This is my last story about Travis Kalanick

The article is somewhat long-winded and covers a number of issues, but I couldn't agree more in its conclusion as to what kind of CEO Uber now needs, and what kind of hurdle he is facing:

A boring, operations wizard. Uber is a logistics company that needs an operational wizard, not a product visionary. The bad news for Uber investors is that losing Kalanick creates a massive vacuum of power and resetting this toxic culture will be all but impossible for anyone. [...]

Uber does not need a product visionary. (Guarantee no other Valley insider will have that hot take…) It needs an operational, logistical genius. It needs a brand person. It needs a showman.

On the one hand, Sarah Lacy's reporting on Uber has been the gold standard in terms of her paying attention to specific events and their significance, and explaining it all to readers -- especially with regard to ongoing litigation.

On the other, it seems like she has developed a persecution complex with regard to Uber; since Nov 2014, every article I've read of hers that covers Uber (I'm a Pando subscriber) has at least partially been about her and her relationship with the company. Yes, the fact that Emil Michael casually floated the idea of doing oppo research on her / her family to her face is really fucked up. However, to say she's taken that ball and run with it would be an understatement. I do hope that this is actually her last Kalanick-related story (doubt that will turn out to be the case), because she's a great journalist who is tremendously good at sniffing out what's really going on, and she should be training her sights on a more diverse target set.

> there is no evidence that it is profitable nor (far more worryingly) that it knows how it can make itself profitable.

I'm sorry what? I keep reading these sorts of sentiments, but they sound, and I know this is insulting, they sound like people who don't understand business in even the 101 sense.

As long as the margin per sale is greater than the cost of that sale, it is possible for a business to be profitable one day. Given Uber charge a percent per ride, they definitely have a workable margin (which not all startups do BTW, e.g. many of the food startups like Bento https://gimletmedia.com/episode/kitchen-confidential-season-...).

The question, for a growing business with money in the bank, is are we growing revenue FASTER than we are growing costs. As long as you are, then inevitably, the two lines will intersect at some point. http://4.bp.blogspot.com/-Yv7OoVt_q0I/UHcx99N5I5I/AAAAAAAAAZ... is the sort of graph Uber needs.

So the questions right now for Uber are: at what scale (aka total revenue) does Uber BECOME profitable with its current cost structure? How soon can Uber reach that date? And is Uber's runway long enough to get there?

I have no idea of any of these numbers, but http://uk.businessinsider.com/uber-leaked-finances-accounts-... has some "leaked" numbers. Seems in Q3 2016 they spent $2.5B and made $1.7B, so they would need to either grow by about 50% with zero cost growth, or cut about 32% of the costs to be profitable. Is that doable? How the F would I know? But I doubt that $2.5B includes many must have costs, like servers, developers and offices, and includes a F-ton of advertising and other incentives all of which are easy-ish to cut.

Lets use these numbers as examples:

* Costs: $2.5B * Margin: $1.7B * Monthly Costs Growth: 2% * Monthly Revenue Growth: 5%

If that is the case, Uber are 15 months from profitable.

That's the insane maths of startups: Revenue growth % > Costs Growth % = success.

And what about costs? If I were a betting man, I'd wager most of Uber's costs are things they could cut - advertising, non-essential staff, Given their revenue seems to growing rather well, I see no reason why there isn't a time horizon where Uber is inevitably profitable. Whether Uber has enough runway, and whether they can raise more cash, I have no idea.

Lastly, I find the idea that is floating about that Uber are subsidizing fares a really odd one. I think Uber are subsidizing things. Uber subsidize. development. Uber are also subsidizing the legal battle in certain markets, by paying for cases that will inevitably help competitors. Heck, Uber is even be subsidizing some drivers in some markets (my NYC driver told me they have some finance scheme in place to help new drivers purchase/lease cars). But subsidizing fares? They take a 20% cut, that is no subsidy!

Whether 20% is enough of a cut, and visa versa whether the fees are high enough that a 20% cut is enough raw revenue I don't know. Ditto I don't know whether Uber's runway is long enough, or if they can extend it with more funding. What I do know is all this writing Uber off doesn't seem to track with what seems to me a very sensible "build a moat by being the biggest while growing revenue faster than costs" strategy.

Uber is dead in 5 years, maybe 10 if they (and they will) complete a few more rounds of funding.

> The question, for a growing business with money in the bank, is are we growing revenue FASTER than we are growing costs. As long as you are, then inevitably, the two lines will intersect at some point.

You're implying an infinite market. The shared fever dream of all startup entrepreneurs.