Uber is facing the biggest crisis in its history • Hacker News Board

Re: Uber is facing the biggest crisis in its history

#101

Post by endorphone » Mon, Mar 27, 2017, 9:23 PM UTC

valuearb wrote: post #99

endorphone wrote: post #8

Earlier quoted context omitted.

The media giveth and the media taketh away. Uber is a glorified cab dispatch organization, desperately fishing around to try to convert some of the insane valuation they enjoy into something more valuable. For years the media has made Uber their darling -- the oft restated misnomer about a "sharing economy" -- giving it what would likely calculate to billions in free press. Retelling the tales about the grand new wor…

insane valuation? probably. Glorified cab dispatcher? Hardly. The potential of Uber is a worldwide brand with super efficient dispatch. Do you really think it costs them more than a few cents to dispatch rides? There isn't any cab dispatcher in the world with remotely their economies of scale.

The economy of scale is a ruse that doesn't actually exist in the business, and this is very well tread ground so I'm not going to repeat it. For Uber's amazing efficiency, despite not owning the cars, paying for the fuel or normal labor costs, or even the insurance in most cases, and then taking 20% of the fare....they're losing insane amounts of money. The calculation doesn't seem to work out.

But in the end you've literally said that Uber isn't a cab dispatcher, but they're a super efficient cab dispatcher. Aside from that not being remotely true (their economics are absolutely abysmal), being a worldwide brand is close to meaningless. The overwhelming majority of rides happen locally.

Uber's primary beachhead has been a complete disregard for regulations. This may be justified in many cases, but it led to the corporate culture that is now eating it from the inside.

Re: Uber is facing the biggest crisis in its history

#102

Post by nebabyte » Mon, Mar 27, 2017, 9:25 PM UTC

dkarapetyan wrote: post #78

valuearb wrote: post #51

Earlier quoted context omitted.

Your assuming their ridesharing business is not profitable in mature markets. There is evidence it is. No outside analysis has yet been able to break down how much of their losses are investment in new businesses and markets.

Yes. I'm assuming the ridesharing component is indeed not profitable.

Obviously it's big enough for both taxis and (whatever splitting rides long-distance is called, if not also ridesharing) to have continued to exist, but in general I agree with you. Uber's ubiquitousness in this day and age has less to do with a high unmet demand for people using cars to get places, and more for demand to get to places cheaply.

There's definitely a niche, but it's nowhere near the size that Uber's operating at now; so if they're reliant on that volume or higher for the margin they need they're in for some bad news. Once the price goes up the market will be ripe for new public transportation efforts and less-VC-saddled competitors to fill the void.

I dunno, maybe they'll have more luck in foreign markets. (Though last I read, that wasn't the case either...)

Re: Uber is facing the biggest crisis in its history

#103

Post by valuearb » Mon, Mar 27, 2017, 9:28 PM UTC

frgtpsswrdlame wrote: post #74

thecopy wrote: post #58

Earlier quoted context omitted.

What do you base that on?

Here's a link from a comment a bit further down the thread: https://motherboard.vice.com/en_us/article/uber-true-cost-uh... If you really want to go down the rabbit hole I'd recommend reading this series on nakedcapitalism. They're at nine parts now: http://www.nakedcapitalism.com/?s=can+uber+ever+deliver

The naked capitalism series is written by a cab dispatch consultant, and reads almost like a paid hatchet job. Makes huge assumptions on data not in hand, and spins iffy conclusions with evident bias. At one point he claims Ubers costs can never be as low as cab dispatch because Uber is spending money expanding! That makes zero sense.

It's pretty clear Uber is in heavy investment mode, in market expansion as well as new businesses (uber-eats, self driving cars, etc), no one can know what their real costs per ride are unless they can break out that detail.

But it's also clear in their core business their cost to dispatch a ride should only be pennies.

Re: Uber is facing the biggest crisis in its history

#104

Post by nebabyte » Mon, Mar 27, 2017, 9:30 PM UTC

hackuser wrote: post #96

I make a habit of talking to taxi drivers about Uber. Consistently they say they drive taxis because there is no money in driving for Uber (which of course that tells us less than it seems, because they are self-selected to be people who prefer driving taxis). One told me something new: I asked, as I often do, if they don't make money then why are there so many Uber drivers? This man said that some Uber drivers are t…

> AFAIK; they have no long-term capital investment or debt trap

Medallions?

Re: Uber is facing the biggest crisis in its history

#105

Post by smallgovt » Mon, Mar 27, 2017, 9:30 PM UTC

Arizhel wrote: post #93

twblalock wrote: post #88

Earlier quoted context omitted.

In situations like this, in which an executive is hired to reform a company and is set against entrenched management and culture, golden parachutes seem entirely justified to me.

I'm not so sure. Wouldn't it be better for society overall if these companies were condemned to die by their own hand, instead of being able to be saved by an outsider? If they're saved, then all the people who participated in creating this toxic culture are rewarded. If the company goes belly-up, then any valuable assets can be bought by other firms for pennies on the dollar, and those and other competing, and hopef…

I'm not following. Are you proposing that companies should not be allowed to hire someone from the outside to fix severe culture issues? The problem with such a policy is the mechanism through which we'd determine which companies are condemned.

From your comment, I gather that if it were up to you, you'd sentence Uber to death instead of giving them a shot at redemption. You wouldn't be alone in this perspective, but I think you're overlooking the thousands of GOOD people that would be adversely affected and punished by such a decision. All to punish a couple people you believe to be evil.

Re: Uber is facing the biggest crisis in its history

#106

Post by valuearb » Mon, Mar 27, 2017, 9:31 PM UTC

st3v3r wrote: post #80

valuearb wrote: post #54

Earlier quoted context omitted.

I have Uber in my phone, not Lyft.

And I have Lyft, not Uber. Your point?

That you are a an exception. I've never had a friend suggest Lyft, i'm not sure they even know what it is. They suggest uber all the time, and it's clear Uber has massively more market share.

Re: Uber is facing the biggest crisis in its history

#107

Post by 67726e » Mon, Mar 27, 2017, 9:32 PM UTC

Apocryphon wrote: post #21

67726e wrote: post #3

Earlier quoted context omitted.

I'm not at all a fan of Uber, but at this point it seems like a coordinated smear campaign.

It's not a smear campaign; it's a feeding frenzy. When public perception shifts one way or another, the stories follow to cover it in that angle (though you'd expect at some point there'd be some contrarian hot takes that take an apologist stance towards Uber, maybe something like "Don't blame Uber. Blame the tech industry/gig economy/etc."). There's something rotten at the company, so journalists will naturally shif…

Hadn't even considered that. Suppose the results are the same either way.

Re: Uber is facing the biggest crisis in its history

#108

Post by [deleted] » Mon, Mar 27, 2017, 9:32 PM UTC

Apocryphon wrote: post #21

67726e wrote: post #3

Earlier quoted context omitted.

I'm not at all a fan of Uber, but at this point it seems like a coordinated smear campaign.

It's not a smear campaign; it's a feeding frenzy. When public perception shifts one way or another, the stories follow to cover it in that angle (though you'd expect at some point there'd be some contrarian hot takes that take an apologist stance towards Uber, maybe something like "Don't blame Uber. Blame the tech industry/gig economy/etc."). There's something rotten at the company, so journalists will naturally shif…

[deleted]

Re: Uber is facing the biggest crisis in its history

#109

Post by [deleted] » Mon, Mar 27, 2017, 9:32 PM UTC

Apocryphon wrote: post #21

67726e wrote: post #3

Earlier quoted context omitted.

I'm not at all a fan of Uber, but at this point it seems like a coordinated smear campaign.

It's not a smear campaign; it's a feeding frenzy. When public perception shifts one way or another, the stories follow to cover it in that angle (though you'd expect at some point there'd be some contrarian hot takes that take an apologist stance towards Uber, maybe something like "Don't blame Uber. Blame the tech industry/gig economy/etc."). There's something rotten at the company, so journalists will naturally shif…

[deleted]

Re: Uber is facing the biggest crisis in its history

#110

Post by ProAm » Mon, Mar 27, 2017, 9:36 PM UTC

sqeaky wrote: post #95

ProAm wrote: post #44

Earlier quoted context omitted.

They are in deeper trouble than that. If they cannot resolve the Waymo lawsuit in an economical fashion they will just wither and die, Lyft or not.

They are valued at 70 Billion, how does that just wither and die? One lawsuit can be dragged out a long time and their lawyers will do their best to reduce and fees no matter how wrong Uber actually is (or isn't I don't know). Consider the size of Uber now and compare that to the size of Microsoft 15 years in the DOJ antitrust trial. They are about the same size, that gives them lots of options.

Valued at means nothing really, it speaks to investment and while its not worth nothing they are currently burning about 3/4 billion per quarter [1], and have no profitable quarters anywhere on the horizon.

They have always been betting their future on autonomous cars and the Waymo lawsuit stands a good chance to set them back a decade and they do not have the current capital to withstand that.

MS was already public when they had the antitrust lawsuit and was making money. To try and compare MS and Uber is not close to the same thing.

[1] https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo...