171–180 of 256 posts
They still don’t have a real business (a company kept on life support by constant external cash injections is not a real business).
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"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.
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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.
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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.
Oddly enough, when I compare Uber to Lyft in the East Bay, 99% of the time Lyft is cheaper by at least $3. Even Uber Pool is usually the same or slightly more expensive than a dedicated Lyft. 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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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?
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...
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.
It's quite tricky to package an internally used system into something that can be sold and used by others. It most likely takes years to get to any significant amount of sales.
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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…
>And once drivers are taken out of the picture, ride prices will plummet. 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. T…
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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…
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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.
"license their logistics software to a lot of companies." It's quite tricky to package an internally used system into something that can be sold and used by others. It most likely takes years to get to any significant amount of sales.
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"license their logistics software to a lot of companies." It's quite tricky to package an internally used system into something that can be sold and used by others. It most likely takes years to get to any significant amount of sales.
Every taxi company on earth would buy this immediately.
* Thinks they have a logistics problem in the first place.
* Thinks that software can solve that problem.
* Are in the market for software to solve that problem.
* Think that Uber's software is the software that would solve that problem the best.
That's a hell of a lot of assumptions, each of which is fairly easy to pick apart.