Uber Posts $5.2B Loss and Slowest Ever Growth Rate • Hacker News Board

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#61

Post by itake » Thu, Aug 08, 2019, 8:40 PM UTC

standardUser wrote: post #37

rainyMammoth wrote: post #8

Uber and lyft are both on the way down. The price at which they need to operate to be profitable is not a price that most americans are ready to pay. As simple as that. For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too exp…

The difference between taxi fares and Uber/Lyft fares has all but vanished. People were willing to pay taxi rates all along, now they are doing so and getting what is arguably a much better service.

I think what he is saying is the demand for Lyft / Uber was manufactured by low prices. Now that they are more expensive, people are using public transit more.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#62

Post by munk-a » Thu, Aug 08, 2019, 8:40 PM UTC

jcdavis wrote: post #30

munk-a wrote: post #10

Earlier quoted context omitted.

I am confused at how that 3.9B could be said not to matter - I'm not familiar with what precisely "recognition of stock comp" means, but I'm going to assume it was either squaring a previously deferred liability - or directly needing to pay out some sort of stock based compensation. Assuming the compensation was for a business need (like hiring labour or purchasing something necessary) then I don't see how that shoul…

You can break that question into 2 parts. First, the 3.9B figure appears to represents all RSUs vested up to this point, aka many years worth ("(2) Q2 2019 includes $3.9 billion of stock-based compensation expenses, primarily due to RSU expense recognition in connection with our initial public offering"). That's why its slightly misleading - its many years worth of stock comp for employees which is all getting recogn…

Ah thank you - yea it might not be directly coming out of the company as a cash expense but it certainly is depreciating the value of the company and considering that stock options of various types are often offered to supplement salaries (and let's just understand that nobody gives up money for free, so were these options not available they'd be paying higher labour costs) then it is logically an expense to the company by way of dilution to actually carry out their disbursement.

I am pretty personally wary of stock based compensation in non-publicly traded companies since it's a gamble that the employee is accepting that is entirely controlled by the company - bad business decisions can cut your compensation through no fault of your own if the company goes bankrupt.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#63

Post by sumeetjain » Thu, Aug 08, 2019, 8:40 PM UTC

izzydata wrote: post #33

bluetidepro wrote: post #19

Earlier quoted context omitted.

I can't speak to SF, but here in Chicago, they have been gradually getting higher each year. I have consistently taken an Uber to work every morning for about 5 years now, and I used to pay $5-7 for the ride, but now it is $9-12. I will say though, the huge benefit now is their rewards have a "price protection" [1] for some tiers that allow for a cap on that ride price, so I think it can no longer go above $10.99 or…

That seems more expensive than owning a car. Assuming 5 workdays a week and 2 rides per day then that is 40 rides a month on average which could be anywhere from $360 to $480 a month.

The economics can be interesting. For me to own a car means I have to pay $300/month anyways, just to be able to park it in my apartment building. After considering the cost of ownership (insurance, maintenance, gas, etc), I decided it wasn't worth it.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#64

Post by iamatworknow » Thu, Aug 08, 2019, 8:41 PM UTC

izzydata wrote: post #33

bluetidepro wrote: post #19

Earlier quoted context omitted.

I can't speak to SF, but here in Chicago, they have been gradually getting higher each year. I have consistently taken an Uber to work every morning for about 5 years now, and I used to pay $5-7 for the ride, but now it is $9-12. I will say though, the huge benefit now is their rewards have a "price protection" [1] for some tiers that allow for a cap on that ride price, so I think it can no longer go above $10.99 or…

That seems more expensive than owning a car. Assuming 5 workdays a week and 2 rides per day then that is 40 rides a month on average which could be anywhere from $360 to $480 a month.

You can get a lease on something like a Toyota Corolla with no money down and ~$250 per month. That plus gas plus maybe having to pay for a parking space would probably break even, if not save a little money. Not to mention any rides that aren't part of the commute.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#65

Post by toasterlovin » Thu, Aug 08, 2019, 8:41 PM UTC

arbuge wrote: post #4

jumelles wrote: post #3

> A majority of that [$5.2B] — about $3.9 billion — was caused by stock-based compensation that Uber paid its employees after its I.P.O. Excluding that one-time expense, Uber lost $1.3 billion, or nearly twice the $878 million that it lost a year earlier. Not exactly as bad as the headline makes it sound, but still bad. EDIT: Still very bad. Obviously!

It's bad all the way, including the $3.9 billion, which is a massive sum. As Warren Buffett says, "if stock-based compensation isn't an expense, what is it?".

Exactly. It’s just an expense that you get to ignore for the time being because it doesn’t affect cash flow.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#66

Post by hn_throwaway_99 » Thu, Aug 08, 2019, 8:41 PM UTC

standardUser wrote: post #37

rainyMammoth wrote: post #8

Uber and lyft are both on the way down. The price at which they need to operate to be profitable is not a price that most americans are ready to pay. As simple as that. For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too exp…

The difference between taxi fares and Uber/Lyft fares has all but vanished. People were willing to pay taxi rates all along, now they are doing so and getting what is arguably a much better service.

> People were willing to pay taxi rates all along

Baloney. The market size of people willing to pay taxi rates for transportation is much smaller that the market sizes currently implied by Uber and Lyft's valuation. Before Uber and Lyft, most people I know would only take taxis very occasionally, for special occasions or emergencies. Once Uber and Lyft started offering such good rates they would use ride sharing much more often.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#67

Post by cybersol » Thu, Aug 08, 2019, 8:41 PM UTC

izzydata wrote: post #33

bluetidepro wrote: post #19

Earlier quoted context omitted.

I can't speak to SF, but here in Chicago, they have been gradually getting higher each year. I have consistently taken an Uber to work every morning for about 5 years now, and I used to pay $5-7 for the ride, but now it is $9-12. I will say though, the huge benefit now is their rewards have a "price protection" [1] for some tiers that allow for a cap on that ride price, so I think it can no longer go above $10.99 or…

That seems more expensive than owning a car. Assuming 5 workdays a week and 2 rides per day then that is 40 rides a month on average which could be anywhere from $360 to $480 a month.

Parking spaces at both at home and work can easily be more than that in a major city. That is more limiting than even the car costs.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#68

Post by kn0where » Thu, Aug 08, 2019, 8:41 PM UTC

jonknee wrote: post #47

rainyMammoth wrote: post #8

Uber and lyft are both on the way down. The price at which they need to operate to be profitable is not a price that most americans are ready to pay. As simple as that. For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too exp…

I think it's more the massive amount of spending they do with little to nothing to show for it. They spent $457m last year on autonomous and flying cars with $0 in revenue from those projects. Maybe that will work out, but I bet every penny was ultimately wasted. Not spending billions a year on R&D certainly makes the financials look nicer. It might not attract as nice of a multiple, but it's not the ride prices that…

On the other hand, they spent $0.5 billion on R&D in a year, and lost $5 billion in a quarter, so I don’t think the R&D is nearly as significant an issue as subsidizing rides.

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#69

Post by darkwizard42 » Thu, Aug 08, 2019, 8:43 PM UTC

themagician wrote: post #49

rainyMammoth wrote: post #8

Uber and lyft are both on the way down. The price at which they need to operate to be profitable is not a price that most americans are ready to pay. As simple as that. For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too exp…

The service also turned to total shit. I took my first Uber in 2011. It was amazing. Expensive, to be sure, but the service was amazing. Black Sedan, extremely professional, shows up wherever you want, drops you off wherever you want, never really had to look at GPS. Just amazing. It was so good I figured I'd never need car again. But it was expensive, so I used it sparingly. I'd take public transit or walk most of t…

...Uber when it first started was a Black Car service... you can still call a black car service and it will be a certified livery driver.

There are also still plenty of black car services around if you are concerned about loss of quality in more affordable offerings (where did you think the tradeoff was going to be for a more affordable solution? Purely scale?)

Re: Uber Posts $5.2B Loss and Slowest Ever Growth Rate

#70

Post by toasterlovin » Thu, Aug 08, 2019, 8:43 PM UTC

umeshunni wrote: post #41

moate wrote: post #26

Earlier quoted context omitted.

Let's say you give me 20 bucks, and I drop it. But only one time. Does that mean I didn't lose your $20?

Let's say I take a piece of paper, tell you that it's worth $20 and give it you. And then you drop it. Did you lose $20? That's a closer analogy to SBC than losing cash.

Dilution of ownership goes in two directions. You pointed out that it could be less valuable than the book value. But if the company does well, then the cost of that dilution actually increases over time.