The Wheels Come Off Uber
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The Wheels Come Off Uber
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Re: The Wheels Come Off Uber
#2If this is true if uber, that it has no path to profitability, isn't it also true of ubers competitors? Their price points are fairly similar and they all, at some point, offer incentives to ensure you keep using their service.
Re: The Wheels Come Off Uber
#3Is it just me or is this author overlaying a very strong political bias over the story of Uber?
Re: The Wheels Come Off Uber
#4If this is true if uber, that it has no path to profitability, isn't it also true of ubers competitors? Their price points are fairly similar and they all, at some point, offer incentives to ensure you keep using their service.
Yes. The argument is that there simply isn't $80 billion to be made in the taxi industry; it's inherently a comodity business where boring companies should be able to make a steady 2% return rather than the kind of industry where a company that manages to sieze the market can make it back in monopoly rents.
Re: The Wheels Come Off Uber
#5By some measures Uber has been fabulously successful, coming from nowhere to the largest privately held company in seven years, and now a $70 billion g/publicly traded/private/ company.
Uber has done a stunning job of disrupting a crony-capitalist, monopolistic system. If they are still searching for a way to make a profit, surely they'll figure it out before long.
* updated to remove publicly traded
Re: The Wheels Come Off Uber
#6If this is true if uber, that it has no path to profitability, isn't it also true of ubers competitors? Their price points are fairly similar and they all, at some point, offer incentives to ensure you keep using their service.
I think there are lots of companies that can capture the market better and for less money. Just look at mytaxi in Europe for a smaller scale conpany that is expanding rapidly.
Re: The Wheels Come Off Uber
#7The most worrisome aspect of this essay is that it questions whether Uber has a viable business model.
The OP argues that Uber will never be able to charge prices in excess of the level required by a traditional taxi/limo operator to be profitable for long enough to recoup the billions of dollars the company has burned by subsidizing the price of rides. Put another way, even if Uber drives every competing taxi/limo operator out of business, as soon as the company raises prices to cover costs -- vehicle, insurance, maintenance, fuel, credit card processing, license fees, and (at least for now) labor -- new entrants (and revived old entrants) would quickly come into the market, preventing Uber from keeping prices up.
If the OP is right, Uber is truly in a precarious situation, because, as Brad Feld recently wrote: "the markets reward growth until they don’t. Then they reward profitability. The trick is to be in a position to make the switch when you need to. Lots of CEOs and boards fantasize about this, but don’t actually have a plan in place to do this as they expect the future – where the switch from growth to profitability – will never come. Or, they hope the exit will happen before this moment."[1]
Uber doesn't seem to have a plan to make the switch. If the markets start demanding profitability (or at least a convincing plan for reaching profitability), Uber's wheels could indeed come off very quickly.
[1] https://www.feld.com/archives/2017/06/lessons-internet-bubbl...
Re: The Wheels Come Off Uber
#8By some measures Uber has been fabulously successful, coming from nowhere to the largest privately held company in seven years, and now a $70 billion g/publicly traded/private/ company. Uber has done a stunning job of disrupting a crony-capitalist, monopolistic system. If they are still searching for a way to make a profit, surely they'll figure it out before long. * updated to remove publicly traded
Uber isn't publically traded.
Re: The Wheels Come Off Uber
#9By some measures Uber has been fabulously successful, coming from nowhere to the largest privately held company in seven years, and now a $70 billion g/publicly traded/private/ company. Uber has done a stunning job of disrupting a crony-capitalist, monopolistic system. If they are still searching for a way to make a profit, surely they'll figure it out before long. * updated to remove publicly traded
Surely why?
Re: The Wheels Come Off Uber
#10By some measures Uber has been fabulously successful, coming from nowhere to the largest privately held company in seven years, and now a $70 billion g/publicly traded/private/ company. Uber has done a stunning job of disrupting a crony-capitalist, monopolistic system. If they are still searching for a way to make a profit, surely they'll figure it out before long. * updated to remove publicly traded
It's easy to disrupt a crony-capitalist, monopolistic system by selling your product at a loss, but you can't make a profit that way.