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Uber Lays Off 400

nytimes.com

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Re: Uber Lays Off 400

#121

Post by user5994461 »

aresant wrote: post #42
codingdave wrote: post #18

> The marketing team had more than 1,200... I fully admit that I'm not in marketing, so there are surely nuances I don't know. But that scale of marketing department is orders of magnitude above any other place I have worked, with the possible exception of IBM in the 90s. Just maybe... this was a reasonable move.

Uber's marketing / customer acquisition cost is their highest non-driver line item by a significant multiple. They spent ~$3,200,000,000 ($3.2 billion) on sales & marketing in 2018 of which ~$1,800,000,000 is direct media / HR cost to drive customer acquisition. In 2019 this number, as of the first quarter, has gone up substantially to a >$4b run rate. With a burdened cost of $150k/yr for every single member of the 1…

Just fire half of them to save half the money.

Marketing has large budgets to spend (multiple of their salaries) on marketing campaigns. They're usually incentivized to spend as much as possible on whichever marketing campaign they can come up with, with little accountability on whether it brings any ROI.

It's the equivalent of software engineers wanting to use the latest tools for resume building, no matter the situation. The difference is that marketing lives on spending money, hence cutting headcount there has a big multiplier on cost savings.

Re: Uber Lays Off 400

#122

Post by sbarre »

rsp1984 wrote: post #110

Can someone with insight into the matter explain, from a high level, what the big concerns are over Ubers ability to run profitably? In my naive view they are "just running an app" / acting as a mobility marketplace and they make money on each transaction. Given the traction and market dominance they have this sounds like a really attractive business. So how do they manage to run such big losses every year and which…

Literally read the rest of the comments in this thread and that should give you a lot of additional information.

Re: Uber Lays Off 400

#123

Post by cosmodisk »

bduerst wrote: post #119
mevile wrote: post #74

Earlier quoted context omitted.

Pizza delivery is profitable. Pizza comes in a shape easy for transportation, the size and value of the delivery is economical for a delivery business and there's an established culture around ordering pizza for delivery. The food delivery companies just need to figure out these problems, which a hard, for non-pizza foods.

Is it though? Most pizza delivery is an ancillary service to the restaurant itself. Are there very many profitable pizza-delivery only businesses? Also you could argue that for the genre of restaurants where delivery is profitable as an ancillary service (pizza, chinese, etc.), they already offer delivery and there isn't any profitable market for the restaurants where they didn't have it before.

It's not profitable because every single restaurant does it for itself only.A post office service would never make a dime if it was only covering a small town.Scale it up to the entire city and it becomes very interesting

Re: Uber Lays Off 400

#124

Post by SilasX »

nabla9 wrote: post #115
SilasX wrote: post #63

Earlier quoted context omitted.

Echoing twic's disbelief here. A quick googling turned up Coca-Cola's global advertising budget as being $4 billion/year [1]. >Coca-Cola has made a yearly commitment to large ad spends. In 2017, the beverage manufacturer spent $3.96 billion, in 2016, $4 billion, and in 2015 $3.96 billion on global advertising. But I'm not sure if that's a comparable figure, as "advertising" is only a subset of "marketing". Still, if…

Uber blew as much as $3.2 billion on advertising alone in 2018 on its way to one of the biggest US IPOs on record https://www.businessinsider.com/uber-shelled-out-31-billion-...

Yes, I joined the thread in response to a comment that cited the $3.2B/2018 figure.

Re: Uber Lays Off 400

#125

Post by aianus »

jcims wrote: post #98
Scoundreller wrote: post #91

Earlier quoted context omitted.

There's a network effect component for shared/pooled rides. Upstarts will lose a lot if they offer shared prices without matched riders.

Do that many people share rides with strangers in Uber? I never have.

I can tell you that as a driver, about ~25% of my ride requests in Toronto are Pool requests.

We also have Express Pool where you get picked up / dropped off at some walkable distance from your actual origin/destination to make it even cheaper for the consumer and more efficient for drivers.

At one point Uber was even competing with the bus / streetcar with a special ride type where you would have to be picked up or dropped off at specific points along one street but they discontinued this.

I would definitely consider these sorts of shared rides as a moat.

Re: Uber Lays Off 400

#126

Post by cortesoft »

dalbasal wrote: post #64
codingdave wrote: post #18

> The marketing team had more than 1,200... I fully admit that I'm not in marketing, so there are surely nuances I don't know. But that scale of marketing department is orders of magnitude above any other place I have worked, with the possible exception of IBM in the 90s. Just maybe... this was a reasonable move.

Since we're talking about tech startup marketing budgets, it's a good time to reread http://www.paulgraham.com/yahoo.html By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more r…

Makes me think of my days working on a facebook app in 2007-8... every single app had the same revenue stream - selling installs to other apps. The price per install was crazy high, and this was before Facebook started enforcing rules about shady practices, so every app would do things like "Install this other app, and we give you these perks in our app"

It was ridiculous. There was no real money, just app developers paying each other for installs.

Re: Uber Lays Off 400

#127

Post by crispyporkbites »

dvt wrote: post #3

When I was at Edmunds (working on a fairly profitable ad tech product), Uber was actively poaching from our team; a few ex-coworkers (albeit mostly engineers) moved up to SF and hopefully they didn't get axed. We can chalk this up to "business as usual," but let's not forget people's livelihoods are at stake.

If your CV has marketing @ Uber on it, I doubt your livelihood is going anywhere

Re: Uber Lays Off 400

#128

Post by gridlockd »

noego wrote: post #70
codingdave wrote: post #18

> The marketing team had more than 1,200... I fully admit that I'm not in marketing, so there are surely nuances I don't know. But that scale of marketing department is orders of magnitude above any other place I have worked, with the possible exception of IBM in the 90s. Just maybe... this was a reasonable move.

Your comment reminds me of something Dan Luu had written about. https://danluu.com/sounds-easy/ > I can't think of a single large software company that doesn't regularly draw internet comments of the form “What do all the employees do?" Granted he's mostly talking about engineers, but I'm sure someone more knowledgable about marketing could write an almost identical essay.

Up to a point these arguments make sense, after that the much better explanation is Parkinson's Law.

Of course all these employees are doing something. People will always invent more unnecessary work if the budget is there.

If the budget isn't there, the unnecessary work just isn't done and nobody notices.

Re: Uber Lays Off 400

#129

Post by ryguytilidie »

codingdave wrote: post #18

> The marketing team had more than 1,200... I fully admit that I'm not in marketing, so there are surely nuances I don't know. But that scale of marketing department is orders of magnitude above any other place I have worked, with the possible exception of IBM in the 90s. Just maybe... this was a reasonable move.

I do recruiting and I had a client tell me they wanted a Design Manager from a specific set of companies. This included Uber. When I looked at how many Design Managers Uber had, I was blown away. I remember them having 50+. Seemed crazy.

Re: Uber Lays Off 400

#130

Post by paulcole »

bduerst wrote: post #119
mevile wrote: post #74

Earlier quoted context omitted.

Pizza delivery is profitable. Pizza comes in a shape easy for transportation, the size and value of the delivery is economical for a delivery business and there's an established culture around ordering pizza for delivery. The food delivery companies just need to figure out these problems, which a hard, for non-pizza foods.

Is it though? Most pizza delivery is an ancillary service to the restaurant itself. Are there very many profitable pizza-delivery only businesses? Also you could argue that for the genre of restaurants where delivery is profitable as an ancillary service (pizza, chinese, etc.), they already offer delivery and there isn't any profitable market for the restaurants where they didn't have it before.

> Most pizza delivery is an ancillary service to the restaurant itself.

Are you sure? Seems like the restaurant mostly exists for marketing, awareness, and as a place for people to not come in and eat.

90% of Pizza Hut’s orders are deliveries. 65% of Domino’s are deliveries. Over the entire industry, carry-out and delivery account for over 75% of revenue (delivery alone is 30% or so).

• https://www.cnbc.com/2018/12/05/pizza-hut-execs-dissatisfied...

• https://www.reuters.com/article/us-dominos-pizza-delivery/do...

• https://www.statista.com/topics/1610/pizza-delivery-market/

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