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I'd love to hear some smart people opinions on this idea: "Uber doesn't need to be profitable, they just need to survive until their autonomous cars are deployed"
I'd love to hear some smart people opinions on this idea: "Uber doesn't need to be profitable, they just need to survive until their autonomous cars are deployed"
IMHO, autonomous cars actually breaks Uber's model. It changes it from taking a % off the top of a market to a capital and maintenance intensive business. Only seems to work if they end up with some sort of franchise model. Sort of like how Coke has a bunch of distributors.
Earlier quoted context omitted.
Someday, I want to see a financial statement where the non-GAAP accounting makes the company look worse than GAAP accounting. Statistically, that should happen half the time. It doesn't.
> Statistically, that should happen half the time. Uhh...no. Non-GAAP is financials manipulated against accounting standards to show a better picture. No company wants to show a worse picture.
Does this mean that raising the price by 10% has them breaking even? Maybe.
It does show the immense potential though, their bookings are so large that 10 percent change would net them billions more. They are booking 1 billion dollars worth of rides every week.
Having new “one-time” charges every quarter means those are not one-time charges. They’re part of the business, which means the business doesn’t work. One of Ubers biggest problems is that they have zero brand loyalty. For a company that sells a utility (get me, or my food, from A to B) rather than an experience (like a cool vacation in a unique mansion), I will always pick the cheapest option. Whether that’s Uber or…
Of course these businesses have some barriers to entry (so does Uber. Lyft et al. notwithstanding), but it's not a result of network effects that we're used to with companies like FB and eBay.
Basically they lost 10% of their gross bookings. Does this mean that raising the price by 10% has them breaking even? Maybe. It does show the immense potential though, their bookings are so large that 10 percent change would net them billions more. They are booking 1 billion dollars worth of rides every week.
Kind of a hot take, but this is why I'm long Uber. They're processing an insane amount of orders, and getting a huge amount of people using their app. If Lyft dies, or if a merger occurs, then we have a large ride share company that is still a lot more than 10% better than taxis. Most customers will still be taking Ubers, regardless of that 10% price hike.
Of course, this is just for the ride share business. I don't see how food delivery will be profitable long-term. Maybe it'll be just a loss leader for them?
Earlier quoted context omitted.
Someday, I want to see a financial statement where the non-GAAP accounting makes the company look worse than GAAP accounting. Statistically, that should happen half the time. It doesn't.
Having worked with investment bankers: Statistically speaking, bankers develop various hypotheses re: what "adjustments" might be added to a financial model to make the company look better to investors. They tell their junior analysts to run the numbers, this flows down the chain, and many late nights and Seamless orders ensue. Experienced bankers have pretty good priors, so most of these hypotheses make the company…
Having new “one-time” charges every quarter means those are not one-time charges. They’re part of the business, which means the business doesn’t work. One of Ubers biggest problems is that they have zero brand loyalty. For a company that sells a utility (get me, or my food, from A to B) rather than an experience (like a cool vacation in a unique mansion), I will always pick the cheapest option. Whether that’s Uber or…
People in tech industry have excessive bias against businesses with no network effects or other obscenely effective barriers to entry. There are lots of successful, large corporations with varying levels of barriers to entry. Exxon Mobil doesn't have a network effect and has zero brand loyalty, but it's still a huge business. McDonald's also lacks network effects, though it does have some brand loyalty, perhaps simil…
Of course! But they’re not valued at 10x revenue like tech companies. Uber stock has nowhere to go but down.
Basically they lost 10% of their gross bookings. Does this mean that raising the price by 10% has them breaking even? Maybe. It does show the immense potential though, their bookings are so large that 10 percent change would net them billions more. They are booking 1 billion dollars worth of rides every week.
> their bookings are so large that 10 percent change would net them billions more. Kind of a hot take, but this is why I'm long Uber. They're processing an insane amount of orders, and getting a huge amount of people using their app. If Lyft dies, or if a merger occurs, then we have a large ride share company that is still a lot more than 10% better than taxis. Most customers will still be taking Ubers, regardless of…
If they hadn't gotten into food delivery, freight, scooters, etc. they'd be profitable by now.
Only if you take their made up, non GAAP, financial measurement of “adjusted EBITDA” seriously. This is no better than WeWork’s “community adjusted EBITDA” and we see how that worked out. Adjusted EBITDA. We define Adjusted EBITDA as net income (loss), excluding (i) income (loss) from discontinued operations, net of income taxes, (ii) net income (loss) attributable to non-controlling interests, net of tax, (iii) prov…
But I'm really not even commenting on these results precisely. They would have been in an entirely different position without all the distractions. Uber's ride business now makes a billion dollars a month in revenue. That's after paying drivers. If they had been laser-focused on making the ride business work, they could have grown a much lower-overhead business. They could have taken the company public years ago. An earlier IPO would have meant those huge stock-based compensation packages would be off the books by now. A just-get-me-a-car Uber would have been GAAP profitable by now.