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Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

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Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#51

Post by BinaryIdiot »

JumpCrisscross wrote: post #10

Uber had $6.6bn on hand at the end of June [1]. That means they are down to $5.1bn. Absent cost-cutting, that implies a 9 to 12 month runway. Even if SoftBank injects $1bn, that could only mean a few months’ runway. A large fine in the Waymo case [2] could literally bankrupt them. [1] https://venturebeat.com/2017/08/23/uber-is-still-burning-cas... [2] https://mobile.nytimes.com/2017/11/29/business/waymo-uber-tr...

Yeah I am really perplexed with Uber's business model. They can't survive much longer and they can't keep getting injections of cash to stay alive, can they? It's rumored they'll IPO in 2019, if I remember correctly, which means they have to somehow survive until then to at least reach that stage.

Are they planning to raise prices? Cut employees? What are they planning on doing here?

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#52

Post by SyneRyder »

__sha3d2 wrote: post #29
chollida1 wrote: post #2

Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…

> And to top it all off, the biggest thing driving their valuation recently, self driving cars, appears to be in serious jeopardy, can anyone make a credible case of Uber having self driving fleet in the next 5 years? Uber currently sends teams to major cities all over the world to build maps for self driving cars. They outfit cars in those cities with 6 figure camera rigs and enable 'passive collection', where maps…

I wonder if one of those international cities is Perth, Australia? We had a news report today that Perth is launching trials of a self-driving on-demand taxi service in April 2018:

http://www.zdnet.com/article/navya-bringing-driverless-vehic...

(I realize the trials aren't Uber, but if our government is getting ready to allow self-driving taxis, I imagine Uber would want to be prepared & ready to launch ASAP.)

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#53

Post by krrrh »

StevePerkins wrote: post #16
albertgoeswoof wrote: post #6

It is strange that private investors are willing to fund my discounted travel.

I seriously don't understand the endgame here. Apparently, it WOULD BE possible to completely kill off the legacy taxi industry given 10 years or so of artificially subsidized pricing. So I understand the concept of disrupting a previous oligarchy, replacing it with a new monopoly, and then profiting through rent seeking. But where are the barriers to entry that would allow Uber to solidify as that new monopoly? Ther…

> we'll likely see numerous other competitors emerge to compete on price

I've been beating this drum for years. One interesting point is that competitors aren't only competing on price, and there are a lot of ways to cut into Uber's market. Juno [1] offers an example that focused on a tight geography (Manhattan), and became popular by paying drivers more, scooping the highest rated drivers from Uber, and offering consumers a perceived better experience. Expect this to increase as people become more used to hailing cars from inside of their maps applications which act as aggregators.

In places like Germany where the laws make it hard for Uber to operate, smaller companies like MyTaxi offer ride-hailing services to the traditional taxi network. Their valuation likely offers a very different idea of how much of the surplus offered by ride-hailing apps can ultimately be captured by apps.

[1] Acquired earlier this year by the VW-funded Gett - https://techcrunch.com/2017/04/26/on-demand-ride-service-get...

[2] https://de.mytaxi.com/index.html

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#54

Post by swimfar »

sandworm101 wrote: post #30
mrgordon wrote: post #26

Earlier quoted context omitted.

They have around 12,000 employees according to Wikipedia (and a few other sources show a similar figure). If we figure the average employee is 250,000/year in liabilities on the balance sheet (salary + benefits + options/RSUs) then thats $3 billion a year in employee expenses. I don't think $250k is too unrealistic considering the massive capital gains many employees must have on paper as well as the high level of ta…

250k may well be an average, but not the type of average that matters. The few high-pay people warp the average. They will not be culled before an IPO as doing so will reduce confidence. Uber needs to keep its headliners. They can only cut from the plebs costing in the 50-100K range. So either they need to fire 4x as many people, or a cull won't solve the problem.

I doubt that there's a single full-time employee (in the US) that only costs them 50k/year. Total overhead costs are a lot higher than the employee's salary. I have no idea what the distribution of salaries look like, so this doesn't necessarily invalidate your point.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#55

Post by ihsw2 »

BinaryIdiot wrote: post #51
JumpCrisscross wrote: post #10

Uber had $6.6bn on hand at the end of June [1]. That means they are down to $5.1bn. Absent cost-cutting, that implies a 9 to 12 month runway. Even if SoftBank injects $1bn, that could only mean a few months’ runway. A large fine in the Waymo case [2] could literally bankrupt them. [1] https://venturebeat.com/2017/08/23/uber-is-still-burning-cas... [2] https://mobile.nytimes.com/2017/11/29/business/waymo-uber-tr...

Yeah I am really perplexed with Uber's business model. They can't survive much longer and they can't keep getting injections of cash to stay alive, can they? It's rumored they'll IPO in 2019, if I remember correctly, which means they have to somehow survive until then to at least reach that stage. Are they planning to raise prices? Cut employees? What are they planning on doing here?

The idea is to drag the entire ride hailing industry underwater long enough to drown out competitors, and the trick is to do this without drowning themselves in the process.

This is the nature of "predatory" pricing.

There is something to be said for volume and if a couple competitors die in the process then Uber's volume can only go up. Unfortunately their competitors have found a variety of ways to keep from being dragged down (eg: regulatory support of municipal taxi orgs) or ways to keep oxygen expenditure stable (eg: controlled expenditures through higher pricing and "friendlier" demeanor).

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#56

Post by watwut »

hbosch wrote: post #40
saas_co_de wrote: post #12

Earlier quoted context omitted.

An IPO would be the best scenario but it is far from certain. Given the widespread unethical (and probably criminal) activity that was conducted at the highest levels of the company I would say there are even odds that there are some big skeletons in the closet that opening the books would reveal and that is why they have stayed private so long. Why else would Benchmark and others be running for the exits now? If all…

> Given the widespread unethical (and probably criminal) activity that was conducted at the highest levels of the company I would say there are even odds that there are some big skeletons in the closet that opening the books would reveal and that is why they have stayed private so long. I don't think this can be understated. In the social and political climate of today, it would be hard (I think) for Uber to have a b…

I kind of suspect that Uber might have skeletons much bigger then sexual misconduct. I would be surprised if their financials were in order and if legal documents did not contained a lot of lies.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#57

Post by rtx »

StevePerkins wrote: post #16
albertgoeswoof wrote: post #6

It is strange that private investors are willing to fund my discounted travel.

I seriously don't understand the endgame here. Apparently, it WOULD BE possible to completely kill off the legacy taxi industry given 10 years or so of artificially subsidized pricing. So I understand the concept of disrupting a previous oligarchy, replacing it with a new monopoly, and then profiting through rent seeking. But where are the barriers to entry that would allow Uber to solidify as that new monopoly? Ther…

They can simply used the tech solutions they have developed and try to do something like AWS.

I recently went on a holiday to place where Uber is not there. It made me realise how much actual value they provide me.

As someone who was born near mid eghties, Amazon and Uber are the only two apps who have my credit card.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#58

Post by staticautomatic »

saas_co_de wrote: post #12
chollida1 wrote: post #2

Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…

An IPO would be the best scenario but it is far from certain. Given the widespread unethical (and probably criminal) activity that was conducted at the highest levels of the company I would say there are even odds that there are some big skeletons in the closet that opening the books would reveal and that is why they have stayed private so long. Why else would Benchmark and others be running for the exits now? If all…

I don't think any Uber investors can be characterized as smart, even if they have made or end up making money.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#59

Post by jethro_tell »

mylons wrote: post #20
JumpCrisscross wrote: post #10

Uber had $6.6bn on hand at the end of June [1]. That means they are down to $5.1bn. Absent cost-cutting, that implies a 9 to 12 month runway. Even if SoftBank injects $1bn, that could only mean a few months’ runway. A large fine in the Waymo case [2] could literally bankrupt them. [1] https://venturebeat.com/2017/08/23/uber-is-still-burning-cas... [2] https://mobile.nytimes.com/2017/11/29/business/waymo-uber-tr...

the waymo case will certainly take some time to play out, wont it? I'm assuming year(s), but that's just a guess.

Probably, but can they successfully go public with that unsettled?

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#60

Post by sandworm101 »

swimfar wrote: post #54
sandworm101 wrote: post #30

Earlier quoted context omitted.

250k may well be an average, but not the type of average that matters. The few high-pay people warp the average. They will not be culled before an IPO as doing so will reduce confidence. Uber needs to keep its headliners. They can only cut from the plebs costing in the 50-100K range. So either they need to fire 4x as many people, or a cull won't solve the problem.

I doubt that there's a single full-time employee (in the US) that only costs them 50k/year. Total overhead costs are a lot higher than the employee's salary. I have no idea what the distribution of salaries look like, so this doesn't necessarily invalidate your point.

Their sales/brand reps are reportedly paid 20$/hour, which works out to about 40k. I don't know what the benefit package is but I doubt it's much, as I doubt they are all paid for full 40-hour weeks. So I assume they have a pool of sub-40k people.
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