With all of the ride sharing companies burning money it seems like the real bet here is being the last one standing. If Lyft folds, Uber will have much more leverage to play with the margins.
Can Uber ever make money?
61–70 of 430 posts
Re: Can Uber ever make money?
#62Earlier quoted context omitted.
Uber drivers use their cars for stuff other than Uber. It's a way to make additional money from something you already have. That would not be the case if Uber had its own fleet.
Why couldn't the same logic work in the post-self-driving future? If I own a self-driving car that sits in my garage from 8 PM to 8 AM, why not just put it on the Uber network and have it make money while I sleep? As long as people still own cars, why does Uber ever need to own their own fleet? If anything without the actual pain-in-the-ass of actually having to be a driver, I'd think a lot more people would crowdsou…
If a lot of people did that, I'd expect payments to drop to somewhere around the marginal cost of operating the vehicle which is mostly mileage-based. Or below because there's no shortage of people who need money now even if they realize they're basically borrowing money from their future self.
Re: Can Uber ever make money?
#63I can only see them making money in three ways : - They scale up massively and capture a huge fraction of the ride sharing market, thus allowing them to offer low cost / low margin rides, but making up for it by volumes : At least in India, they are in a good position, but they seem to have conceded the other markets with high potential for growth like SE Asia and China. - They have a premium offering that is actuall…
Option 4: sell your ride data to a 3rd party. Knowing who you are, where you travel to, what's around those areas. They - or a 3rd party - could advertise what's in the area you were taken to, track where you frequent and recommend riding to places you haven't been to in a while showing you what's "new" in those areas, etc.
I don't Uber (and have only used Lyft once), so maybe they already do this or are planning to.
Re: Can Uber ever make money?
#64Earlier quoted context omitted.
People are willing to pay to get driven around for relatively short distances on-demand so I'm not sure why that's an inherently unprofitable business. I assume many taxi companies and black car companies make money. What's probably true is that they probably have to raise prices and deal with decreased volumes in at least many markets to do so--and probably grow more organically. And it won't be the kind of profitab…
I can imagine that running a taxi company might be a lot like running an airline (a notoriously money losing business). Four out of five of Porter's five forces are working against you: - relatively easy for new entrants to enter the market - lots of consumer substitutes - lots of customer buying power - lots of competition
Historically, the market was regulated to prevent new entrants from entering the market and preventing competition. In NYC, this was a hard limit on the number of taxis with every taxi requiring a medallion. In suburban towns, taxi companies typically need to be licensed by the town and some towns have limited the number of companies or total taxis.
Uber really disrupted that as it rolled out across the US and other countries by basically rolling out illegally and then getting customer support to change laws.
Re: Can Uber ever make money?
#65Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.
I can't fathom how. If you maintain a fleet of thousands of driverless cars, there are at least some economies of scale you can leverage: More negotiating power with your suppliers, the ability to purchase consumables like fuel and tires at wholesale prices, the ability to have your own in-house team of mechanics who can specialize in just your fleet, etc. If you crowdsource it, a lot of that stuff is going to have t…
> You might be able to hide from that by capitalizing on some information asymmetry, by paying the people you crowdsource cars from less money than it's costing them to let you use their cars
People are notoriously bad at properly pricing the depreciation of their cars.
Re: Can Uber ever make money?
#66Uber prints money on non-pool rides in mature markets. The losses are all going to fund expansion and single-rider pools.
source?
https://www.sec.gov/Archives/edgar/data/1543151/000119312519...
$940 million in Contribution Profit in 2018 and that does not net out new markets and non-pool rides.
So, to re-affirm more emphatically, Uber prints money on non-pool rides in mature markets.
Re: Can Uber ever make money?
#67There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor…
Uber had $940 million in Contribution Profit in 2018. It prints money on non-pool rides in mature markets.
Re: Can Uber ever make money?
#68Earlier quoted context omitted.
The drivers may not make enough money: https://www.ridester.com/how-much-do-uber-drivers-make/#2 As a general rule, drivers should devote 20% of their earnings to insurance, maintenance, gas, and repairs. When this is accounted for, the average Uber driver earnings are barely above the poverty line.
Right, but with an AI driver all of those earnings that put a human slightly above the poverty line go into Uber's pocket.
That's only if maintenance costs are the same (I'm assuming they won't be). I assume there will be much higher vandalism costs and some other costs that are new to owning a car.
Re: Can Uber ever make money?
#69I'm not quite sure everyone discussing this, including the economist article author, is in the loop with why Lyft and Uber are getting valued the way they are. Wall Street is not paying for a taxi company, they are betting that Uber and Lyft are the best poised to first rollout driverless ride sharing, i.e. one of them will own and monopolize patentable tech that the mass public wants to use. The existing experience…
Driverless ride sharing isn’t coming, in a meaningful way*, in the next ten years, I’m willing to bet my house on that. Meaningful such that it actually delivers monetarily
We absolutely can make some bets if you are serious.
Re: Can Uber ever make money?
#70Earlier quoted context omitted.
Saying that we're going to work to dominate a low-margin sector at a staggering loss for years, so that we can enter an even lower-margin established industry and recoup our losses there, is a gutsy proposition.
Sure is. But remember, that playbook's almost exactly how Amazon became the largest company in the world.
AWS lock-in is different from a taxi app.
Only a few players so far managed to respond to AWS in scale and offerings.
Lots of taxi companies have their own apps at this point.