Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Uber Lays Off 400

nytimes.com

Post reply on HN
Print view View original

211–220 of 310 posts

Re: Uber Lays Off 400

#211

Post by freewilly1040 »

themagician wrote: post #183
codingdave wrote: post #18

> The marketing team had more than 1,200... I fully admit that I'm not in marketing, so there are surely nuances I don't know. But that scale of marketing department is orders of magnitude above any other place I have worked, with the possible exception of IBM in the 90s. Just maybe... this was a reasonable move.

Marketing is all they are. The driver aren't employees. The cars in the fleet aren't their assets. The insurance is handled by someone else and there is no licensing. Uber, itself, is just an app with a giant marketing department. The app itself isn't even that different than it was in 2011. 99% of the functionality that people actually use is exactly the same as it was when they started.

The "just an app" critique is often repeated and makes no sense. The app is just the interface.

Re: Uber Lays Off 400

#212

Post by bmiller2 »

mrnobody_67 wrote: post #177
dalbasal wrote: post #64

Earlier quoted context omitted.

Since we're talking about tech startup marketing budgets, it's a good time to reread http://www.paulgraham.com/yahoo.html By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more r…

40% of all invested VC dollars go to Facebook and Google in the form of customer acquisition costs

Source?

Re: Uber Lays Off 400

#213

Post by kiwidrew »

aresant wrote: post #79
nemothekid wrote: post #68

Earlier quoted context omitted.

I think driver incentives falls under marketing spend at Uber. Driver Incentives are they will pay driver $X to make $Y trips. Essentially riders are paying $5 and drivers are making $6. I believe this is where most of the money is burned at Lyft as well.

UBER masks this real number across many of their general line items. EG they put ~$300,000,000 of the "Driver Incentive" cost into "Cost of Revenue" line item that represents: - "Any amount paid to a driver that exceeds the revenue earned by that driver (for instance, if a driver’s earnings from a trip exceed the fare for that trip). Excess driver incentives jumped by about $300 million in 2018 from the previous year…

In terms of unit economics, UberX is still (mostly) sound -- the rider is paying a fare based roughly on time/distance, and the driver is paid a fare that's also based roughly on time/distance; it's very rare to see a rider paying less than what a driver gets paid. (Even after taking into account the various driver incentives.)

Where the unit economics get completely messed up is Uber Eats. In my local market (Wellington NZ) the eaters are paying a flat delivery fee of $5.99 to $7.99, while the drivers are being paid $5 per pickup and $1.35 per km. This results in drivers earning anywhere from $5 to $20 for each delivery -- and that's without even taking into account any driver promotions. No wonder Uber had to come up with an "excess driver incentives" line item!

Sometimes Eats will have the driver pick up two orders at the same time. This lets Uber collect two delivery fees from the customers while only paying the driver a single pickup fee plus the kms from restaurant to customer A to customer B. In theory this should work in Uber's favour. But their system all-too-frequently will make insane assignments, such as batching together two orders for customers that live in completely opposite directions. There will be situations where the customers have each paid, say, $7.99 for delivery... and the driver ends up earning $30 from the trip!

So this is cutting very deeply into the 35% commission that Uber charges restaurants on the total order value. They're trying to hide the insane unit economics of Eats by spreading the various revenues and costs around different line items...

Re: Uber Lays Off 400

#214

Post by quickthrower2 »

colinmhayes wrote: post #208
quickthrower2 wrote: post #105

Earlier quoted context omitted.

Drug dealers have been known to sell drugs to someone new cheap (perhaps at a loss) to get them hooked, and then once they are hooked jack the price up. Uber is trying to do that with transport.

What happens when the consumer realizes this drug dealer has jacked up prices because they're giving product away? They go to the corner and find a cheaper alternative.

Uber wants to be the only dealer in town.

Re: Uber Lays Off 400

#215

Post by dcposch »

aresant wrote: post #79
nemothekid wrote: post #68

Earlier quoted context omitted.

I think driver incentives falls under marketing spend at Uber. Driver Incentives are they will pay driver $X to make $Y trips. Essentially riders are paying $5 and drivers are making $6. I believe this is where most of the money is burned at Lyft as well.

UBER masks this real number across many of their general line items. EG they put ~$300,000,000 of the "Driver Incentive" cost into "Cost of Revenue" line item that represents: - "Any amount paid to a driver that exceeds the revenue earned by that driver (for instance, if a driver’s earnings from a trip exceed the fare for that trip). Excess driver incentives jumped by about $300 million in 2018 from the previous year…

The elephant in the room for ride sharing is unit economics (and, closely related to unit economics, the race to self-driving).

Hiding $1800m of ride discounts under Sales and Marketing feels deceptive. If a store advertises "summer sale, 30% off!" for a month, you can reasonably call that marketing spend.

Uber is different. If my flight's leaving in 1h30m, I pull out my phone, open Uber, type in LAX, open Lyft, type in LAX.

Say Uber is $17. Lyft is $20. I pick Uber. If there's a "promotion" going on under the hood to produce that $17 number, is that marketing? It's really just price competition in a cutthroat, negative-unit-economic market.

Given that, Uber laying off 400 people has a dual effect. It's cutting sales spend. It's also creating news to distract from the fact that >50% of the sales spend is really per-ride losses.

Re: Uber Lays Off 400

#216

Post by rrix2 »

freewilly1040 wrote: post #205
dawhizkid wrote: post #30

Earlier quoted context omitted.

The "marketing manager" role at Uber is an operations role and part of a local operations teams. Your main job is not "brand marketing" but attracting new drivers and managing local incentive spend. They've most likely (wisely) decided to centralize those decisions, so not a huge surprise. FWIW, the operations teams (small, local, non-technical teams stationed random cities around the world) built Uber into what it i…

Why is it wise? It wouldn't surprise me if some of the best strategies for this kind of ops is location specific.

Most of Uber's early virality came from local teams being forced to innovate to survive. Ice Cream, Eats, Pool, Puppies, rentals all came from those folks who're now being laid off

Re: Uber Lays Off 400

#218

Post by inflatableDodo »

aresant wrote: post #93
MetalGuru wrote: post #83

Earlier quoted context omitted.

What’s your take on the sustainability of these subsidized rides? Will drivers still drive if this incentive is taken away? What are some of your favorite interesting insights from that data?

(1) What’s your take on the sustainability of these subsidized rides? -=> The gigantic and unsustainable CAC numbers experienced by Uber, Lyft, and others is due to the present level of competition for these drivers & customers. This demand has been inflated for years fueled by Vision Fund and other late stage VC money with their winner takes all approach. This cost has now been handed off (in the USA anyways) to Lyf…

>This demand has been inflated for years fueled by Vision Fund and other late stage VC money with their winner takes all approach.

Do you think it is even possible to have a winner takes all in the global hire car market? The barrier to entry is exceedingly low.

Re: Uber Lays Off 400

#219

Post by UncleEntity »

selectodude wrote: post #203
QuixoticQuibit wrote: post #198

Earlier quoted context omitted.

Doesn’t Uber also lease cars to drivers? I was surprised to see in the Bay Area that so many drivers had fairly new cars. I asked one about it and he said that Uber leased it out. Presumably a portion of the driver’s income goes directly towards the car.

100 percent of their income goes to the car until its paid off for that month, and the interest rate they charge to lease the car is downright usury. $200/wk to rent a Hyundai Elantra that Hyundai leases out at under $200/mo.

The difference being that $200/wk covers everything but gas, lease a car direct from Hyundai and you have a lot more overhead to deal with -- maintenance, insurance, going over the "average miles" in a few months, &etc.

Re: Uber Lays Off 400

#220

Post by UncleEntity »

sarah180 wrote: post #141
quickthrower2 wrote: post #105

Earlier quoted context omitted.

Drug dealers have been known to sell drugs to someone new cheap (perhaps at a loss) to get them hooked, and then once they are hooked jack the price up. Uber is trying to do that with transport.

Do you have a cite for that? I'm skeptical that there are a lot of "I don't know you, have some free drugs" organized loss-leader operations happening. I suspect this is actually mostly propaganda and exaggeration, and that the actual practice—to the extent it exists—is more like offering a small sample to a well-known existing customer.

> Do you have a cite for that?

I have first hand experience that this does indeed happen...

Drug dealers have a desire to expand their customer base just as much as any other small business but have very limited ways in which to do so.

Post reply on HN