Why I don't believe in Uber's Success • Hacker News Board

Re: Why I don't believe in Uber's Success

#71

Post by Animats » Thu, Jan 19, 2017, 6:27 PM UTC

Here's a table of Uber's funding rounds.[1] What's keeping Uber going is Saudi Arabia's sovereign-wealth fund, which put in $3.5 billion last summer. They also took on $1.15 billion in debt last year. That's real debt at 5% interest, not some convertible deal.

Bloomberg says Uber is losing $800 million per quarter.[2] Unless they can find a bigger sucker than the Kingdom of Saudi Arabia, they run out of money in 2018.

[1] https://www.crunchbase.com/organization/uber/funding-rounds [2] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo...

Re: Why I don't believe in Uber's Success

#72

Post by Ben-G » Thu, Jan 19, 2017, 6:28 PM UTC

majewsky wrote: post #65

Keyframe wrote: post #39

Earlier quoted context omitted.

Question is, who are competitors with same scope as them? I don't know any. They are already in position to just switch over. Others would have to build their network first. It's a running start that depends on them playing their cards right.

Any larger car company is a competitor at the same scale. And you don't even need a competitor of the same scale: It's enough if every city has a local competitor.

Yep, that's exactly one of the points I was trying to make.

Re: Why I don't believe in Uber's Success

#73

Post by kyleschiller » Thu, Jan 19, 2017, 6:28 PM UTC

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

I don't think Uber necessarily needs a monopoly to win, if Lyft wants to compete on price it's free to due so, but if Uber has thin margins as it is, undercutting them is just a shortcut to death.

I might be unreasonably optimistic about self-driving cars, but it is important to note that the rollout will accelerate itself. The more SDCs on the road, the safer they'll be, and the more data they'll gather. On the legislation side, my sense is that once one company bears the brunt of the legal pushback, the rest will have a relatively easy time.

Not that BI has a crystal ball, but their prediction seems at least somewhat reasonable. [1]

[1] http://www.businessinsider.com/report-10-million-self-drivin...

Re: Why I don't believe in Uber's Success

#74

Post by Keyframe » Thu, Jan 19, 2017, 6:28 PM UTC

beezischillin wrote: post #54

Keyframe wrote: post #22

I don't understand his point. Maybe I'm dense (today, ha). If Uber has a (simplified) split cost per drive consisting of vehicle (+maintenance) and/or fuel & driver. If subsidised part is generally covering the driver part. When you replace driver with autonomous vehicle and you remove subsidies, you're left with a sustainable (presumably) model on a certain margin that is already rolling. Rolling in a sense that it…

The Uber we know right now will probably transition into the self-driving car-based company for freight, passenger transport and ride sharing. It'll be a bit unsettling to see what'll happen to the drivers they're using right now. I personally think that Uber is not an ethical company (I do live in Europe). They are exploiting tax and legal loopholes to profit off of both drivers and countries, simply because regulat…

When Uber is put up to the same scrutiny as taxi companies are (to ensure their drivers are up to the same standard), they refuse to compete and instead of paying the same tax everyone else does and abiding by the same regulations everyone else does, they just leave the market.

Don't misunderstand me, taxi service in my country is horrible, they're useless and rude and service is generally bad, but just because that's the situation, we should try and improve that, instead of allowing companies like Uber to exploit the situation.

I have to agree with this. Uber is its own biggest enemy. Market regulation comes along with it. This is the real danger for them, for now. At least here in Europe.

Re: Why I don't believe in Uber's Success

#75

Post by hmate9 » Thu, Jan 19, 2017, 6:29 PM UTC

acchow wrote: post #66

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

> 250% surge pricing or $90. Lemme check Lyft. Sweet, Lyft is about $50. Our Lyft will be here in 3 minutes." There was zero friction switching from Uber to Lyft. That's not zero friction. Zero friction would be if you routed the directions under "Public Transit" in Google Maps and scrolled to the bottom where you can see both Lyft and Uber pricing (and clickable links) next to each other.

Technically you are correct, but you are just nitpicking. We understood exactly what he meant.

Re: Why I don't believe in Uber's Success

#76

Post by Ben-G » Thu, Jan 19, 2017, 6:30 PM UTC

samfisher83 wrote: post #50

falloutx wrote: post #25

In my opinion, giving large scale subsidies to customers seems like a business anti-pattern, and is surely gonna kill a lot of startups in near future. I have been sold to the Idea that Investors are killing any Internet "Business" by advising Founders against simple & straight-forward business plans. They constantly ask founders not to monetize earlier and wait until founders have no choice but to trash out the comp…

Bing might be 90% as good as google, but when people are trying to search for something they are just going to use google. I really started to realize how useful Uber was when i was traveling internationally I just pulled out my phone and a car came. I didn't have to worry about what the rate was going to be. It might have even been above what a taxi might charge, but at least I knew what the cost was going to be. It…

I touched on this point in the post. If there's a significantly cheaper local competitor, most people will be happy to use that service when they're home. Then they'll use Uber (or some other globally operating competitor) while they travel.

Re: Why I don't believe in Uber's Success

#77

Post by guard-of-terra » Thu, Jan 19, 2017, 6:30 PM UTC

dmitrygr wrote: post #4

Possibility: seeing all this, Uber looks hard at what they do have and simply becomes contract cab dispatcher for all cabs everywhere, smartly choosing which cab to call to the scene of the caller using their algorithms. And lets existing can companies so the actual driving. Why? Currently some cab companies have shitty apps, others have none. Your chances of getting a cab in a suburb of an unfamiliar city is zero. U…

That's what Yandex.Taxi (and also Gett) are doing in Russia, contracting cab dispatchers. This way, they hail you a real cab (that, for example, can drive in bus lanes) with your app.

I think they're also trying direct Uber-like scheme but I'm not sure about that.

Re: Why I don't believe in Uber's Success

#78

Post by hmate9 » Thu, Jan 19, 2017, 6:30 PM UTC

Animats wrote: post #71

Here's a table of Uber's funding rounds.[1] What's keeping Uber going is Saudi Arabia's sovereign-wealth fund, which put in $3.5 billion last summer. They also took on $1.15 billion in debt last year. That's real debt at 5% interest, not some convertible deal. Bloomberg says Uber is losing $800 million per quarter.[2] Unless they can find a bigger sucker than the Kingdom of Saudi Arabia, they run out of money in 2018…

$800 million / quarter = $103 / second. Wow.

Re: Why I don't believe in Uber's Success

#79

Post by SatvikBeri » Thu, Jan 19, 2017, 6:33 PM UTC

avn2109 wrote: post #68

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

TFA and a lot of commenters here don't seem to understand that Uber doesn't want to compete with taxi services, which are a niche business to be disrupted en route to the real prize. It wants to compete with your car - imagine 12 lanes of L.A. traffic composed mostly of Ubers. That's their dream. They even admit this in public. [0] The day they can get cost per mile one penny below what you'd spend owning a Toyota Ca…

I agree that Uber is trying to replace private car ownership, and I expect ride-sharing services like Uber/Lyft to succeed at this. But given those assumptions, is there any reason to expect them to be massively profitable? The current market seems to involve Uber & Lyft (& other competitors in different locations) competing on price, do you expect that to stop?

Re: Why I don't believe in Uber's Success

#80

Post by vannevar » Thu, Jan 19, 2017, 6:36 PM UTC

avn2109 wrote: post #68

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

TFA and a lot of commenters here don't seem to understand that Uber doesn't want to compete with taxi services, which are a niche business to be disrupted en route to the real prize. It wants to compete with your car - imagine 12 lanes of L.A. traffic composed mostly of Ubers. That's their dream. They even admit this in public. [0] The day they can get cost per mile one penny below what you'd spend owning a Toyota Ca…

This is a good point, but it doesn't change the prognosis. Uber will run out of runway long before that vision can be realized. And even if by some miracle it doesn't, it will find itself in a low-margin commodity business. Unless it can muscle its way into a monopoly, it can't win. Which explains the company's aggressiveness and anti-competitive nature.