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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#101

Post by ORioN63 »

dcolkitt wrote: post #26
TruthSHIFT wrote: post #7

Keep 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.

There's either two possibilities for the self-driving future. 1) Hardly anybody owns cars anymore. When we want to get from point A to point B, we just call a driverless car from the network. But this type of service is a natural monopoly. When people are ridesharing everywhere, the network with the biggest fleet, becomes the stochastically fastest and cheapest option. Plus add in the fact that they're collecting a l…

3) Is implemented in a socialist model. Government creates a public company behind it, provides some of the initial investment, privates provide the rest; prices maintain to help pay for it (+ private quota), even though costs were cut significantly; decrease/fluctuate prices over time to match costs (maintenance, fuel).

You got yourself a national fleet. Note, that my comment does not necessarily has the US in mind.

Re: Can Uber ever make money?

#102

Post by klaudius »

No. Relevant article by an expert:

  https://www.nakedcapitalism.com/2019/04/hubert-horan-can-uber-ever-deliver-part-nineteen-ubers-ipo-prospectus-overstates-its-2018-profit-improvement-by-5-billion.html

Re: Can Uber ever make money?

#103

Post by cortesoft »

JimboOmega wrote: post #78
rchaud wrote: post #74

Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every…

The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start…

> It's a really weird reality, because typically the worst kind of place to start a company is one with huge barriers to entry that requires a ton of money to get started. Yet that seems to have done quite well recently.

That is the case if a normal person is starting a business. However, for venture capitalists, it is different.

The asset they have is a ton of money, so they are looking for businesses where that provides them an advantage. They WANT to fund a business that requires a ton of money and has lots of barriers to entry, because that is their strength.

Re: Can Uber ever make money?

#104

Post by Marazan »

tjpaudio wrote: post #34

I'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…

Why would either be best placed to take advantage of driverless ride sharing?

Why do any of their curre t activities make you think that?

Re: Can Uber ever make money?

#105

Post by joncrane »

rchaud wrote: post #74

Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every…

Don't forget the other group of people who benefit: the users of the app.

Re: Can Uber ever make money?

#106

Post by jameslevy »

Traster wrote: post #98
JimboOmega wrote: post #78

Earlier quoted context omitted.

The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start…

I think that's a really interesting concept. People think Uber will reach a scale where either it can use automation to reduce costs or jack up prices. It may well be the other way around - as it matures regulations catch up and the loopholes it was using to keep costs down disappear and their costs slowly increase instead.

Places like NYC already show this in practice.

Re: Can Uber ever make money?

#107

Post by benj111 »

jandrese wrote: post #40
harryh wrote: post #31

Earlier quoted context omitted.

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

This is the conundrum of creating a better marketplace. An optimal market has 0 profit opportunities. In order to make money the market must be flawed in some way. Luckily in the real world perfect markets don't exist, but in certain sectors technology has made life difficult for people who had previously had a solid reliable income with the old inefficient system.

"An optimal market has 0 profit opportunities"

That doesn't quite right to me. A market with the smallest profit opportunity of a selection (say worse that government bonds) wouldn't see investment to correct that inefficiency. Zero may be 'best' case, practically speaking though no one's going to arbitrage an opportunity, that's less than the opportunity cost.

So it seems to me the optimal market would a profit opportunity somewhere between being the 2nd best profit opportunity and zero profit opportunity, depending what you set the opportunity cost at.

Re: Can Uber ever make money?

#108

Post by jv22222 »

JimboOmega wrote: post #78
rchaud wrote: post #74

Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every…

The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start…

> with huge barriers to entry that requires a ton of money to get started

Just a note that the proof of concept stage was very cheaply done. Travis hired someone to make an app and the "dispatch" system was just a single php page. He then tested it out with his friends.

That said, I agree that ultimately to get to the position they are today required a ton of cash - just the getting started was pretty cheap.

Actually we have the blow-by-blow of how it all played out on our podcast since Jason was employee #7 and built out the original node dispatch system.

http://techzinglive.com

I'm not sure exactly what show he started working on it, might need to go back to 95. Full show list here:

https://www.dropbox.com/sh/frnqzndys9j3vc1/P7jHgH0BQK

Re: Can Uber ever make money?

#109

Post by m3kw9 »

So UBER is just an more advanced cab company. You call a driver to drive you from A to B. It tries to under cut the traditional cab company significantly, and unfortunately that means a loss is needed until they can get rid of drivers using autonomous systems. At that time when it will also drive the cost down as they will Not be the only one with autonomous systems. It will look more like a commodity unless you are an monopoly

Re: Can Uber ever make money?

#110

Post by hammock »

jv22222 wrote: post #108
JimboOmega wrote: post #78

Earlier quoted context omitted.

The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start…

> with huge barriers to entry that requires a ton of money to get started Just a note that the proof of concept stage was very cheaply done. Travis hired someone to make an app and the "dispatch" system was just a single php page. He then tested it out with his friends. That said, I agree that ultimately to get to the position they are today required a ton of cash - just the getting started was pretty cheap. Actually…

Hustle recognize hustle but which podcast episode is it dude? There are 300+ eps at that link.
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