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Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

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Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#11

Post by clairity »

hari_seldon_ wrote: post #7
emodendroket wrote: post #4

Earlier quoted context omitted.

Probably not great, but what if the model of both businesses just isn't actually viable without massive injections of funds?

Agreed. The dominant strategy seems to be to undercut competitors until they are driven out of business, and then you can raise prices. However, raising prices then gives opportunity for a new ride-sharing service to come in and say that they can compete by offering lower prices for a period of time...

yes, that's how capitalism is designed to work. the window in which you can make outsized profits is meant to be temporary so companies can't just rest on their laurels.

it's beautiful when it works.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#13

Post by matte_black »

The only thing Uber can ever deliver is people and things to their final destinations. When Uber shuts down and goes out of business I as a consumer will just roll into the next service, and will not shed even a single tear for all who invested in Uber.

Sorry, but thanks for all the cheap rides.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#14

Post by thisisit »

emodendroket wrote: post #5
Havoc wrote: post #2

Giving things away at <cost is good for growth and not much else.

Well, the idea is that they kill off every competing service and then can raise prices. Also that they can beat everyone else to self-driving cars and eliminate the cost of labor. Other articles on NC have called the feasibility of both of those into question.

> Also that they can beat everyone else to self-driving cars and eliminate the cost of labor.

Or ask for regulations, something which apparently is disliked by them (and million others) in the self-driving space:

https://www.popsci.com/self-driving-car-fleets

And today, a coalition of companies—including Lyft, Uber, and Zipcar—officially announced that they were signing on to a 10-point set of “shared mobility principles for livable cities”........that autonomous vehicles (AVs) in dense urban areas should be operated only in shared fleets.”

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#15

Post by UncleEntity »

moduspol wrote: post #9
emodendroket wrote: post #4

Earlier quoted context omitted.

Probably not great, but what if the model of both businesses just isn't actually viable without massive injections of funds?

Then apparently it is impossible to run a SaaS app connecting drivers and passengers for a ~25% cut of current prices. That seems pretty unlikely. We need to move on from this unsupportable "ride sharing pricing is unsustainable" narrative.

Unsupportable for the drivers or the company?

A driver tears up their car there's a ton of people to replace them but that isn't very supportable on the individual level.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#16

Post by emodendroket »

clairity wrote: post #11
hari_seldon_ wrote: post #7

Earlier quoted context omitted.

Agreed. The dominant strategy seems to be to undercut competitors until they are driven out of business, and then you can raise prices. However, raising prices then gives opportunity for a new ride-sharing service to come in and say that they can compete by offering lower prices for a period of time...

yes, that's how capitalism is designed to work. the window in which you can make outsized profits is meant to be temporary so companies can't just rest on their laurels. it's beautiful when it works.

That's not really how it's "supposed to" work. It's called predatory pricing and the most ardent free-market defenders claim it doesn't exist because it's economically irrational (check out the contentious discussion and Frankenstein-like text of the Wikipedia entry on the topic).

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#17

Post by emodendroket »

thisisit wrote: post #14
emodendroket wrote: post #5

Earlier quoted context omitted.

Well, the idea is that they kill off every competing service and then can raise prices. Also that they can beat everyone else to self-driving cars and eliminate the cost of labor. Other articles on NC have called the feasibility of both of those into question.

> Also that they can beat everyone else to self-driving cars and eliminate the cost of labor. Or ask for regulations, something which apparently is disliked by them (and million others) in the self-driving space: https://www.popsci.com/self-driving-car-fleets And today, a coalition of companies—including Lyft, Uber, and Zipcar—officially announced that they were signing on to a 10-point set of “shared mobility princi…

Uber seeking to use regulation to shut out competitors is rich.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#18

Post by [deleted] »

Animats wrote: post #10

"Uber released new financial data this week, showing full year 2017 GAAP operating losses of $4.5 billion, and an operating margin of negative 61%." Finally, Generally Accepted Accounting Principles numbers from Uber. And they're awful. Lots of startups whine about having to produce GAAP numbers (all US public companies have to) because they can't exclude "extraordinary expenses". But GAAP numbers are real, not "earn…

[deleted]

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#19

Post by emodendroket »

moduspol wrote: post #9
emodendroket wrote: post #4

Earlier quoted context omitted.

Probably not great, but what if the model of both businesses just isn't actually viable without massive injections of funds?

Then apparently it is impossible to run a SaaS app connecting drivers and passengers for a ~25% cut of current prices. That seems pretty unlikely. We need to move on from this unsupportable "ride sharing pricing is unsustainable" narrative.

I don't think I follow. There's nothing impossible about running a livery service with a cell phone application for hailing, but I don't think current prices are sustainable. It is not a business with substantial economies of sale.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#20

Post by EpicEng »

clairity wrote: post #11
hari_seldon_ wrote: post #7

Earlier quoted context omitted.

Agreed. The dominant strategy seems to be to undercut competitors until they are driven out of business, and then you can raise prices. However, raising prices then gives opportunity for a new ride-sharing service to come in and say that they can compete by offering lower prices for a period of time...

yes, that's how capitalism is designed to work. the window in which you can make outsized profits is meant to be temporary so companies can't just rest on their laurels. it's beautiful when it works.

Capitalism is not "supposed to be" a race to the bottom and then the emergence of a single, monopolistic entity. That's far too simplistic. Price and value are a huge component of capitalism, yes, but the general idea isn't "price below what is sustainable by taking in massive amounts of funding until all of your competitors are sunk and then increase prices."
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