Uber Posts $708M Loss as Finance Head Leaves • Hacker News Board

Re: Uber Posts $708M Loss as Finance Head Leaves

#221

Post by lhorie » Thu, Jun 01, 2017, 3:39 PM UTC

beavisthegenius wrote: post #182

lhorie wrote: post #114

Earlier quoted context omitted.

Just thought I'd point out that, in addition to name calling not being very nice in general, it's particularly in poor taste right now given that the person in question is grieving a family death that happened just this weekend[1] [1] http://money.cnn.com/2017/05/27/technology/uber-travis-kalan...

The guy may be grieving but he's still an asshole. He calls it boober because of all the sex he has being the founder of it.

Assuming you actually know the guy, you should probably go say that to his face rather than anonymously talking smack on the net...

Re: Uber Posts $708M Loss as Finance Head Leaves

#222

Post by resf » Thu, Jun 01, 2017, 3:47 PM UTC

rtpg wrote: post #198

resf wrote: post #160

Earlier quoted context omitted.

They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market. In other words, even Lyft's best case scenario would be a huge step down for Uber.

In a world where Lyft wins the US market, they then have a battle chest for future expansion. Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.

Lyft can't expand outside the US because there are already local competitors. If I'm happy using Grab, why would I bother installing Lyft?

Re: Uber Posts $708M Loss as Finance Head Leaves

#223

Post by aetherson » Thu, Jun 01, 2017, 4:20 PM UTC

mattmanser wrote: post #213

aetherson wrote: post #209

Earlier quoted context omitted.

The few numbers that Uber posted look like good news for them, but let's not overstate things. The reason that people post numbers YoY instead of QoQ most of the time is not to artificially inflate numbers. It's because lots of companies have yearly seasonality. If you looked at Apple's numbers for Q4 (real Q4, Oct-Dec, not Apple's fiscal Q4) quarter over quarter, they'd always look like they were on a massive, incre…

Looking at this interesting pdf: http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_... It looks like Taxis are seasonal and so they'll see a drop in revenue over summer (page 4). Though elsewhere they note that airport fares are up over summer. It also looks like there's a large, several day, drop over the Xmas period every year, which could potentially make Q1 better than Q4. Although I know in the UK at l…

When I worked for Flywheel (which was an Uber competitor that uses taxis, and whose customers were concentrated heavily in San Francisco), there were a number of different, crazy seasonal effects.

Rainy weather definitely spiked demand in a big way (I sometimes wonder if Flywheel would have managed to make it over a few more hurdles if California had not been in an intense multi-year drought when I worked there). There was virtually no demand from Christmas to New Years, and then New Years Eve saw demand that was 10x what it was on other days. There are other extremely high-demand holidays such as Halloween and St Patrick's Day. Basically any drinking holiday, for obvious reasons, except 4th of July.

Uber is in many more markets, of course, though I suspect that a smaller number than you'd think are by far the heavyweights in their revenue and an even smaller number are the heavyweights in terms of improving their bottom line. They have surge pricing, which we didn't, and which is presumably better at turning demand into revenue than we were. Other markets may have different relationships with their weather than San Francisco did.

Re: Uber Posts $708M Loss as Finance Head Leaves

#224

Post by hn_throwaway_99 » Thu, Jun 01, 2017, 4:51 PM UTC

odonnellryan wrote: post #135

hn_throwaway_99 wrote: post #128

Earlier quoted context omitted.

Perhaps I'm being dense, but I don't understand your math. If $3.4 billion represents the 30% Uber cut, then that means total gross bookings is about $11.3 billion. If they raise prices six percent, and have no loss of volume, then total gross bookings comes to about $12 billion. However, wouldn't you still assume Uber only would get 30% of that extra $700 million in gross bookings? I.e. revenue would only be .3 x $1…

No. What would prevent Uber from taking all 6% raising prices and giving drivers nothing extra?

I think that's a pretty bad assumption. If that's the case, what's to stop Uber from just taking a bigger chunk now and giving drivers less without raising prices? "Market forces" is the obvious answer, and those forces aren't going away.

Re: Uber Posts $708M Loss as Finance Head Leaves

#225

Post by marcosdumay » Thu, Jun 01, 2017, 6:08 PM UTC

rtx wrote: post #95

zda wrote: post #91

Earlier quoted context omitted.

Why not?

We had a local competitior backed by soft bank. They are in bad shape. All because of execution. I don't see any other company able to match that ruthlessness.

So, Uber will be able to take the entire market as long as they don't make it lucrative?

That seems to be Uber's plan everywhere, and they look quite successful at it.

Re: Uber Posts $708M Loss as Finance Head Leaves

#226

Post by malandrew » Thu, Jun 01, 2017, 6:12 PM UTC

mattmanser wrote: post #213

aetherson wrote: post #209

Earlier quoted context omitted.

The few numbers that Uber posted look like good news for them, but let's not overstate things. The reason that people post numbers YoY instead of QoQ most of the time is not to artificially inflate numbers. It's because lots of companies have yearly seasonality. If you looked at Apple's numbers for Q4 (real Q4, Oct-Dec, not Apple's fiscal Q4) quarter over quarter, they'd always look like they were on a massive, incre…

Looking at this interesting pdf: http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_... It looks like Taxis are seasonal and so they'll see a drop in revenue over summer (page 4). Though elsewhere they note that airport fares are up over summer. It also looks like there's a large, several day, drop over the Xmas period every year, which could potentially make Q1 better than Q4. Although I know in the UK at l…

I would expect large multinational companies that earn revenue in all timezones and in both the northern and southern hemisphere to exhibit limited seasonality. Figures may be skewed in favor of their larger and more mature markets, but not all countries celebrate the same holidays (like Christmas) and summer and winter and flipped in the northern and southern hemispheres.

I would expect local competitors to exhibit far greater seasonality than any major multinational.

Re: Uber Posts $708M Loss as Finance Head Leaves

#227

Post by marcosdumay » Thu, Jun 01, 2017, 6:12 PM UTC

thisisit wrote: post #184

ProfessorLayton wrote: post #26

Earlier quoted context omitted.

$1,500,000 per hour in revenue sounds great. Spending $1,872,000 per hour to bring in $1,500,000 per hour sounds less great. I understand that it takes money to make money, but this is one of the most extreme cases in a business.

As a value investor or Warren Buffett follower would put it, they are very capital intensive. This can turn into a bad sign if they can't build a moat (monopoly of sorts) or take a hit on their margins.

What I can even begin to imagine is why are they that much capital intensive?

Uber's actual product is a SaaS. Everything else is contracted. Where is that much money going?

Re: Uber Posts $708M Loss as Finance Head Leaves

#228

Post by Marazan » Thu, Jun 01, 2017, 6:24 PM UTC

dingo_bat wrote: post #211

Marazan wrote: post #155

Earlier quoted context omitted.

Do you think Uber has spent 15 billion dollars on research? I have a bridge to sell you if you do.

No, when did I say they spent everything on research? Most of the spending must have been on operating their service.

Uber could have not run a loss making minicab service and spent even more on self driving car research.

Re: Uber Posts $708M Loss as Finance Head Leaves

#229

Post by throwaway434232 » Thu, Jun 01, 2017, 6:31 PM UTC

rtpg wrote: post #198

resf wrote: post #160

Earlier quoted context omitted.

They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market. In other words, even Lyft's best case scenario would be a huge step down for Uber.

In a world where Lyft wins the US market, they then have a battle chest for future expansion. Apparently Uber is already profitable in the US and thus can use that to finance further growth, but nothing is stopping Lyft from going back in that game at a later date. If anything Uber's best strat would probably be to refocus on the US and crush Lyft everywhere, rather than give it the room to breath it needs.

Uber is apparently already profitable in the US. Does anyone know if Lyft is? If it is not, then that would suggest that Lyft is more guilty than Uber of subsidizing rides in order to win market share.

    2016 numbers:

    Lyft Revenue: $700 million
    Lyft Losses: $600 million
    Uber Revenue: $6 billion
    Uber Losses: $2.8 billion

The ratio of revenue to losses suggest that Uber is almost twice as efficient as Lyft, and Uber's losses are probably further compounded as it includes many more future investments such as international markets that aren't yet as mature as the US market, and products/services that for which Lyft has no comparable offering like UberRush and UberEats. Lyft also doesn't have any investment in self-driving cars that I'm aware of.

Re: Uber Posts $708M Loss as Finance Head Leaves

#230

Post by throwaway434232 » Thu, Jun 01, 2017, 6:37 PM UTC

ubernostrum wrote: post #171

resf wrote: post #160

Earlier quoted context omitted.

They clearly have different objectives. Uber wants to be a huge multinational company, whereas Lyft can only hope to win the US market. In other words, even Lyft's best case scenario would be a huge step down for Uber.

No amount of "we were briefly a huge multinational" will compensate for a fundamentally unsound business. Sooner or later the free money is going to run out and Uber is going to have to stop hemorrhaging nearly a billion dollars every quarter. When that day comes they're not going to have a lot of options to stop the bleeding: raising prices and cutting back the markets they operate in are likely to be the first thin…

They are growing revenue faster than their losses and they are profitable in mature markets. That sounds like a fundamentally sound business to me. The cognitive dissonance you're suffering from is the inability to believe that investors will take on losses on the order of a billions of dollars to build a profitable business. Millions of dollars are okay, but changing millions to billions and people are like "that money has to run out eventually". That's not how investors operate. If the opportunity is on the order of billions of dollars as well (maybe trillions), investments of billions of dollars isn't that big in the grand scheme of things. What matters is that the size of the opportunity is large and that revenue grows faster than losses. So long as those two things are true, there will be no lack of investors willing to pony up the money to be on that gravy train.