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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

#161

Post by lenley »

lev99 wrote: post #143
jsonne wrote: post #125

Earlier quoted context omitted.

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?

The network effect. 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.

I would argue there isn't really a network effect for lyft or uber or any ride-sharing company for that matter. There might be brand and price effects for the companies to battle over amidst both riders and drivers.

I'd say there is a network effect for ride-sharing in aggregate, neither Lyft nor Ueber has been good at locking drivers and riders in with loyalty programs to try to keep people solely on their platform.

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

#162

Post by bwilliams18 »

andrewem wrote: post #138
ProAm wrote: post #81

Earlier quoted context omitted.

Honestly if they need to make money, they can lay off a ton of staff, and license their logistics software to a lot of companies. It wouldn't be what their game plan has been, definitely a severe pivot but they would be a money printing machine for years to come.

Their revenues are in the billions per year, and so their investors would be looking for new revenues in the billions. The assumption that there's an untapped multi-billion dollar market for logistics software that they could quickly dominate - quickly enough to avoid running out of money - seems unwarranted.

There's an enormous opportunity in UberEATS if they can get the unit economics right. They could also retreat into already profitable markets .

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

#163

Post by endorphone »

gaius wrote: post #95
djsumdog wrote: post #92

Earlier quoted context omitted.

> 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

Yet technology has never been a problem or a limiting factor of Uber. Uber deserves plenty of criticism, yet it seems rich to blame technology when they grew from nothing to enormous with few if any hiccups. It worked.

But yeah, extraordinarily few internal projects can be turned into an external project without enormous rework. It's only the myth of middle managers who perceive software as a growing asset who think otherwise.

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

#164

Post by paulcole »

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...

>That means they are down to $5.1bn.

Just curious, but does it actually mean this? I thought some of their $1.5B losses could be in the form of debt that has to be repaid in the future?

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

#165

Post by sidlls »

gaius wrote: post #95
djsumdog wrote: post #92

Earlier quoted context omitted.

> 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

That explains most of the engineering culture in the Valley, really. Even the "leadership" is on board with it, because they have their own resume driven development to pursue.

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

#166

Post by xbzbanna »

lenley wrote: post #161
lev99 wrote: post #143

Earlier quoted context omitted.

The network effect. 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.

I would argue there isn't really a network effect for lyft or uber or any ride-sharing company for that matter. There might be brand and price effects for the companies to battle over amidst both riders and drivers. I'd say there is a network effect for ride-sharing in aggregate, neither Lyft nor Ueber has been good at locking drivers and riders in with loyalty programs to try to keep people solely on their platform.

More drivers means faster pickups for riders, and more riders means less downtime for drivers. Drivers doing more rides per hour means they can be paid less per ride, lowering the price of a ride and further increasing demand. Sounds like a network effect to me. Offerings like Lyft Line and Uber Pool multiply both of these effects.

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

#167

Post by uptown »

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?

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

Both! Just don't tell anyone.

https://twitter.com/neilanalien/status/627873374505562112

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

#168

Post by semi-extrinsic »

bob_theslob646 wrote: post #71
ihsw2 wrote: post #55

Earlier quoted context omitted.

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…

Is that really the idea? Do you know how large the ride hailing market is? I am almost positive the point of subsidizing the price of the rides is to get you addicted/ build up a habit or get you comfortable using the service. I think they are aware of the competition and are comfortable owning 60+% versus trying to get 80%+. Their revenue is growing which is still wild despite bad press. >Unfortunately their competi…

> I think they are aware of the competition and are comfortable owning 60+% versus trying to get 80%+.

While in reality, their overall share of the ride-hailing + taxi market in the US is ~25% as of August 2017, and far less in Europe and Asia.

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

#169

Post by mariushn »

uptown wrote: post #167
BinaryIdiot wrote: post #51

Earlier quoted context omitted.

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?

"Are they planning to raise prices? Cut employees? What are they planning on doing here?" Both! Just don't tell anyone. https://twitter.com/neilanalien/status/627873374505562112

It's already 25% just for two apps. That's insane. They don't do any specific work for a trip for these money.

It's like having Stripe getting a 25% cut from all card transactions.

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

#170

Post by hkmurakami »

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...

It really just depends on what their gross and net margins look like, and what elements they can ramp up/down quickly.
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