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Uber Says Sales Growth Outpaces Losses

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Re: Uber Says Sales Growth Outpaces Losses

#101

Post by Denzel »

aianus wrote: post #93
Denzel wrote: post #83

Earlier quoted context omitted.

You're conflating the basic unit economic principles of fixed vs. variable costs. And you're ignoring the breakeven point. A company that loses money on every unit sale has no breakeven point (Uber). A company that makes money on every unit sale has a breakeven point (Tesla). Because Tesla's fixed costs are very high, their breakeven point is out there, and thus they must operate at a loss for a period of time. Now t…

> A company that loses money on every unit sale has no breakeven point (Uber) What? Uber spends an additional ~$0 on every additional ride. They only lose money because of growth and price wars with the competition. In mature markets with no competition (eg. Toronto) there are no driver incentives or bonuses and they are still cheap and popular with riders and drivers alike.

So you're telling me that Uber isn't selling their services at a loss on a unit economics scale in the majority of their markets? What percentage of their markets have positive unit economics? This is news to me, and I'm open to updating my viewpoint given data to the contrary.

Re: Uber Says Sales Growth Outpaces Losses

#102

Post by hawkice »

toomuchtodo wrote: post #98
hawkice wrote: post #94

Earlier quoted context omitted.

It's possible he meant game in a deeper, street-philosophy sense, in that the drivers are playing the game and Uber is playing the fool.

My understanding was that Uber had/has a system called "Hell" that could uniquely identify Lyft drivers based on fiticious rider requests Uber would send, and then use that data to target those Lyft drivers to drive exclusively for Uber. Uber most definitely wasn't playing the fool.

I'm not saying that's what's happening, I'm just saying there's an idiomatic use of "playing these companies" that doesn't involve betraying a trust.

Re: Uber Says Sales Growth Outpaces Losses

#103

Post by aetherson »

pfarnsworth wrote: post #85
aetherson wrote: post #7

Earlier quoted context omitted.

This is probably basically about the fact that driver portion is more complicated in UberPool than in the rest of their services. It's to Uber's credit that on an ordinary ride, they don't try to claim that they have revenue equal to the entire fare. That would be an easy way for them to make their top-line financials look way more palatable than they actually are (ie, that they lost about $3B on $20B, rather than $3…

Probably not to their credit, it's something their auditors wouldn't accept because it's fairly straightforward accounting.

These aren't security filings or for their investors. It's to the press. Nobody external is forcing them to account for anything in any particular way that's not blatantly fraudulent.

Re: Uber Says Sales Growth Outpaces Losses

#105

Post by lsc »

aianus wrote: post #93
Denzel wrote: post #83

Earlier quoted context omitted.

You're conflating the basic unit economic principles of fixed vs. variable costs. And you're ignoring the breakeven point. A company that loses money on every unit sale has no breakeven point (Uber). A company that makes money on every unit sale has a breakeven point (Tesla). Because Tesla's fixed costs are very high, their breakeven point is out there, and thus they must operate at a loss for a period of time. Now t…

> A company that loses money on every unit sale has no breakeven point (Uber) What? Uber spends an additional ~$0 on every additional ride. They only lose money because of growth and price wars with the competition. In mature markets with no competition (eg. Toronto) there are no driver incentives or bonuses and they are still cheap and popular with riders and drivers alike.

Hm. I just got driven home from the bar for $4. It was an uber pool, but for the whole ten minute drive, nobody else was in the car. This was in silicon valley, a very mature market.

This sort of thing is super common, where I get a deep discount on a 'pool' ride but I end up riding alone. The drivers tell me that they get a regular rate (on top of whatever the bonuses are) which is per-mile. The guy tonight said he thought he was making like $7 for the ride in question, just on the mileage.

I... am pretty sure they are losing money on many pool rides.

Re: Uber Says Sales Growth Outpaces Losses

#106

Post by TeMPOraL »

jish wrote: post #13

Didn't all of the "scandals" start in Q4 2016 in the first place? This is basically saying, look we were on a good trajectory from Q3-Q4. But the question is, what happened after that?

There were "scandals" almost continuously, every other month since 2014 or earlier. For some reason though, a lot more people started paying attention only after the Susan Fowler debacle.

None of that seems to have impacted Uber anyway, not meaningfully.

Re: Uber Says Sales Growth Outpaces Losses

#107

Post by wintermute2001 »

iaw wrote: post #88
ryanworl wrote: post #8

Earlier quoted context omitted.

Yes, and they would take a corresponding gross margin hit as the driver's payment comes from revenue rather than being accounted for before it. I do not think this a shell game to make the revenue number larger. The way drivers are paid while driving UberX vs. Uber Pool is different, and that probably has accounting rule impact.

GAAP doesn't have to include stock based compensation as a normal expense. If you throw in the fact that Uber compensates at 50% in stock this is probably a shell game.

That's not true: https://www.fool.com/investing/2017/04/14/okta-inc-ipo-what-....

If you're using GAAP, you have to include stock-based compensation as a cost. There are, however, a lot of tech companies that try and spin non-GAAP earnings by removing stock-based compensation, which can paint a very different picture (e.g., Salesforce)

Re: Uber Says Sales Growth Outpaces Losses

#108

Post by _Codemonkeyism »

temp20160423 wrote: post #99
prostoalex wrote: post #63

Earlier quoted context omitted.

> In the fifth year you think you're gonna spend $6 and make $10. And now you're profitable. In theory yes, but tracking the the progress of UberChina http://www.cnbc.com/2016/02/18/uber-losing-1-billion-a-year-... , situation in Denmark or Spain, inability to win market share from established players in Russia, India or Malaysia introduce some real-world corrections to an otherwise ideal business plan.

You should read Brad Stone's The Upstarts. The outcome in China is actually pretty favorable for Uber. One-line summary: Travis (not Uber, but Travis) probably owns as much of Didi as the current founder/CEO of Didi. Didi is currently valued >$30B.

So good for Travis, bad for the investors in Uber? Nice move.

Re: Uber Says Sales Growth Outpaces Losses

#109

Post by petra »

pfarnsworth wrote: post #91
petra wrote: post #47

Earlier quoted context omitted.

There's no lock in, because Uber failed in the most important category of their business - true ride sharing, a business with strong network effect, while others(ridewithvia, ford chariot) are already succeeding with true, high-density ride-sharing, with others companies(moovex, mercedes, ..) are working on their own service. And chariot i think started in 2014, so Uber is very slow to respond, not sure why.

Chariot is doing exactly the same thing as Uber, ie. subsidizing all the rides to get a low price. But they don't have the same network effects, they will go out of business soon.

But chariot has network effects:more passengers = Fuller vehicles + shorter routes = lower costs and lower trip times.

And I'm sure Ford did the math, they're not some VC with free money.

Re: Uber Says Sales Growth Outpaces Losses

#110

Post by nickcrowley81 »

There has never been an above razor thin profit line for fleet vehicle operations. Uber is a subsidized taxi company. They charge people from A TO B and take a cut of the fare. The fares are so low compared to taxis because of this subsidization. The only way they survive as this app form of a taxi is by drastically raising fares. They will be too far behind the driverless car race and crash there as well. Let alone the truth of the matter is, the technology is waaaaaaaay farther away on driverless. Read Financial Times 7 part series on Uber. They're the only ones truly on top of this sham of a company.
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