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Uber's been buying revenue at the cost of margin in at least two ways by shifting rides to Pool (where they can declare the entire ride's cost as revenue, not just their cut), and ramping up Uber Eats (where they take a percentage of the total cost of the food and may actually lose money on the ride). Neither strategy can continue indefinitely.
Uber lost all of my (bi-daily) business when they moved to the pool express business model.
Uber's been buying revenue at the cost of margin in at least two ways by shifting rides to Pool (where they can declare the entire ride's cost as revenue, not just their cut), and ramping up Uber Eats (where they take a percentage of the total cost of the food and may actually lose money on the ride). Neither strategy can continue indefinitely.
Is there a choice given other well funded startups are doing same (Lyft, Grab etc)?
Earlier quoted context omitted.
I don't know if I'd call it disgusting, price discrimination is a well established business practice, and your comment suggests that you continue to use Uber's service despite those practices — validating the discriminatory pricing they're giving you. It is your prerogative as a consumer to check multiple car hailing apps and pick the one that suits you best.
I'd sooner just catch a cab than have to open up multiple different apps and compare prices all the time. I always know exactly what I'm paying with a cab, and it's no hassle.
* Much lower quality cars (torn seats, smelly, old, safety issues...no one looks good showing up to a date in a Cab).
* Much lower quality drivers (some smoke openly, talk on the phone loudly, don't listen to you, take longer routes than necessary, etc)
* No accountability for service
* No trip data for safety reasons
* No handy log of all your recent trips
* More expensive + tip required
* Sometimes will pester you to be cash-only (even though the credit card machine works, they'll just lie to you)
* Ignore the law and will refuse to give you a ride if you're going to some specific destinations where they don't want to go.
I can go on and on. This is in most American cities. I will not take cabs even if they are cheaper.
Cabs deserve to be eliminated as a transportation option.
Uber’s sales are dramatically slowing even as the ride-hailing company is spending more to fuel global growth, particularly in its food delivery business. Revenue growth of 38 percent in the third quarter was almost half of what the growth rate was six months earlier, when the company was negotiating a $9.3 billion investment led by SoftBank Group Corp. Brutal opening paragraph
It's a strange world we live in when people speak poorly of 38% revenue growth. To me, that seems like a staggeringly huge growth rate. I looked up the numbers independently to double check, and yep. 63% revenue growth between Q2'17/Q2'18, 38% between Q3'17/Q3'18. If my own 9 year old company was growing 38% YOY I think I'd be very very happy.
Uber doesn't have much of a moat or lock-in effect. I just switched one day from being a frequent Uber rider to 100% using Lyft, simply because I don't like Uber's behavior as a company. The prices are so close it doesn't make any practical difference to me. Anecdotally, among my friends I also see Lyft becoming the default, and sometimes price-checking with Uber. If Waymo or whoever came out tomorrow with a cheaper/…
Edit: I stand corrected. Their UI mislead me because for airport rides the price is only shown after you hit a Confirm button, but that does not order the car as I thought, only takes you to the next screen.
Their burn just reflects a continued, aggressive customer acquisition strategy.
Side note, I'm getting fed up with Uber... I'm a decent user, I use it 1-2 a week. Drivers have become worse. They used to have clean cars and were of all ethnicity. There also used to be a lot of women drivers. Now it's basically taxi drivers with their mate's cars. Cars are now often dirty, greasy interiors, dirty outside and bad smell. And as soon as you have a 'usual' route, or you use the app a lot, you get char…
Uber’s sales are dramatically slowing even as the ride-hailing company is spending more to fuel global growth, particularly in its food delivery business. Revenue growth of 38 percent in the third quarter was almost half of what the growth rate was six months earlier, when the company was negotiating a $9.3 billion investment led by SoftBank Group Corp. Brutal opening paragraph
It's a strange world we live in when people speak poorly of 38% revenue growth. To me, that seems like a staggeringly huge growth rate. I looked up the numbers independently to double check, and yep. 63% revenue growth between Q2'17/Q2'18, 38% between Q3'17/Q3'18. If my own 9 year old company was growing 38% YOY I think I'd be very very happy.
I think this graph neatly summarizes the concern at this point. There are few signs that the business can live up to its existing hefty valuation, not-to-mention the even-loftier IPO expectations.
Amazon was also famously unprofitable as a public company for a long, long time. But they still had revenue growth rates worth investing in and potentially more defensible businesses.
I do wonder if the ride-sharing business will wind up like the airlines business: valuable, booming but very, very tough to consistently make large profits.
I suspect, like Amazon, Uber could be profitable any time it wants. Their burn just reflects a continued, aggressive customer acquisition strategy.