat, but to me it looks more like they're buying overpriced water.

Its a fair question. If I were to speculate I would say they were buying habits. Specifically transportation habits. The closest analogy in my own experience is telephone directories. For all of my early life experience there where printed and bound telephone directories which you consulted when you needed to find the telephone number of someone you wished to talk to. There was a very profitable business in selling ads in the commercially oriented pages.

Google search changed that, over time it became easier to find a phone number online than it was in the books. Then with the smart phone it combined both the phone and the number database (search engine) into a single device and now very few people use phone books.

But that habit changed slowly, over a decade at least to go from early adopters to the majority of people out there using their phone (or the web) to look up numbers. So the habit for calling a cab is changing slowly. From regulated livery service to less regulated ride share service. During that transition Uber is apparently "spending" billions[1] to connect in peoples brains 'Uber' and 'rideshare' so that as ride sharing becomes the expected norm, people will think of it as Uber not "any number of ride share companies."

[1] It is an odd definition of spend, they are perhaps purposely under pricing their service (so subsidizing) in order to encourage use.

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

#402

As others point out this isn't necessarily bad, but it does mean that Uber is extremely vulnerable. If we learned anything in the last bubble it was that attempting to bootstrap through the power curve is exceptionally susceptible to capital constraints. Back in the dot com days a number of 'baby telephone companies' that were building out their networks and spending huge amounts of money on laying out the infrastruc…

> Its nice that if Uber does implode (not that they will) that only VC's will lose their money... Although don't forget the VC funds' lending partners are often pension funds and other traditional investment vehicles that you or I might use.

True but if the pension fund has more than a fractionally small percentage of their fund in startups then they don't deserve to be pension fund managers. When an Australian pension fund joined one of Blekko's funding rounds the amount their manager was spreading around the valley seemed like a lot of dollars but was less than .1% of the funds under management. So losing all of it had very little material impact on the fund, but a really big unicorn might push the return on the fund up by 20 or 30 basis points.

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

#403
post #226

Earlier quoted context omitted.

So others in this thread are calling it venture capital subsidized transportation. Why does the idea of venture capital charity seem so hilariously backwards?

Because VCs are using investor money and their investors are looking for a return. Someone along the line will be pissed off of their investments don't pay off. Burning up $800m to subsidise an app with the justification of "market share" decades before self driving vehicles become the norm is totally fine by me, as long as it's not my money being incinerated.

I use Uber. I like cheap rides. Probably not going to invest, but maybe we shouldn't speak too loudly about this.

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

#404

Earlier quoted context omitted.

Would it be fair to call it a Hail Mary if a technology that isn't ready for the mass market is a potential savior for a company losing $2 billion per year?

Depends on how fast uber and investors see self driving tech will be ready, no?

Does anyone see it within 2 years?

Even if the tech were ready in 100% of situations (it isn't), just working out the legal / regulatory stuff could take that long.

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

#405

Earlier quoted context omitted.

There's different degrees of endorsement. There's "agreeing with every jot and thistle of the system's actions" and there's "not trying to violently overthrow the system as bullshit." Most people live somewhere in between, closer to the former position than the latter. Most people want to change the system, but do not dispute the necessity of the system. As such, that means "the state is made of the people" is truer…

Of course there's degrees of endorsement, there always is. I'm just responding to the notion of yours that "in a republic, the state is the citizenry." Well, no, it's not, and it doesn't need to be - and indeed, there's no real way for it, in fact, to be so. Certainly, it can represent certain preferences of the citizenry, through various mechanisms and political tools, but the state isn't the citizenry, it's an inst…

It's fair to point out the distinction between the elected representatives (and the unelected appointed civil servants, bureaucrats, etc.) and the citizens who elected them. My original statement was to remind minarchists that ultimately, though, the state is still made up of the people it rules. The libertarian inclination to view the state as an alien, nefarious entity, doesn't lead to much room to improve it. Certainly your distinction is correct.

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

#406

Earlier quoted context omitted.

Of course there's degrees of endorsement, there always is. I'm just responding to the notion of yours that "in a republic, the state is the citizenry." Well, no, it's not, and it doesn't need to be - and indeed, there's no real way for it, in fact, to be so. Certainly, it can represent certain preferences of the citizenry, through various mechanisms and political tools, but the state isn't the citizenry, it's an inst…

It's fair to point out the distinction between the elected representatives (and the unelected appointed civil servants, bureaucrats, etc.) and the citizens who elected them. My original statement was to remind minarchists that ultimately, though, the state is still made up of the people it rules. The libertarian inclination to view the state as an alien, nefarious entity, doesn't lead to much room to improve it. Cert…

Okay, fair enough.

"ultimately, though, the state is still made up of the people it rules."

Well, that's one reason why it can be so dangerous. It's made of humans! :)

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

#407

Earlier quoted context omitted.

No, you don't understand. He's one of the guys who can make Twitter in a weekend.

It's not trivial to make an Uber clone, bit it doesn't take a 20 man developer team two years, either. The basic technology is not super complicated. You can do it with maybe five or six developers in a reasonable time frame. Most of the really interesting stuff that Uber does is scale, and you won't have to deal with that. Source: was principal server engineer for flywheel, an Uber competitor.

> flywheel, an Uber competitor

"competitor" is a little generous considering their site barely makes page 1 of Google.

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

#408

Earlier quoted context omitted.

It's not trivial to make an Uber clone, bit it doesn't take a 20 man developer team two years, either. The basic technology is not super complicated. You can do it with maybe five or six developers in a reasonable time frame. Most of the really interesting stuff that Uber does is scale, and you won't have to deal with that. Source: was principal server engineer for flywheel, an Uber competitor.

> flywheel, an Uber competitor "competitor" is a little generous considering their site barely makes page 1 of Google.

That's a dumb metric. Now, let me be the first to say that Flywheel wasn't very successful in competing with Uber (and there are tons of reasons for that that I could expand upon if anyone is super interested).

But we were plenty successful in creating a system in which people who wanted to get a ride were able to hail our drivers and our drivers could come and pick up the passengers and they could cancel and see ETAs and so forth. We served hundreds of thousands of rides while I was there, and presumably more in the two years since I left.

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

#409

Earlier quoted context omitted.

I didn't see any comment about Uber's main advantage tho, which is a shame... 1. being able to scale supply to meet demand. In the traditional taxi model, the number of taxis and drivers are mostly fixed. during times of low demand more fixed costs brings more waste (cars driving around not making money) and in times of high demand represent lost profit (cars not capturing market potential). taxi company's can try an…

The taxi company I used to drive for has embraced the "ride share" model to allow people to use their own cars. They now also lease plain cars that drivers can use with any of the various phone apps. They also updated their own phone app to provide all the functionality of the upstarts, but with local staff to deal with problems. Edit: http://www.taxiwars.org/electronic-taxi-dispatch-v1.0/

So, in many respects taxi companies are essentially becoming Uber in order to compete with Uber. Not shocking.

Cost is not the only factor. In fact, it's not even that important in terms of why Uber is trouncing taxis in terms of ridership. Uber has some very important UX advantages -- much lower wait times, integrated payment, fewer no-shows, ratings, less scummy drivers that people -- are willing to pay a premium for. Price is not the only variable in whether Uber can compete, your first link forgets that. UX is much more important IMO in terms of how shitty cabs are compared to Ubers.

Even only in regards to price, can uber compete on costs? your first link misses the bigger picture. Traditional taxi companies and Uber are efficient at different niches.

Traditional taxi companies (yellow cabs) are best at higher density areas due to being limited by the need for close-by depot, and 'base load' rides due to having a fixed supply of cars and not being able to dispatch new drivers as quickly.

Uber-models are good for all densities, and particularly areas with wide fluctuations in demand.

Taxis will need to adopt many Uber strategies in order to compete. They already have begun as you said. Taxi cabs sucked. Still do. And I would have no issue paying a premium to Uber to fuck it to the taxi cab companies. Especially when we are talking 10% difference in costs. UX dominates in terms of which ill choose to ride with.

Uber models are not going away, even if your first article thinks they will be slightly more expensive in certain scenarios and thus not able to compete at all, lol. What a leap in logic.

That said, will Uber be the long-term company that dominates? Maybe not. But their model will be.

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

#410
post #314

Earlier quoted context omitted.

conversely uber is much cheaper in uk and sydney, compared to taxis. Much more convenient, and no competitors.

There are competitors in the UK, Addison Lee and Hailo to just mention two. Plus some taxi companies make their own apps.

There are no competitors in australia (that I'm aware of).

And in the UK the competitors must be much smaller, everyone I knew there always used uber.

Post reply on HN