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The Wheels Come Off Uber

nakedcapitalism.com

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Re: The Wheels Come Off Uber

#91

Post by clairity »

cs702 wrote: post #25
clairity wrote: post #24

Earlier quoted context omitted.

the article is frustratingly light on actual reasoning about why uber can't become profitable. the tl;dr is basically "it looks bad so they're going to fail". it does look very bad but that in itself (even with the various details mentioned) doesn't shine a light on the path that uber will take to failure. it only shows that any path they could take is treacherous. it's an opinion piece with a bunch of facts thrown a…

FYI, the OP links to a 10-part series of posts about Uber's economics by someone with decades of experience in the transportation industry. Here's a link to part one: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...

that article is better, but that doesn't change the fact that the originally linked article is a puff piece.

even in your article, it's not obvious that the economics of uber is doomed. it doesn't talk about the economics of the taxi industry, but simply makes a big assumption that it's an efficient market (just considering medallions should make you skeptical of that claim), so uber must get it's economics in line with the taxi industry. that's not obvious. (maybe it's explained in the 10 parts, but 10 parts?!?! seems like an editor might be warranted).

to be clear, i'm not defending uber, just that the arguments presented aren't so convincing once you dig into them a bit (and appeals to authority make me even more skeptical. it's like saying "trust me"... it sets the alarm bells off).

Re: The Wheels Come Off Uber

#92

Post by alejohausner »

r00fus wrote: post #85
emodendroket wrote: post #58

Earlier quoted context omitted.

Is this satire or what?

It's the same reason for why "investor class" let Amazon run on negative to slim profits for so long (allowing them to compete with others that could not do this). Some (I think it was Gruber) said it's like a subsidy from Wall Street to Amazon customers. I feel that reasoning is short-sighted and dangerous.

Of course capitalists want to make money. Their primary goal is very far from charity. They don't want to improve the common weal (although publicly they say they want to help, and some even convince themselves they mean to help society, to rationalize their selfish motives).

I'm a bit disturbed that people took my satire seriously. Are rich people different now? Is that what people think?

Re: The Wheels Come Off Uber

#93

Post by clairity »

sqeaky wrote: post #70
clairity wrote: post #24

Earlier quoted context omitted.

the article is frustratingly light on actual reasoning about why uber can't become profitable. the tl;dr is basically "it looks bad so they're going to fail". it does look very bad but that in itself (even with the various details mentioned) doesn't shine a light on the path that uber will take to failure. it only shows that any path they could take is treacherous. it's an opinion piece with a bunch of facts thrown a…

The reasoning in the article seemed strong to me: Street level transport is a commodity and the market is mature. There is a maximum amount of value to extract from this business and the current companies almost do that. Uber spent way more money than the industry is likely to generate to try and steal their business. Combine that seemingly solid market reasoning with them being opposed often and them fucking up almo…

your summary of the reasoning is much better than the article itself, which simply asserts that uber is doomed while randomly citing recent developments in the news about uber.

given what i know (which is admittedly not much), i probably wouldn't invest in uber at this point either, but i remain skeptical that the taxi industry is a mature and efficient market, such that uber has no path to profitability (setting aside all their other asinine self-inflicted wounds).

Re: The Wheels Come Off Uber

#94

Post by malandrew »

r00fus wrote: post #84
malandrew wrote: post #74

Earlier quoted context omitted.

Many reasons, but I can't/won't elaborate. What I will say is that the author's bias has given him/her some major blinders and that s/he's become incapable of seeing ways in which s/he is wrong. My suggestion is that the author engage in a forecasting technique developed at Royal Dutch Shell known as scenario planning. One of the key features of scenario planning is that whenever you finish arriving at a conclusion,…

It's not the source's responsibility to be 100% unbiased. It's your responsibility as a reader to detect and adjust for the bias. Consider applying your advice to your own meta-analysis. If you can't elaborate on your judgement, perhaps it's you who have blinders on?

> It's not the source's responsibility to be 100% unbiased.

100% no bias isn't possible. However, are you suggesting that that they shouldn't even try to mitigate their biases? Not every reader is as informed as authors who have taken time to research a topic. Society commonly defers to experts. If it becomes common and accepted for experts to allow or even embrace their biases unabashedly, then there is no reason to defer to experts any more because we will never know if we're being subject to an endless stream of lies of omission.

> If you can't elaborate on your judgement, perhaps it's you who have blinders on?

That's totally possible. However I know for my own sake that I have certainly considered many of the assumptions and predictions the OP presented. That doesn't help you any, but it doesn't hurt you either because I haven't provided any of my own analysis (with my own biases) in the other direction either. I merely provided you with some new tools to better evaluate the predictions made by the OP. If you choose not to use those tools, that's your prerogative.

Re: The Wheels Come Off Uber

#95

Post by watwut »

clairity wrote: post #91
cs702 wrote: post #25

Earlier quoted context omitted.

FYI, the OP links to a 10-part series of posts about Uber's economics by someone with decades of experience in the transportation industry. Here's a link to part one: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...

that article is better, but that doesn't change the fact that the originally linked article is a puff piece. even in your article, it's not obvious that the economics of uber is doomed. it doesn't talk about the economics of the taxi industry, but simply makes a big assumption that it's an efficient market (just considering medallions should make you skeptical of that claim), so uber must get it's economics in line w…

It might be puff piece, but at least it does not focus on "toxic culture forced CEO to resign". The latter story might feel good and thus be more popular, but is less likely reason for investors revolution then "they are losing money, have no plan and are overall ineffective".

It is true that former CEO personality was important for uber and different dude or lady could not achieve the same, but achievement here is losing tons of money on business that does not seem to be profitable ever. That is odd definition of winning.

Re: The Wheels Come Off Uber

#96

Post by xbmcuser »

prostoalex wrote: post #53
cs702 wrote: post #7

The 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 o…

Price comparison against current taxi services operating in the US is akin to a price comparison of a complex medical procedure across US medical providers - there's a lack of transparency around pricing, and a bunch of gotchas, such as the driver not taking the optimal route or frowning at you for a mere 10% tip. So until taxicab operators in major cities get a nifty app with guaranteed pricing most of people would…

In Singapore grab has added taxi's to it's fixed price or you can book a taxi with normal meter fare. At peak periods taxi with meter is about 25-35% cheaper and without peak 5-10% cheaper. The government has also allowed taxi companies to offer fixed fares from their apps the way things are going I don't think uber will be able to compete very long if it actually tries to be profitable.

Re: The Wheels Come Off Uber

#97

Post by sqeaky »

clairity wrote: post #93
sqeaky wrote: post #70

Earlier quoted context omitted.

The reasoning in the article seemed strong to me: Street level transport is a commodity and the market is mature. There is a maximum amount of value to extract from this business and the current companies almost do that. Uber spent way more money than the industry is likely to generate to try and steal their business. Combine that seemingly solid market reasoning with them being opposed often and them fucking up almo…

your summary of the reasoning is much better than the article itself, which simply asserts that uber is doomed while randomly citing recent developments in the news about uber. given what i know (which is admittedly not much), i probably wouldn't invest in uber at this point either, but i remain skeptical that the taxi industry is a mature and efficient market, such that uber has no path to profitability (setting asi…

I could be convinced to be more neutral by as little as a reasonable argument that they have a plan. I have not yet seen this plan. I have seen both pro and anti uber zealots though.

Re: The Wheels Come Off Uber

#98

Post by emodendroket »

alejohausner wrote: post #92
r00fus wrote: post #85

Earlier quoted context omitted.

It's the same reason for why "investor class" let Amazon run on negative to slim profits for so long (allowing them to compete with others that could not do this). Some (I think it was Gruber) said it's like a subsidy from Wall Street to Amazon customers. I feel that reasoning is short-sighted and dangerous.

Of course capitalists want to make money. Their primary goal is very far from charity. They don't want to improve the common weal (although publicly they say they want to help, and some even convince themselves they mean to help society, to rationalize their selfish motives). I'm a bit disturbed that people took my satire seriously. Are rich people different now? Is that what people think?

Frankly you could find lots of posts like this on HN which are entirely earnest.

Re: The Wheels Come Off Uber

#99

Post by ithinkinstereo »

malandrew wrote: post #94
r00fus wrote: post #84

Earlier quoted context omitted.

It's not the source's responsibility to be 100% unbiased. It's your responsibility as a reader to detect and adjust for the bias. Consider applying your advice to your own meta-analysis. If you can't elaborate on your judgement, perhaps it's you who have blinders on?

> It's not the source's responsibility to be 100% unbiased. 100% no bias isn't possible. However, are you suggesting that that they shouldn't even try to mitigate their biases? Not every reader is as informed as authors who have taken time to research a topic. Society commonly defers to experts. If it becomes common and accepted for experts to allow or even embrace their biases unabashedly, then there is no reason to…

If you go through their 10-part series, they go over counter-arguments that invalidate their analysis.

More importantly, if you're going to dismiss their arguments, it would be nice to offer counter-analysis for why you think they're wrong.

Re: The Wheels Come Off Uber

#100

Post by tedsanders »

mikeash wrote: post #27
tedsanders wrote: post #21

Earlier quoted context omitted.

Uber loses money, but it doesn't sell rides at a loss. Up to 2015 at least (the date of the best finance leak I've seen), Uber's cut of fares was ~18%; and furthermore, that 18% cut more than covered Uber's costs of sales. Source: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver... Uber actually makes money on each ride - it's just that the gross profit from those rides is short of covering its operating…

Where is all their money going, then? Seems like a business that should have relatively low overhead.

They have 12,000 employees, apparently. Diversity numbers they released earlier this year bucketed those employees into tech, non-tech, and customer support.

Their fixed costs probably include R&D (tech) and SG&A (non-tech). Customer support depends on how they do their accounting.

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