Live data from Hacker News

Uber Bonds Term Sheet Reveals $470M in Operating Losses

bloomberg.com

121–130 of 137 posts

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

#121

This just shows that there is not much margin in this industry. They are essentially buying market share. However, as soon as Uber try to squeeze out some profit, they'll be undercut by the competitors.

That's because Uber is an infrastructure project that just happens to be VC-funded instead of taxpayer-funded. Uber is targeting the taxi industry and delivery services. Their competitors like Lyft have too small a vision. Lyft doesn't want to replace taxis with self-driving, they're focusing on making the standard taxi ride experience nicer than usual. Uber has a service for delivering food, their competitors are courier services who do food delivery, in-house delivery drivers, and apps that let you pre-pay for takeout. Uber's vision is bigger than just delivery of food, it's for delivery of damn near anything.

This is why Jeff Bezos invested in Uber; Amazon is looking at using drones for delivery but why do that when you have a stable of drivers (and self-driving cars in the future) that can do deliveries?

Basically; Uber's competitors are still focusing on their little niches and not willing to be the infrastructure for getting person/object A to place B.

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

#122
post #66
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.

I don't know why people think self-driving cards benefit Uber uniquely. Everyone else would get to use them too, after all, so Lyft's costs also go down.

It's like saying, "whoa, tomato prices have skyrocketed -- I bet grocery stores are making record profits!"

To be sure, there might be some differential advantage, but not enough to justify subsidizing everyone in the hopes they won't jump ship after competition comes in from other brands without these "legacy costs".

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

#123
post #46

I've been pondering how you'd break the uber lock on the market. I mean, I use Uber and not Lyft 'cause there are more Uber drivers, so on average, the car is gonna be there faster if I use Uber. However, if I had an app on my phone to check the nearest uber and the nearest lyft and the nearest whatever else? that would remove the barrier to entry that Uber has set up. in that case (at least when lyft had a nearby ca…

In India, Ixigo has launched a app which shows cabs from all the various cab providers including Uber,Ola,TaxiForSure and others.

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

#124
post #122
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.

I don't know why people think self-driving cards benefit Uber uniquely. Everyone else would get to use them too, after all, so Lyft's costs also go down. It's like saying, "whoa, tomato prices have skyrocketed -- I bet grocery stores are making record profits!" To be sure, there might be some differential advantage, but not enough to justify subsidizing everyone in the hopes they won't jump ship after competition com…

Well, to the argument I was trying to set up (whether cities should regularize Uber or fix taxis), one important change is that Uber now has the capital to make self-driving cars happen, and will continue to have the capital to make them continue to improve, and the taxi industry and transportation agencies don't. That is, I'm not drawing a huge distinction between Uber and Lyft, since both are questionably legal, but between Uber/Lyft/etc. and taxis. You could argue that letting Uber run self-driving cars is better than trying to have government-run self-driving cars.

Depends a lot on whether Uber themselves are making this happen, or we're looking to Tesla, Google, etc. If self-driving cars are going to happen anyway, then there's an argument from the other direction that permitting Uber has no long-term benefits.

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

#125
post #97
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…

>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 it is to get a car loan lately?

I think we have a different definition of poor. I'm not talking about someone who make $40k a year and lives paycheck to paycheck because they spend above their means. I'm talking about people making $15k a year (or less) at near minimum wage job. The kind of people who work in fast food.

>Also, a 2005 model year car is... not a high bar

For a person working 30 hours a week at a fast food restaurant that's a very high bar. And you're forgetting that Uber inspects the car as well, so the clunky beaters that nearly everyone drove when I worked retail during college aren't going to pass inspection.

>Remember, in most parts of America, you need a reliable car for that job at Burger King, too.

Most people working at Burger King don't have reliable cars. If they live outside of a mass transit area, they rely on friends and family when they have breakdowns. If you've ever managed retail employees (I was a geek squad supervisor in college), you'll know just how frequently workers rely on other people to drop them off, or how often they call out because their car broke down.

> And once you factor in maintenance and gas, a 2000 model year really isn't all that much cheaper than a 2005

That's true. But this is a common problem that poor people face. They don't have the money up front, so they take the cheaper up front option even though it's more expensive over the long term.

>I'm comparing it to foodservice; and compared to burger king, from what I hear, it does pay pretty well.

Definitely, but for the average burger king worker buying a car to work for Uber isn't a realistic goal. They don't have the cash and they don't have the credit to get a loan.

My point is, that there is no point comparing Uber to burger king because there is a very small intersection between people who are forced to work at burger king and people who can afford to work for Uber.

>My point is just that it's pretty nice compared to a lower-class job.

Yes,but it has barriers to entry that keeps it from being an option for the working poor, so again there is no point in your comparison.

>40% of working-aged Americans, from what I read, have college degrees

If we're talking about the same statistic, the 40% number was pretty inflated because it considered 2 year and professional degrees.

Also only 2.1% of people with a bachelor's degree are classified as working poor (under the poverty level and working) while over 21% of people with no college degree are classified as working poor.

Since a college degree decreases your chance of being working poor by 10 times, I'd say it's a a good discriminator.

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

#126
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.

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 bunc…

Because that employment aspect is important to those people now. Let Uber do it and what argument do you have against others doing the same? "Soon they'll be robots anyway."

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

#127
post #122
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.

I don't know why people think self-driving cards benefit Uber uniquely. Everyone else would get to use them too, after all, so Lyft's costs also go down. It's like saying, "whoa, tomato prices have skyrocketed -- I bet grocery stores are making record profits!" To be sure, there might be some differential advantage, but not enough to justify subsidizing everyone in the hopes they won't jump ship after competition com…

Uber would have an entrenched brand worldwide and benefits of scale and purchasing power. Would you tackle McDonalds with an international effort to roll out burgers? You have access to the same teenage workers, same buns and potatoes and so on, right?

Ignoring other car services, the public would have the option to buy their own self-driving car, but we'll get to the point where the majority won't. You'll be choosing between:

Own car - larger cost, garaging, cleaning, insurance, power, depreciation, fixed format (sedan, van, truck), etc.

Their car - pay per use, or subscription to use as required, hire the type of vehicle you need when you need it.

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

#128
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…

Sometimes local laws are not worth complying. Taxi medallions are one example - they artificially limit supply and break the market. The argument that a limit on taxis is needed to prevent congestion ignores the whole concept of 'supply and demand'. Too many taxis? The market will correct itself, just like what's happening with Uber drivers (I know many are quitting due to the excess supply).

Also, taxis are only a small fraction of all traffic. Restricting the number of taxis will even worsen congestion (and definitely parking), if people are substituting with their own cars.

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

#129

Earlier quoted context omitted.

Sometimes local laws are not worth complying. Taxi medallions are one example - they artificially limit supply and break the market. The argument that a limit on taxis is needed to prevent congestion ignores the whole concept of 'supply and demand'. Too many taxis? The market will correct itself, just like what's happening with Uber drivers (I know many are quitting due to the excess supply).

I understand that many people have substituted a faith in "the market" for a faith in god, so forgive me if I offend somebody's religious sensibilities here. But it turns out there were historical reasons the supply of taxis was artificially limited. An argument like this, which conflates "good" with "whatever the market does" is a terrible argument because it is only sidestepping the point. If you want to say the su…

> If you want to say the supply restrictions are bad, then you either need to find a different solution that solves the problem [...]

Or just point out that the problem that was ostensibly solved wasn't.

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

#130
post #67

Earlier quoted context omitted.

>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.

I think `unskilled' might be a technical term for how fast a member of the general population could pick up the job?

At some point, computer usage might have been sufficient for crossing the threshold from unskilled to skilled labour. Now we expect everyone to have a basic understanding. (And even earlier, literacy alone was a `skill'.)

Post reply on HN