141–150 of 256 posts
I'll bet that gets trimmed even more if the deal closes. Losses are increasing, not decreasing.
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"controlled expenditures through higher pricing and "friendlier" demeanor" - Assuming this refers to Lyft, Lyft's expenses compared dollar to dollar are on-par if not worse than Ubers - https://techcrunch.com/2017/11/14/unpacking-lyfts-projected-... As long as Uber can keep the cost per ride lower than other competitors, it just needs to wait for the burn to end faster on the competitors side before turning break-eve…
> As long as Uber can keep the cost per ride lower than other competitors, it just needs to wait for the burn to end faster on the competitors side before turning break-even Uber have joined loss leading with scale, a combination that works if one has access to an endless spigot of money. The scandals have impacted Uber's fundraising. Time for eyes to match stomach. I predict, in addition to lay-offs, we'll soon see…
Also Disclaimer: this is not investment advice. Do not buy or sell anything based on this Internet comment.
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Offerings like Uber Pool and Lyft Line are the future of the business and depend entirely on economies of scale. Putting multiple paying passengers in the car at once and reducing driver downtime completely changes the economics, but only if there is a high density of riders and drivers. Edit: There are two possible stories here about Uber and Lyft's losses, and we can't tell which is right from the outside. 1. Uber…
The problem though is that they led the way by breaking down all the regulatory barrier to entries. Whats to stop anyone from starting a ridesharing company tomorrow?
You have the give your drivers a reason to use your app instead of uber.
You have to give riders a reason to use your app instead of uber.
The two reasons have to be good enough to build a large enough network for the rideshare system to work.
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…
What happens to stock which isn't part of the IPO? Ie, all the stock owned by employees, investors, etc? Does it become instantly tradeable? I would imagine that considering the long road, a lot of people are really ready to sell. There are lots of owners that will have achieved 50X or more return, even at a low market cap. Former employees with option strike prices @ £20m, early investors that got in @ £150m.... Tha…
But I honestly doubt that Uber will ever make it to IPO; at least not an IPO that pays off employees in any meaningful way. Their business model is basically "buy for $10 and sell for $8" -- it's fundamentally flawed, and they're about to get a whole bunch of competition in the form of self-driving fleet management. New challengers wouldn't have the overhead of Uber's legacy infrastructure / driver incentives / etc. and much of the tech that made Uber unique has been commoditized. I doubt their IPO will even cover the late-stage investment they've received; much of their valuation was based on brand value which has been thoroughly destroyed by recent scandals.
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> they can lay off a ton of staff, and license their logistics software to a lot of companies. I have a feeling this isn't as easy as you think. There are some great talks on Uber's microservice architecture and it's pretty insane. They could create new services, but I have a feeling their existing infrastructure is very custom. They've got over 1,000 microservices and it's actually difficult to get an exact number.
Uber's microservice architecture and it's pretty insane Symptomatic of too many engineers and too little leadership
The talk is invariably about some really impressive bit of software that appears to have required equally heaping measures of smarts and money to build, and also appears to be a $10 solution to a 10¢ problem.
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...
After reading the Times article (currently #7 on HN list) it would look like a fine is probably the least of their worries in the Waymo case.
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Even if they manage to kill their competition -- and I'm not expecting they will -- I don't understand what their endgame is. I don't see what their moat is. Ridesharing companies are not hard or expensive to start. They'll have a hard time extracting monopoly rents, and there isn't much of an economy of scale they can reap. And once autonomous cars become part of the picture, I think they're in an even worse positio…
They do have a small moat in the short term; the network of drivers, brand recognition they've built up (even w/ the bad press), the large codebase they have by now, and the amount of capital to start such a business from scratch is not insignificant. However, you are right to bring up autonomous cars. I always thought it amusing that Kalanick et al were so anxious to bet the house on autonomous cars, when in fact, t…
1. This is probably further out than a lot of people assume. Reliable door to door fully autonomous in dense cities is one of the hardest use cases to solve but it's more or less what you need for self-driving taxis.
2. The pricing probably also won't "plummet." The IRS mileage rate (about 53 cents/mile) is probably a reasonable floor to use. That's still about half current Uber rates.
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If Uber had to, they could flip the profit switch. They haven’t chosen to because they’re reinvesting in growth, but if it was an existential question they could survive in the short term.
Reinvesting for growth is a terrible euphemism for subsiding taxi fares. When they flip the switch they become more expensive that a regular mini-cab. Customers will leave in droves, drivers will leave in droves. There s no loyalty to a middleman.
I have no idea why (maybe less drivers?) but I already stopped using Uber because of that. If their prices when even higher then I'd simply never use them again instead of the occasional time that I do now.
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If Uber had to, they could flip the profit switch. They haven’t chosen to because they’re reinvesting in growth, but if it was an existential question they could survive in the short term.
Reinvesting for growth is a terrible euphemism for subsiding taxi fares. When they flip the switch they become more expensive that a regular mini-cab. Customers will leave in droves, drivers will leave in droves. There s no loyalty to a middleman.
With Uber, I think there is some degree of loyalty just because of the ubiquity and convenience. Plus, I imagine their prices will be more or less the same as a taxi since they don't have the expense of dealing with the regulatory overhead (since they just blatantly ignore the law instead)
I am sorry, but I don-t understand why they lose so much money. They take 30 % of all trips, they don-t have cars, they don-t pay salaries to drivers. Is it the infrastructure so expensive?
It happens in various forms, but I suspect minimum-payout subsidies are one of the main causes.
In many cities Uber is trying to shorten wait times (so there's a car very close to you always), and the only way to do this is to flood the streets with drivers. Flooding the streets with drivers lowers each driver's earning ability, since there are now more drivers competing for the same number of passengers.
To make sure drivers don't quit, Uber has been in the habit of guaranteeing payouts - if you work this area during a particular time period, they guarantee you a minimum level of earnings, paying you the difference if there aren't enough passengers.
This is a big part of how they lose money - in order to maintain a system where a car is always nearby, they need to pay drivers a lot more than they make from the passengers.