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Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

economist.com

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Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#21

Post by newfonewhodis »

paxys wrote: post #10

I was expecting a data driven argument but the bits of data shared actually contradict the author. These companies mentioned are collectively worth $500B, after taking $100B in venture capital. They are starting to get profitable. Demand for their services is increasing. This article is thousands of words of the exact same talking points we have been hearing for a decade. What's the "after all" part?

> They are starting to get profitable

I don't know what you are basing this on but it's definitely not based on data.

$UBER EPS over the last few quarters:

-1.28 0.61 -0.06 -0.54 -0.62

$DASH EPS

-0.30 -0.34 -2.67

The only way they are getting profitable is on an "adjusted basis", in other words when they exclude most of their expenses. That's not a business, that's a game.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#22

Post by moolcool »

alphabettsy wrote: post #9
moolcool wrote: post #8

This may be a hot take, but I think the gig economy is one thing which could be a pretty solid use of the blockchain. Uber/DoorDash/Lyft are all pretty simple CRUD apps at their core, and the companies themselves do very little actual work. Unfortunately, due to the Silicon Valley cult of growth, they are still either unprofitable or barely profitable while also taking a pretty massive cut away from actual workers on…

The companies exist because there’s a value in a middle-man handling things like vetting drivers, tax and regulatory compliance, and handling disputes like “my food is partially eaten”. You could use the blockchain in some ways, but I don’t see how the companies themselves could be easily replaced.

It would serve as a neutral platform on which clients could be built though. Like instead of a restaurant listing on the existing apps, they'd list their menus on the blockchain and third party clients could exist and race-for-the-bottom in terms of fees. It's like the difference between Twitter and Email

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#23

Post by coldcode »

All of these companies may have a functional business and can stick around, but they are not worth the valuation present in their stock. Even Tesla is not worth anywhere near $1T. In the end you have to eventually earn enough to support the price (once all the Fed support goes away from the market) but none of these companies will ever make enough revenue or profit.

For now unreality keeps the market high.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#24

Post by cactus2093 »

jjulius wrote: post #15
paxys wrote: post #10

I was expecting a data driven argument but the bits of data shared actually contradict the author. These companies mentioned are collectively worth $500B, after taking $100B in venture capital. They are starting to get profitable. Demand for their services is increasing. This article is thousands of words of the exact same talking points we have been hearing for a decade. What's the "after all" part?

>They are starting to get profitable. No. They posted an adjusted Q3 profit of $8M, with an actual Q3 loss of $2.4B.

The $2.4B loss is a write-down of their ownership in Didi which has nothing to do with the basic economics of Uber's operations.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#25

Post by X6S1x6Okd1st »

cactus2093 wrote: post #24
jjulius wrote: post #15

Earlier quoted context omitted.

>They are starting to get profitable. No. They posted an adjusted Q3 profit of $8M, with an actual Q3 loss of $2.4B.

The $2.4B loss is a write-down of their ownership in Didi which has nothing to do with the basic economics of Uber's operations.

Wasn't part of the basic operations to pay for capturing all the markets?

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#26

Post by nabla9 »

summary:

Platform economy can create huge profits if you can lock in the markets. Create moat that keeps competition away.

Uber, DoorDash have none of that.

Uber's global brand recognition can help with tourists and business travelers who just want familiar, but they are small fraction of the market Uber needs to lock in to justify their market cap. Uber is not like Amazon with returns to scale.

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#27

Post by kyleblarson »

Looking at the insider transactions listings for either company I'd say capitalism is treating them quite well:

https://finance.yahoo.com/quote/DASH/insider-transactions?p=...

https://finance.yahoo.com/quote/UBER/insider-transactions?p=...

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#28

Post by batshit_beaver »

mstipetic wrote: post #18
JulianMorrison wrote: post #13

If you are dumping to own the market as a monopoly, and so is your competitor, and both of you are buoyed up by seemingly limitless investor finance, then all that happens is that investors' money moves into the customers' pockets.

And previous well functioning economies get destroyed in the process

If pervious economies were so well functioning, why couldn't I easily order pretty much any food from any restaurant within a 50 mile radius with a click of a button before Uber and DoorDash came along?

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#29

Post by maedla »

batshit_beaver wrote: post #28
mstipetic wrote: post #18

Earlier quoted context omitted.

And previous well functioning economies get destroyed in the process

If pervious economies were so well functioning, why couldn't I easily order pretty much any food from any restaurant within a 50 mile radius with a click of a button before Uber and DoorDash came along?

One could always just call

Re: Uber, DoorDash and similar firms can’t defy the laws of capitalism after all

#30

Post by xyzzy21 »

Ultimately you can NOT "magically" negate "Last Mile Costs" in cities and towns where the Last Mile path distance is enormous.

Did my MBA thesis on this subject with the benefit of 20 years of engineering experience. The numbers simply do not work unless you change how cities and residences are built, which would cost far more than you'd ever gain from solving Last Mile costs - the breakeven time is of the order of 100-200 years!

The VERY WORST are US-style suburbs. The best would be Asian-style urban - which NO US CITY is other than some parts of Manhattan.

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