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Uber’s Still Not Profitable

doctorow.medium.com

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Re: Uber’s Still Not Profitable

#11

Post by targ65 »

So let me see if I get this. Uber has been struggling to become profitable and this blog has gone to town many times making fun of Uber for not being really profitable. Finally, Uber does the only thing that can get it profitable: raise prices and control costs. And this blog finds a way to complain again, saying that it " Uber transferred $2.8b from its drivers to its shareholders".

Of course, any company that makes any profit could instead, in theory, give that money to its employees/contractors. But then no company would ever be profitable. In addition, the blog says that the main reason for profitability is higher consumer prices, but then calls the profits a transfer from labor.

The post itself says Uber investors have spent 32B and hasn't seen any returns. So yes, profits have to come from consumers spending more money than labor takes in. Revenue minus expenses. It's math.

Don't get me wrong, Uber is very very far from a perfect company. But taking a communist point of view on everything a company does, just to stir anger and resentment, is not helpful.

Re: Uber’s Still Not Profitable

#12

Post by dragontamer »

targ65 wrote: post #11

So let me see if I get this. Uber has been struggling to become profitable and this blog has gone to town many times making fun of Uber for not being really profitable. Finally, Uber does the only thing that can get it profitable: raise prices and control costs. And this blog finds a way to complain again, saying that it " Uber transferred $2.8b from its drivers to its shareholders". Of course, any company that makes…

Uber is inefficient because you need to spend $500 in car maintenance costs / fuel to make $500 as a driver.

Taxi companies, for all of their faults, can order fleet vehicles that minimize maintenance costs. Its a lot easier to maintain 100x of the same car, with the same parts, with the same maintenance crews/training, rather than 100x individuals all spending full rate on their own car maintenance fees.

Whatever vehicle is most efficient (ie: Prius for the last decade), can serve as the low-maintenance backbone of your car network.

Re: Uber’s Still Not Profitable

#13

Post by dragontamer »

patchtopic wrote: post #7
gman83 wrote: post #2

It seems really strange to me that Cory Doctorow is using Medium as a blog.

his strategy is to maintain a few "core" blogs that are completely under his control, but cross-post across lots of other sites that might have greater reach, but where he has less control.. so it's more a mirror than a blog. I think the source post for this is at https://pluralistic.net/2022/08/05/a-lousy-taxi#a-giant-aste...

Thanks.

I knew I read this before after reaching the 3rd or 4th paragraph, but I couldn't find the original link.

https://news.ycombinator.com/item?id=32374334

That other post has a Hacker News post on it already, with a big discussion thread.

Re: Uber’s Still Not Profitable

#14

Post by dragontamer »

seanhandley wrote: post #8
nicbou wrote: post #5

As a layman, it still blows my mind that giant companies can operate at such a massive loss for so long, seemingly without any road to profitability. Mobility startups in particular keep failing, and new ones keep getting funded. My daft question is why? Why do they keep betting on the same losing horse. I often joke that my humble little website is massively more profitable than a few of those companies combined.

I think it's the "go big, or go home" mentality. Companies with this strategy are all desperate to get global market share. It's obviously a gamble, and one that can pay off. I think the writing may be on the wall for Uber.

> It's obviously a gamble, and one that can pay off.

It pays off better when loans are at 0.25% rather than at 3%.

This crap wouldn't fly in the 1980s economy of 15%+ interest rates. No one would fund your company when you can just make 15% on US Treasuries instead.

Re: Uber’s Still Not Profitable

#16

Post by sokoloff »

> Its fantasy of magic, self-driving robo-taxis is over (the company spent $2.5b to make a car that had a fatal crash every 0.25 miles, and then had to pay another company $400m to take the division off its hands)

How is that remotely possibly correct? As far as I know, Uber has had a single, highly publicized, fatal accident in its self-driving program and surely that car alone had driven more than a quarter of a mile on the day of the accident…

Re: Uber’s Still Not Profitable

#17

Post by onlyrealcuzzo »

nicbou wrote: post #5

As a layman, it still blows my mind that giant companies can operate at such a massive loss for so long, seemingly without any road to profitability. Mobility startups in particular keep failing, and new ones keep getting funded. My daft question is why? Why do they keep betting on the same losing horse. I often joke that my humble little website is massively more profitable than a few of those companies combined.

1) even though those companies have a history of never making money, they do have a history of generating massive capital gains for early investors.

2) no one wants income, because it's taxed at 35%. Everyone wants those massive capital gains taxed at 15%.

3) 14 years of ZIRP and QE meant there was basically unlimited money for anyone willing to gamble and take these positions.

Re: Uber’s Still Not Profitable

#20

Post by b112 »

dragontamer wrote: post #12
targ65 wrote: post #11

So let me see if I get this. Uber has been struggling to become profitable and this blog has gone to town many times making fun of Uber for not being really profitable. Finally, Uber does the only thing that can get it profitable: raise prices and control costs. And this blog finds a way to complain again, saying that it " Uber transferred $2.8b from its drivers to its shareholders". Of course, any company that makes…

Uber is inefficient because you need to spend $500 in car maintenance costs / fuel to make $500 as a driver. Taxi companies, for all of their faults, can order fleet vehicles that minimize maintenance costs. Its a lot easier to maintain 100x of the same car, with the same parts, with the same maintenance crews/training, rather than 100x individuals all spending full rate on their own car maintenance fees. Whatever ve…

While there is truth to what you say, it is greatly, greatly exaggerated.

As a person who delivered pizza through high school, and college, it's just not that bad. And yes, driving 8 hours a night, stop and go, is bad for a car ... regardless if it is pizzas or people being delivered. (Pizza delivery is worse, I'd often deliver 8 pizzas an hour average on Friday nights, try that with people!)

However, I assure you I did not need to spend $500/week on repairs, 20 years ago. That metric has certainly not changed now. An example, by that metric, there are many brand new cars for under $15kUSD (pandemic issues are not part of this argument).

At $500/week income, and by your logic therefore $500 per week in "car repairs", one could buy a new car every 30 weeks, or about twice per year. And as a person who delivered pizza nightly, 8 hours, 5 days per week, you wouldn't even new tires in that 6 months, or brake pads, or ... well.. anything.

Personally, I used to buy used, but where high-cost items are in good shape. EG, transmission, etc, etc. I bought 2 cars in the 6 years I delivered pizza. Each 6+ years old, each only requiring tires, brake pads+rotors from time to time.

When it came time for a big repair? That's when I bolted to the second car.

My point in all of this, is that yes -- you pay for repairs. But the numbers I hear being thrown around, are just extremely excessive.

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