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Uber Says Sales Growth Outpaces Losses

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Re: Uber Says Sales Growth Outpaces Losses

#121

Post by legulere »

InclinedPlane wrote: post #75
georgespencer wrote: post #33

Earlier quoted context omitted.

The naivety on HN is staggering sometimes. Imagine your parents give you a $10 loan to start a lemonade stand. You think you need six years to make them an above market return on their investment of 2x. You're gonna buy cups, lemons, sugar, and water. In the first year you think you're going to spend $3 and make $0. So you have $7 in the bank. In the second year you think you're gonna spend $2, and make $1. So you ha…

The naiveté on HN is staggering sometimes. Imagine your parents give you a 10 dollar loan to start a lemonade stand. It costs you $3 to buy the lemons, sugar, water, and cups to make 10 cups of lemonade, that you sell for ten cents each. In the first day you spend $3 and make $1. In the second day you spend 3 more dollars and make one dollar. In the third day you spend $3 and make another $1. In the fourth day you ag…

> or, somehow managing to get self-driving taxis on the market in the next 5 years so they can take driver compensation out of the equation.

Only if nobody beats them to it and offers self-driving taxis before they do.

Re: Uber Says Sales Growth Outpaces Losses

#122

Post by legulere »

georgespencer wrote: post #116
InclinedPlane wrote: post #75

Earlier quoted context omitted.

The naiveté on HN is staggering sometimes. Imagine your parents give you a 10 dollar loan to start a lemonade stand. It costs you $3 to buy the lemons, sugar, water, and cups to make 10 cups of lemonade, that you sell for ten cents each. In the first day you spend $3 and make $1. In the second day you spend 3 more dollars and make one dollar. In the third day you spend $3 and make another $1. In the fourth day you ag…

This is nonsense I'm afraid. I was demonstrating to OP that even if he is concerned by the losses Uber is making, and doesn't consider $3bn of losses on $6bn of revenue to be "healthy", it doesn't matter if the plan and the numbers are headed in the right way as far as investors are concerned. > On the fifth day a miracle happens and your mom gives you another 10 dollars This is precisely my point. This does not happ…

15% of the $6.5bn revenue is $0.975bn, around one third of the net loss.

Re: Uber Says Sales Growth Outpaces Losses

#123

Post by oli5679 »

georgespencer wrote: post #120
oli5679 wrote: post #118

Earlier quoted context omitted.

Can you articulate: (a) your beliefs that Uber's fleet shifts to driverless at various points over the next 20 years. (b) Their change in costs and revenues following this scenario (and in cases when this doesn't happen). I can only justify Uber's recent valuations if I entirely discount regulatory risk, assume huge GDP growth in the developing economies + Uber establishing dominance there and that Uber goes complete…

You're forgetting Uber's intent to be a major player in on-demand delivery, local shipping/haulage, and long distance shipping. My point as ever remains this: people are looking at Uber's current model (where it loses 15% on each fare), its revenue, and its losses, and shitting themselves. They are correctly observing that to raise fares they would have to suffer a loss of customers. Those people are missing several…

Ok great. Thanks for going into so much detail.

How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous.

How much can Uber's revenue grow with/without 1 (bare in mind they already represent approx 1/4 to 1/5 of global taxi bookings, although I admit this could be undercounted and grow)?

Based on this, what happens to Uber's net margin with/without (1). Bare in mind it's currently > -100% and the sector average has been low-mid single digits for years. I can't see it rising much above $3 -$4 billion with and can't get it anywhere near this without.

Its true that smaller companies raise money at high multiples of revenue, but that is when they represent a much smaller proportion of the potential market.

It's also true that they COULD successfully expand into other markets and this COULD one day become profitable. However, in my mind this roughly cancels out with the significant competitive and regulatory risk that they face in doubling their share of the taxi market,and they could end up repeating their trick of selling dollar bills for 85 cents in the markets too.

Happy to hear where you disagree!

Re: Uber Says Sales Growth Outpaces Losses

#124

Post by dllthomas »

_Codemonkeyism wrote: post #108
temp20160423 wrote: post #99

Earlier quoted context omitted.

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.

Uber owns way more.

From http://www.latimes.com/business/technology/la-fi-tn-uber-did...

> Uber will receive a 5.89% share of the combined entity with preferred equity interest, which is equal to a 17.7% economic interest in Didi Chuxing, the statement said.

Re: Uber Says Sales Growth Outpaces Losses

#125

Post by dllthomas »

legulere wrote: post #122
georgespencer wrote: post #116

Earlier quoted context omitted.

This is nonsense I'm afraid. I was demonstrating to OP that even if he is concerned by the losses Uber is making, and doesn't consider $3bn of losses on $6bn of revenue to be "healthy", it doesn't matter if the plan and the numbers are headed in the right way as far as investors are concerned. > On the fifth day a miracle happens and your mom gives you another 10 dollars This is precisely my point. This does not happ…

15% of the $6.5bn revenue is $0.975bn, around one third of the net loss.

As noted elsewhere on this page, Uber "revenue" is not the full price of the trip - drivers are paid first for most products (pool works differently).

Re: Uber Says Sales Growth Outpaces Losses

#126

Post by dllthomas »

lsc wrote: post #105
aianus wrote: post #93

Earlier quoted context omitted.

> 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…

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

They can be losing money on many pool rides and still be making money on pool overall. I don't know whether they are.

Re: Uber Says Sales Growth Outpaces Losses

#127

Post by dllthomas »

tedsanders wrote: post #80
slackstation wrote: post #15

Sales growth in commodity product that is loosing money on ever sale? I'll never understand this. Uber won't own the market. There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft. I sold my car over a year ago and use a mix of ridesharing and rentals for transportation. Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and fr…

Citation please? Is there any public information that says Uber is losing money on every sale? I'm honestly curious. In my brief searching, I haven't found much. I'd love it if someone would point me to information on Uber's finances/economics that shows their negative gross margin in developed city markets. My mental model of their finances is heavy fixed costs (~5,000 programmers) and near-zero marginal costs. The…

There have been leaks (from a while back) that show a loss in most markets (but not all). The spending involved is mostly from driver incentives, which takes some form of "paying drivers more than the fare[s they get]", but is often of the form "we will guarantee you make at least $X so long as you're online in that area during this time and accept at least y% of the requests".

Re: Uber Says Sales Growth Outpaces Losses

#128

Post by cwilkes »

ryanworl wrote: post #9
acchow wrote: post #5

Earlier quoted context omitted.

Can someone explain how GAAP would consider only Uber's share of an UberX revenue, but the entirety of an UberPool as revenue? This doesn't really make sense to me.

Drivers are charged a percentage-fee for Uber's share of the ride in UberX. In Uber Pool, the driver is paid by Uber (as opposed to just through Uber) a variable amount that is not as easy for us on the outside to calculate as the percentage model.

And that somehow justifies Uber saying that all UberPool money collected is revenue? Because the math is hard?

This company is like a Russian nesting doll shell game. There's more in each layer and every layer is a distraction.

Re: Uber Says Sales Growth Outpaces Losses

#129

Post by toomuchtodo »

hawkice wrote: post #102
toomuchtodo wrote: post #98

Earlier quoted context omitted.

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.

Fair analysis. Definitely hard to obtain meaning from text alone at times.

Re: Uber Says Sales Growth Outpaces Losses

#130

Post by georgespencer »

oli5679 wrote: post #123
georgespencer wrote: post #120

Earlier quoted context omitted.

You're forgetting Uber's intent to be a major player in on-demand delivery, local shipping/haulage, and long distance shipping. My point as ever remains this: people are looking at Uber's current model (where it loses 15% on each fare), its revenue, and its losses, and shitting themselves. They are correctly observing that to raise fares they would have to suffer a loss of customers. Those people are missing several…

Ok great. Thanks for going into so much detail. How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous. How much can Uber's revenue grow with/without 1 (bare in mind they already represent approx 1/4 to 1/5 of global taxi bookings, although I admit this could be undercounted and grow)? Based on this, what happens to Uber's net margin with/without (1). Bare in mind it's cu…

> How likely do you think 1 is in the next 15 years (surely less than 100%)? To me, 50% seems generous.

Tesla has the hardware deployed already and announced that the software to enable Tesla Network (which is essentially Uber, without drivers) will be enabled by the end of this calendar year. You think there are 50% odds that one of the other companies ploughing billions of dollars into autonomous driving R&D is going to take another 15 years to execute on this? I can't think of many examples where that level of first mover advantage has existed outside of the development of viably deployable nuclear weapons.

> Based on this

I don't accept the premise, I'm afraid. But Uber could be profitable if it increased its fare price by 15%. So why is it difficult to believe that they could achieve profitability by cutting central costs?

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