Uber Lays Off 400 • Hacker News Board

Re: Uber Lays Off 400

#141

Post by sarah180 » Mon, Jul 29, 2019, 10:17 PM UTC

quickthrower2 wrote: post #105

Bootwizard wrote: post #15

Does anyone have any idea why Uber isn't profitable? I never really understood that. It's such a ubiquitous service in a large portion of the world. It seems to me that they have a lot of physical growth, so what is happening to their finances?

Drug dealers have been known to sell drugs to someone new cheap (perhaps at a loss) to get them hooked, and then once they are hooked jack the price up. Uber is trying to do that with transport.

Do you have a cite for that? I'm skeptical that there are a lot of "I don't know you, have some free drugs" organized loss-leader operations happening.

I suspect this is actually mostly propaganda and exaggeration, and that the actual practice—to the extent it exists—is more like offering a small sample to a well-known existing customer.

Re: Uber Lays Off 400

#142

Post by cpeterso » Mon, Jul 29, 2019, 10:17 PM UTC

quickthrower2 wrote: post #100

smallgovt wrote: post #37

Earlier quoted context omitted.

I can understand why every new market requires an operations team on the ground, but marketing ought to be centralized.

I'm not sure. There is a big billboard ad here in Sydney, which seems to be coordinated with a radio and online marketing campaign, around saying how 'safe' Uber is. Could campaigns like this all around the world be centralized into a smaller team?

A small centralized team will have a challenge trying to coordinate billboard, radio, and online ad campaigns in dozens of cities in dozens of countries. There will be different language, culture, legal, and logistical issues in every market.

Re: Uber Lays Off 400

#143

Post by user5994461 » Mon, Jul 29, 2019, 10:18 PM UTC

b_tterc_p wrote: post #65

davinic wrote: post #48

Earlier quoted context omitted.

Why would they care about self-driving if most of their drivers are making little more than the cost of operating their vehicle?

Semantics. Cars don’t cost that much to operate. Uber doesn’t cost that much. The portion going to the human take home pay minus car value depreciation and other expenses is small, but a substantial chunk of it.

Cars cost a huge amount of money upfront and require a tremendous amount of maintenance to operate, and that's before we get into insurance and accidents.

Right now, all of these are fully on the drivers. This will turn around if Uber rolls self-driving cars worldwide.

Re: Uber Lays Off 400

#144

Post by squarite » Mon, Jul 29, 2019, 10:18 PM UTC

Well if any of those 400 are in SF/NY, and are reading this, we're hiring for a marketing manager for my team at Square! PM me or apply here: https://www.smartrecruiters.com/Square/743999690593237

Re: Uber Lays Off 400

#145

Post by sundvor » Mon, Jul 29, 2019, 10:19 PM UTC

MetalGuru wrote: post #83

aresant wrote: post #58

Earlier quoted context omitted.

Yep - $3.2b is the headline cost of sales and marketing in 2018. In 2019 that number as of Q1 has shot up to a $4b+ run rate: https://investor.uber.com/news-events/news/press-release-det... - - Even more interesting in that number. The accounting department came up with a nice way to mask their "unprofitable rides" and call them "customer discounts". This is the line item for costs where they pay a driver more than t…

What’s your take on the sustainability of these subsidized rides? Will drivers still drive if this incentive is taken away? What are some of your favorite interesting insights from that data?

It sounds like prices should be higher. They sure appear unsubsidized in Australia.

Re: Uber Lays Off 400

#146

Post by johnpowell » Mon, Jul 29, 2019, 10:20 PM UTC

ghaff wrote: post #114

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.

Well, Chinese food is also a commonly delivered item in many places--including but not limited to cities. So I'm not sure pizza is all that unique. That said, a lot of food delivery is some high school kid driving his car around mostly working for tips. You start tacking on the costs of a large delivery-as-a-service company and your costs go up a lot without all that much economy of scale.

Even at a busy Pizza Hut a lot of the delivery drivers will help with making the pizzas, folding the boxes, and cleaning when not delivering. You can pay them X amount with fixed hours and they can stay busy the entire time.

With just delivery services there is a lot of standing around time.

Re: Uber Lays Off 400

#147

Post by grecy » Mon, Jul 29, 2019, 10:20 PM UTC

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.

Marketing runs the world now, because we've reached a point where companies really, really have to convince people to spend their money on whatever useless product is being pushed.

Ever notice there isn't marketing for potatoes, bread, rice, etc. ? People buy those things anyway. The latest smartphone? gotta convince everyone to buy it.

At my last company engineering spent $10m installing fiber into some remote community. The marketing for that project was $15m.

So the marketing around "doing something" costs more than actually doing it.

Re: Uber Lays Off 400

#148

Post by TrackerFF » Mon, Jul 29, 2019, 10:21 PM UTC

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…

Right now I would assume uncertainty being one huge risk. They have so many laws to follow, and to some certain get around - I wouldn't be surprised if they have teams of high-$$$ lawyers (on retainer) in every single country they're operating in, and probably lobbyists too.

Then there's local competition. Most countries have their own uber-like startups, which may be competitive in other areas.

And as others have mentioned, this business model doesn't scale very well. For every new country they enter, they have to hire new teams, do the marketing, put themselves into the laws of the land.

But I specifically think the law-aspect is the largest risk to them. One local ruling could basically wipe out their margins and business model, and essentially put their investments at a loss in said country.

It's not like they can enter a country with a 100% absence of established Taxi companies - wherever they go, and have gone, there have been opposition that's tried to get them classified as a regular taxi company.

Re: Uber Lays Off 400

#149

Post by paulcole » Mon, Jul 29, 2019, 10:22 PM UTC

bduerst wrote: post #139

paulcole wrote: post #130

Earlier quoted context omitted.

> 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/2018/12/0…

Is that really profitable though? Your article talks about how Pizza Hut is struggling as it switched to digital delivery. Also according your statista link, delivery only accounts for 30% of revenue in the pizza industry.

Your intuition is probably spot on. Dominos stock has been doing terribly and pizza delivery will likely cease to exist because it is a constant money loser.

Re: Uber Lays Off 400

#150

Post by H8crilA » Mon, Jul 29, 2019, 10:26 PM UTC

bduerst wrote: post #111

rolltiide wrote: post #14

Earlier quoted context omitted.

Well you can... the terminology is just different They’ll say “saudi investors bought into secondary offering at X share price” instead of “round completed at Y valuation!!!” Which is just X share price of last purchase multiplied by total shares in existence Public companies can do secondary offerings from treasury or from creating brand new shares from nothing (dilution) Liquidity is one of the benefits

But then what's the planned payout for those secondary investors? Liquidating on the market would plummet.

Companies do this all the time (issue new bonds or equity). There's really not much of a difference between public and private markets, in principle.

Planned payout is, and has been the same ever since limited liability companies were invented by humanity: excessive cash flows plus liquidation value of corporate assets at end of life. Hoping on anything else is speculation (nothing wrong with that, but it is just speculation, i.e. trying to sell to the greater fool).