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Uber Revenue Slows as Quarterly Loss Surges to $1.1B

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Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#311

Post by rorykoehler »

keeptrying wrote: post #278
ChuckMcM wrote: post #58

That is not a happy balance sheet. They have raised over $24B, then they shifted around the cap table when Soft Bank came in[1] where they valued the company at $48B. I have never played poker where the lowest valued chips were a million dollars but it has to feel like that to senior management at the company right? And their investors, they have serious money in the pot too. It feels like they have managed to create…

True “too big to fail” has an element of regulatory capture. These guys definitely aren’t there yet. If Waymo’s launch is even half successful there’s going to be a mass exodus from Uber I think. Their cash comp is the lowest in the industry.

Too big to fail can also be having a well capitalised investor like Softbank in a multi-trillion dollar future market. Uber is right there at the sweet spot.

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#312

Post by spookthesunset »

anigbrowl wrote: post #281
spookthesunset wrote: post #196

Earlier quoted context omitted.

> Why are you inventing new facts to rationalize this practice? The driver being nice and wanting to contact the driver is cool at a small scale but at a large scale with millions(?) of trips per day, that sort of casual niceness doesn't scale at all. At scale, you run into all the questions asked by the parent. You have to address the "oh shit, I need to get/give something back" issue in a more systemic, scalable wa…

You ignored the rest of my comment, which was not in any case addressed to you.

This is a public forum. Anybody can reply to you. In fact, that’s the whole point.

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#313

Post by elhudy »

blawson wrote: post #157
elhudy wrote: post #32

Earlier quoted context omitted.

Uber's new "cheap" pool option forces you to walk up to 5 blocks (!!) and is the same price that it used to be. Lyft's pool option doesn't make you walk and the prices have remained unchanged. Uber lost all of my (bi-daily) business when they moved to the pool express business model.

Interesting! That’s new to me, and honestly a benefit in places like SF, where dropping someone off or picking someone up at a specific address might involve numerous annoying loops / turns around one way streets, where the passenger could just make everyone else’s life easier and walk a block or two. This feels like a positive change as long as weather isn’t a huge concern.

An issue with this, from a greedy consumer perspective, is that it allows the app more time to get you to your destination. If I do an uber pool express, the time saved from walking doesn't credit to my day; that time is used to pick up more and further passengers, and introduces further room for driver error.

With old-pool, the driver did have to make more loops to get to me, which lowered the available time to get to my destination (as per the estimated arrival time provided by the app). Due to the tighter timeline, I typically arrived at my destination quicker and with fewer pickups.

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#314

Post by crunchlibrarian »

asteli wrote: post #20
crunchlibrarian wrote: post #3

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.

In finance the actual growth rate is rarely looked at that much, but the rate of change of the growth rate is scrutinized to the nth degree.

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#315

Post by albertgoeswoof »

moorhosj wrote: post #119
albertgoeswoof wrote: post #93

Earlier quoted context omitted.

2 potential fixes on the rider side: - Uber prime - Uber points

To attract users to these services, would Uber have to take a further hit to profitability? It seems they would in order to make customers lock themselves in.

Does amazon lose money on prime?

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#316

Post by philipodonnell »

richardknop wrote: post #280
ChuckMcM wrote: post #163

Earlier quoted context omitted.

Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. Of course the employees are also victims. I have been in the situation of holding untradeable (by me) stock being valued a high number (woohoo! I'm rich) only to watch helplessly as it became worthless (uh, I'm not rich). While the value of things chang…

> Critically though it isn't retail investors who would bear the cost of a failure, that would be born by the folks like Softbank and the hedge funds who have invested. This is highly optimistic. A failure of a big startup such as Uber could easily start a chain reaction, failure of other similar big unicorns, perhaps steep losses in stock market, spreading panic etc. It could easily could get to a point when governm…

Nah. The irony is that while staying private, being combative with governments and relying on independent contractors to operate their business allowed them to reach this size, it also prevents them from having any leverage to ask for a bailout. No jobs to save. No retail investors to protect. No switching costs. No feel-good story for a politician to get behind.

If Uber fails it'll get parceled up by the remaining players in a heartbeat, either by selling parts of itself (at best) or everyone just switching.

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#317

Post by slivym »

tompetry wrote: post #249

There is always an "Uber is dead" sentiment floating around when losses come out, but I don't buy it. The long term on-demand transportation opportunity is absolutely massive. Uber has tried to win the land grab and "outlast" everybody with obviously unsustainable subsidies, and maybe that didn't exactly work out. But if the economics don't work for Uber, they won't work for anybody else at scale either. Consumers ar…

The business model appears to be to get established and then use a combination of network effects and monopolistic pricing techniques to be profitable. The problem is though, you need to establish yourself as the dominant player, and jack up prices to start being profitable. That's a fine business strategy. The problem is that Uber has an outside clock ticking. The first player to economically produce a fleet of self-driving cars is likely to undercut Uber on price so violently that Uber's business model goes up in smoke pretty quick.

So either Uber wins the race to autonomous vehicles (which I think most people now regard as unlikely) or they have a hard limit on when their profitability is going to go away. So the valuation needs to reflect something along the lines of "How much money can uber make between now and 2025" and every year that goes by without profit, is a year towards the day that uber's business model goes poof!

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#318

Post by moorhosj »

albertgoeswoof wrote: post #315
moorhosj wrote: post #119

Earlier quoted context omitted.

To attract users to these services, would Uber have to take a further hit to profitability? It seems they would in order to make customers lock themselves in.

Does amazon lose money on prime?

I'm not sure. We would need to add up the costs of free shipping, unlimited photo storage, licensing of 3rd party video content, creating 1st party video content, licensing music content, free 6-month Washington Post subscription, Whole Foods discounts, free eBooks, free games and more. [1]

They also don't have a direct competitor/s like Uber. I think the better comparison would be the loyalty programs from United or American.

[1] https://www.cnet.com/how-to/amazon-prime-20-benefits-every-m...

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#319

Post by mxstbr »

sseveran wrote: post #208
zhobbs wrote: post #88

Earlier quoted context omitted.

Agree that the lock-in is weak compared to other markets. Their strategy has been to incentivize drivers and riders to not split usage between other apps. Uber drivers who do a certain number of hours or rides per day/week often get bonuses, so they'd have to forego these bonuses to split time with Lyft. On the rider side, they're pulling a play from the airline playbook, with their version of frequent flier miles an…

I have often compared Uber to the airlines and not in kind way. There is simply no loyalty. I am skeptical that the airline frequent flier model will work. I predominately use Delta for international travel because of Delta One, but will probably switch to United when the 767 and 777 retrofit to Polaris is complete. I prefer United because I live in SF and there are more good flights from here. I don't know what Uber…

Wouldn't "business class" for Uber be UberBlack, compared to Uber X as "economy"?

Re: Uber Revenue Slows as Quarterly Loss Surges to $1.1B

#320

Post by thr0waway392 »

toomuchtodo wrote: post #296
tompetry wrote: post #249

There is always an "Uber is dead" sentiment floating around when losses come out, but I don't buy it. The long term on-demand transportation opportunity is absolutely massive. Uber has tried to win the land grab and "outlast" everybody with obviously unsustainable subsidies, and maybe that didn't exactly work out. But if the economics don't work for Uber, they won't work for anybody else at scale either. Consumers ar…

> But if the economics don't work for Uber, they won't work for anybody else at scale either. Uber has no other profit center to prop it up. Everyone else has profitable businesses to lean on (Tesla, Waymo) or corporate backing (Lyft through GM) until they get to the finish line. If you bet on Uber as an investment, you bet on the wrong horse.

Says the guy who owns Tesla shares and always talks about Uber being terrible in every Uber thread. Basically, you make these posts because it's the only company that worries you because it threatens your financial position.
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