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Uber Bonds Term Sheet Reveals $470M in Operating Losses

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Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#111

Post by wpietri »

learc83 wrote: post #70
efuquen wrote: post #61

Earlier quoted context omitted.

My problem with that statement is that it describes every single job you could possibly have, even the very well paying ones. You are always trading your labor to somebody with money, whether it's an Uber driver or the CEO of a major corporation. It's not the "Uber model", it's the money represents an agreed upon denomination to trade goods and services with model.

The important part of wpietri's critique is "during the instants we are directly useful". The CEO doesn't stop being paid when she walks to the bathroom, and a cashier doesn't stop being paid when he's waiting for a customer to show up. wpietri is talking about a shift in the granularity of trading your labor for money, so that you aren't paid for a day or an hour of work, but for the exact number of minutes you perf…

And I'd add that for me the biggest issue is the extent to which it treats workers as disposable. In a salaried position, everybody understands and behaves as if people are people. E.g., sick days.

As somebody who was a self-employed consultant for years, I get that being one's own boss has upsides. But I always maintained a large buffer of cash and could price in all the time I spent looking for work. Things like Uber and the new retail scheduling trend don't allow for that, and as far as I'm concerned amount to calculated exploitation of desperate people.

In some sense, that's nothing new in labor history; we've always had exploitation of desperate people. But that's no excuse for increasing it, and in particular I despise Uber's "we're just helping people be independent entrepreneurs" spin to cover up that exploitation, especially when their whole plan is to kick those supposed entrepreneurs out into the snow the moment they have self-driving cars.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#112

Post by icebraining »

wpietri wrote: post #107
icebraining wrote: post #88

Earlier quoted context omitted.

How is Uber in any way different in terms of "job security" and "getting paid only when they are useful" than taxis? Taxi drivers were already mostly contractors, who had to pay to work (renting a medallion from one of the rich guys who owned them, renting the car, paying for gas) and then got paid per ride. I dislike Uber as a company in general, but I don't get this idea that they represent some worsening of the wo…

The cab drivers I talk to (which is a fair number, since I still take cabs) by and large hate Uber and are quite happy to talk about it, so if you're really curious, drop $20 and ask. That said, my take: Taxi drivers were mostly contractors, and they did have to rent the cab. But I think that's way better than having to buy the whole goddamn car and then hope that they make it back. Plus paying all of the maintenance…

But I think that's way better than having to buy the whole goddamn car and then hope that they make it back. Plus paying all of the maintenance and being out of work if a car broke.

There are already multiple companies renting cars for driving for Uber/Lyft/etc.

Specifically, here in SF medallions could be bought only by working taxi drivers, and in order on a waiting list. So the ones that talked about it to me were pretty comfortable with the system.

Yeah, no shit, they got in. It's like measuring the average outcome of a lottery by only surveying the winners. What about everyone who didn't? How do you measure the loss inflicted on everyone who remained unemployed when could they have been working?

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#113

Post by wpietri »

icebraining wrote: post #88
wpietri wrote: post #40

Earlier quoted context omitted.

Having worked for financial traders I won't call them the very worst company in the world. But if my choices were working for them or quitting the industry, I wouldn't blink. For me it's more the accumulation of awfulness. They started out as a scheme to time-share limos among young entitled dudebros. They entered the market with the black cars, exploiting a status-good dynamic. They've shifted all of the capital cos…

How is Uber in any way different in terms of "job security" and "getting paid only when they are useful" than taxis? Taxi drivers were already mostly contractors, who had to pay to work (renting a medallion from one of the rich guys who owned them, renting the car, paying for gas) and then got paid per ride. I dislike Uber as a company in general, but I don't get this idea that they represent some worsening of the wo…

> There already multiple companies renting cars for driving for Uber/Lyft/etc.

What percentage of the total fleet are those? What percentage of the markets are they in? My guess: vanishingly small. It's also not clear whether those businesses would survive; there's a reason Uber dodged that end of the business.

> How do you measure the loss inflicted on everyone who remained unemployed when could they have been working?

So your notion here is that there are some number of people who were saying, "Gosh, I wish I could be a taxi driver" but are otherwise sitting around idle because of medallion restrictions limiting job supply? What's your evidence that number is greater than zero?

As far as I know, taxi companies have pretty much always been hiring in SF. And that's despite the fact that the medallion system artificially boosts individual income through supply restrictions.

Given that taxi drivers are on the order of 1/1000th of the American labor force, I suspect the medallion system caused exactly zero unemployment, but instead created an infinitesimal decrease in the general-pool labor price through a tiny supply increase.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#114

Post by jsprogrammer »

lsc wrote: post #67
wpietri wrote: post #40

Earlier quoted context omitted.

Having worked for financial traders I won't call them the very worst company in the world. But if my choices were working for them or quitting the industry, I wouldn't blink. For me it's more the accumulation of awfulness. They started out as a scheme to time-share limos among young entitled dudebros. They entered the market with the black cars, exploiting a status-good dynamic. They've shifted all of the capital cos…

>Throughout all of this, they sing a song of "entrepreneurship" and "worker independence" while providing low-quality, low-stability jobs and making long-term plans to put every one of their drivers out of work. So, of the people I know working for Uber... it seems that compared to other unskiled labor jobs open to them? By all accounts, Uber is worlds better than foodservice, unless you count both the lack of disabi…

Is driving really unskilled? Most people take a course to learn and you have to be tested and regularly licensed to legally operate a vehicle on public roads.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#115

Post by wpietri »

lsc wrote: post #97
learc83 wrote: post #77

Earlier quoted context omitted.

Uber isn't really a job open to the poor. First, you need to be able to afford a decent car, which is right out for the for a lot of people. Second, if you're poor and living paycheck to paycheck, you're unlikely to have the cash to cover any major repairs. Also, after you deduct vehicle depreciation, insurance, gas, and time driving without a fare, uber doesn't pay all that well per hour. As far as actual driver sta…

> Uber isn't really a job open to the poor. First, you need to be able to afford a decent car, which is right out for the for a lot of people. Second, if you're poor and living paycheck to paycheck, you're unlikely to have the cash to cover any major repairs. Which doesn't stop people from buying nice cars. Don't get me wrong, the whole recent model car thing is a barrier, you need credit; but have you seen how easy…

> Don't get me wrong, the whole recent model car thing is a barrier, you need credit; but have you seen how easy it is to get a car loan lately? It's like subprime mortgages back in the day.

You do realize that subprime mortgages turned out terribly for a lot of low-income people, right? Because when the economic circumstances changed, their debt was suddenly unaffordable, ruining credit and ruining lives? And that many of those sub-prime mortgages were basically designed from the start to take money from unsophisticated borrowers, saddling them up with debt they probably couldn't afford.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#116

Post by richardbrevig »

prawn wrote: post #66
geofft wrote: post #38

There was a comment thread earlier today about whether Uber is solving rich-people problems or common-people problems. I wonder the extent to which Uber's pricing is sustainable -- are they subsidizing uberX and uberPOOL pricing out of money they're raising, or are the debts just in the pursuit of growth to new cities? Or put another way, if they ceased all growth, froze prices, and laid off all engineering and marke…

Maybe their plan is just to subsidise drivers until self-driving cars arrive, by which time they will have brand dominance and can carry on merrily.

This is always my thought whenever I see a conversation like this come up about Uber. I understand they're all important issues, but why care so much about whether their drivers are employees or contractors when they're intending to lay them all off ASAP? They're just buying time and taking market share until self-driving cars arrive.

Don't remember the link, but Kalanick was recently quoted about how he'd buy a bunch of Tesla self-driving cars in 2020. Whether it will be Teslas or not, I believe it's clear that their whole strategy is to move to self-driving cars as immediately as feasible.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#117

Post by wpietri »

icebraining wrote: post #112
wpietri wrote: post #107

Earlier quoted context omitted.

The cab drivers I talk to (which is a fair number, since I still take cabs) by and large hate Uber and are quite happy to talk about it, so if you're really curious, drop $20 and ask. That said, my take: Taxi drivers were mostly contractors, and they did have to rent the cab. But I think that's way better than having to buy the whole goddamn car and then hope that they make it back. Plus paying all of the maintenance…

But I think that's way better than having to buy the whole goddamn car and then hope that they make it back. Plus paying all of the maintenance and being out of work if a car broke. There are already multiple companies renting cars for driving for Uber/Lyft/etc. Specifically, here in SF medallions could be bought only by working taxi drivers, and in order on a waiting list. So the ones that talked about it to me were…

> There already multiple companies renting cars for driving for Uber/Lyft/etc.

And what percentage of the total fleet are those? What percentage of the markets are they in? My guess: vanishingly small. And it's also not clear whether those businesses would survive; there's a reason Uber dodged that end of the business.

> How do you measure the loss inflicted on everyone who remained unemployed when could they have been working?

So your notion here is that there are some number of people who were saying, "Gosh, I wish I could be a taxi driver" but are otherwise sitting around idle because of medallion restrictions limiting supply? What's your evidence that number is greater than zero?

As far as I know, taxi companies have pretty much always been hiring in SF. And that's despite the fact that the medallion system artificially boosts individual income through supply restrictions.

Also, given that taxi drivers are on the order of 1/1000th of the American labor force, I suspect the medallion system caused exactly zero unemployment, but instead, if it had any effect at all, created an infinitesimal decrease in the labor price.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#118

Post by omouse »

Aloisius wrote: post #80
prawn wrote: post #66

Earlier quoted context omitted.

Maybe their plan is just to subsidise drivers until self-driving cars arrive, by which time they will have brand dominance and can carry on merrily.

It seem highly unlikely that they're planning on waiting 20+ years it will take before fully autonomous vehicles are able to reliably navigate busy city streets and are licensed to do so without a driver behind the wheel.

It'll be less than a decade, people are already talking about replacing trucks with self-driving trucks and there's been lots of research and experimentation with self-driving cars and synchronization. The pieces are slowly falling into place and the key things remaining are the laws need to accommodate autonomous vehicles and larger scale tests need to happen.

When the law catches up, insurance companies will have something in place.

When there's a large scale test, production/distribution have to ramp up.

Even if Uber can replace just 1% of their drivers with self-driving cars it would be worthwhile.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#119

Post by joshjkim »

geofft wrote: post #86
joshjkim wrote: post #76

Earlier quoted context omitted.

It would be profitable, but assuming the situation your describe, it would primarily come down to (1) driver churn and (2) costs associated with any adverse legal rulings/judgments. 1. Cost of recruiting drivers is relatively high - probably around $50-$100 per driver. This cost is composed of background check (probably $10-20), the ad that got them in the door ($5-10 for that click), the overhead cost of recruiting…

> Cost of recruiting drivers is relatively high - probably around $50-$100 per driver. Hrm. Instead of working from first principles, we can poke at some data. Zen99 calculates that Uber seems to be spending some $1M/year on Craigslist ads for SF drivers alone [1], and as of the end of last year, they had about 16,000 drivers in SF [2]. Assuming generously that they recruited them all that year, that's about $62 on C…

you = right. I was thinking on a per unit basis, but if you think on a conversion basis your $1k-$2k makes a lot of sense, even if you start with my #s - if you assume $50-$100 per driver, and that Uber actually only converts 5% (which is generous), that means you get to the $1k-$2k.

Re: Uber Bonds Term Sheet Reveals $470M in Operating Losses

#120

Post by joshjkim »

personjerry wrote: post #31
joshjkim wrote: post #13

Earlier quoted context omitted.

This is from an old post but I think you'll find interesting: Note on Uber: I think Uber is a great business and has a significantly net-positive impact on society, and I reserve judgment w/r/t whether TK and the other Uber execs are good or bad people - I can't conclude they are good because they run a good business, and I can't conclude they are bad because they say stupid things in public. Note on Nietzche: In Thu…

If you're right, it sounds like Uber is merely more public with their politics, and hence might actually serve to bring this "hidden" moral issues to light?

Yes, I think it's good that people are becoming more aware - Uber interestingly had politics block their business much earlier than most, but looking at FB, Google w/r/t data + anti-trust, the decade of tech lobbying is well, well underway. When Apple is almost 2X Exxon-Mobil, it was only a matter of time before tech > oil =)
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