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Can Uber ever make money?

economist.com

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Re: Can Uber ever make money?

#191

Post by arcticfox »

nsxwolf wrote: post #187

Uber might make sense as a public utility. If it's going to lose money no matter what, why not fund it like public transportation? Lots of taxes on the back end offset by user fees to take some of the sting off and mitigate overuse.

> If it's going to lose money no matter what, why not fund it like public transportation?

Why would we as a society care if Uber exists enough to socialize the cost of it? I kind of like using Uber, but probably not enough to justify footing the full bill for it (thank you VCs).

Re: Can Uber ever make money?

#192

Post by sonnyblarney »

skywhopper wrote: post #15

There 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…

Yes, there is literally a way to make money.

Assuming you can get everyone to adhere to regulations etc..

Then Uber could be seen as a marketplace connecting drivers and riders - and there is material value in that.

And it doesn't have to be a lot for Uber to make money.

Not $100B valuation money, but money.

And there are de-facto network effects, brand etc. that play into that.

Lyft and Uber might not be worth their valuation, but there's value add there.

Re: Can Uber ever make money?

#193

Post by seltzered_ »

IanCal wrote: post #175
parksy wrote: post #58

Earlier quoted context omitted.

But in a way, that's the beauty of disruptive use of technology. Without the innovation of the Uber app, the traditional taxi cartels would have no incentive to improve their services and the fact that they have been forced to do so in order to compete benefits the consumer. They're not quite there yet, and are still catching up. The next logical step is a lift aggregation service that creates a marketplace. I want a…

> Without the innovation of the Uber app, I had local services with an app before Uber, I'm sure. It's really not much of a shift from a phone call either. But then, all Uber cars are the same as private hire cans anyway here. It seems like the real innovation was being big enough to ignore the local rules. That and being able to say it's "ride sharing" with a straight face.

I'm critical of U/L, but it's ignorant to say there hasn't been any innovation.

Back then, you had to know the phone number to call - I'd try to be diligent about keeping a taxi number in my contact list but it's invalid when I really need it when traveling in a different city.

Trying to hail a cab during a busy holiday? Good luck with that - cab splitting existed but nowhere near as frictionless as through apps + route-planning software. Plus phone calls usually didn't make it to the dispatcher during extremely busy times (walking out of a bar on new years).

Waiting for the cab? Better stay put where you are since they can't see your live location.

Re: Can Uber ever make money?

#195

Post by dewitt »

monsieurbanana wrote: post #184
IanCal wrote: post #175

Earlier quoted context omitted.

> Without the innovation of the Uber app, I had local services with an app before Uber, I'm sure. It's really not much of a shift from a phone call either. But then, all Uber cars are the same as private hire cans anyway here. It seems like the real innovation was being big enough to ignore the local rules. That and being able to say it's "ride sharing" with a straight face.

Hacker News about Dropbox (2007): "For a Linux user, you can already build such a system yourself quite trivially by getting an FTP account, mounting it locally with curlftpfs, and then using SVN or CVS on the mounted filesystem" Hacker News about Uber (2019): "It's really not much of a shift from a phone call either"

Hasn't Dropbox lost market value every quarter since they went public while growth has been flat and operating at a loss?

I'm not saying the HN crowd didn't miss a $10B opportunity, but they also weren't exactly wrong.

Re: Can Uber ever make money?

#196

Post by sonnyblarney »

bryanlarsen wrote: post #37
TuringNYC wrote: post #29

Earlier quoted context omitted.

>> There 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. I dont understand this comment. Traditional taxis made money for generations, why cant Uber? If anything, Uber has more advantages. EVEN: Traditional taxis had the "rent" of medallions. Uber has t…

Taxis made money because the medallion situation limited competition, and because fare prices were fixed by the city at levels that ensured a profit.

Taxis (drivers) don't make money, or rather, they are subjected to the same degree of commoditization either way.

Medallion owners make money. All of the profits are extracted into the medallions.

It's actually a bad system, really.

'Driving a taxi' is a total commodity, there's a limitless supply of people willing to do it for sub minimum wage, so the money just goes to the owners.

Rent extraction is usually a bad way to manage things; it's kind of like real-estate speculation, but there's no need for it.

It'd be nice to see the cities embrace Uber-like systems, capture the profits from it, enforce basic laws, and somehow make it fair. I'm not holding my breath.

Re: Can Uber ever make money?

#198

Post by acdha »

dcolkitt wrote: post #60
idlewords wrote: post #45

Earlier 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.

Amazon was making real profits in each line of business shortly after entering - 1-2 years for books, music, etc. IIRC. They chose to reinvest that in further expansion but always had the option of halting expansion and being fully profitable if they wanted.

Uber has nothing remotely like that and, unlike Amazon, their costs scale linearly and their workers (who are most of the business) have no reason to be loyal.

Re: Can Uber ever make money?

#199

Post by sonnyblarney »

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…

Most 'small businesses' are not startups. Far from it.

They are shops, restaurants, contractors, accountants.

Even most 'big companies' are just small one's that grew into something. Starbucks, H&M, IKEA. They were never the kind of 'entrepreneurial' in the Valley/Startup sense.

It's why VC/Valley is so focused on tech because there are inherent multipliers.

Uber and WeWork are providing a value add. Both of them have upped the game in some way. Yes - the funding bubble distorts everything miserably but that doesn't take away from the fact that people want cheap and fast rides, and they want cool places to work.

Re: Can Uber ever make money?

#200

Post by swarnie_ »

m_ke wrote: post #61

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.

This is basically it.

I have a choice between 4 services in my city. I pick the cheapest one whenever i want to go somewhere (Thanks VC cash burn)

Last man standing gets the monopoly.

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