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Uber Lays Off 400

nytimes.com

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Re: Uber Lays Off 400

#221

Post by ghaff »

dheera wrote: post #86
goobynight wrote: post #76

Earlier quoted context omitted.

A lot of people use it because it's so obvious that they're operating at a loss. That's why the ride is so cheap. If they brought prices up to what they "should" be, volume would go down or the competition would snatch it up. If Uber wants to take a loss on my ride, I'll be there every time.

... and if they brought prices up to what they "should" be, I'll just use Lyft. Or if that isn't an option, get to my destination on my own.

Lyft is in the same boat--or arguably worse. I fully expect these services will see significant price increases. One of the consequences will be that both the driver and passenger sides of the network will thin out, which probably means they won't work as well in less-dense areas.

Re: Uber Lays Off 400

#222

Post by tanilama »

sambroner wrote: post #10

Hot take: This seems like it's directly related to the IPO itself. I'm imagining this cause and effect: Need more users pre IPO to juice the growth story -> Hire more marketers -> Cut costs post IPO I'm not arguing it's effective, but it's certainly a reasonable outgrowth of the various goals they've had over the last year or two.

This doesn't surprise me per say. The number is nevertheless smaller than the number of engineers they hire, and they only had a handful major services to offer.

Re: Uber Lays Off 400

#223

Post by williamDafoe »

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.

Not exactly true. If you drive full-time for Lyft or Uber you MUST change the oil of your car EVERY MONTH. Leased Hyundai's don't see that kind of stress until a year goes by so the Lyft/Uber car is getting destroyed at least 4x more quickly.

Re: Uber Lays Off 400

#224

Post by williamDafoe »

wp381640 wrote: post #154
bduerst wrote: post #119

Earlier quoted context omitted.

Is it though? Most pizza delivery is an ancillary service to the restaurant itself. Are there very many profitable pizza-delivery only businesses? Also you could argue that for the genre of restaurants where delivery is profitable as an ancillary service (pizza, chinese, etc.), they already offer delivery and there isn't any profitable market for the restaurants where they didn't have it before.

Lookup the stock of Domino's[0] - they've been on a years long tear by scaling delivery and adopting tech In theory this could work better for some food delivery companies as they charge the restaurant rather than produce themselves and run the overhead of stores, etc. [0] http://www.google.com/finance?q=NYSE:DPZ

I think it's pretty obvious that nobody buys a Domino's Pizza because it tastes good! They buy it because someone shows up at your door and gives you food!

Re: Uber Lays Off 400

#225

Post by pandapower2 »

walshemj wrote: post #202
martinald wrote: post #136

Earlier quoted context omitted.

It means cities/metro areas.

Does it really? I would not have said so. I work as a consultant for a major international (I wont say who ) company and they only quote 190 or so "international markets"

They must be counting multiple markets per country. There aren't that many countries in the world and there are a significant number of countries where Uber doesn't operate all. As an example, afaik they no longer operate anywhere in south east Asia.

Re: Uber Lays Off 400

#226

Post by williamDafoe »

MiroF wrote: post #22
Bootwizard wrote: post #15

Does anyone have any idea why Uber isn't profitable? I never really understood that. It's such a ubiquitous service in a large portion of the world. It seems to me that they have a lot of physical growth, so what is happening to their finances?

You literally cannot profitably transport people at the prices they're offering. Uber is just one big bet that the price point of transportation will fall significantly with the advent of self driving and they'll be there to make the money off that margin.

I think this is utter BS. the reason Lyft and Uber are not profitable is that they keep fighting a war for customers with each other! The last time I compared a taxi to a Lyft it was $17 versus $34. Lyft could easily charge 50% more except Uber is trying to kill them by wasting investor money!

Re: Uber Lays Off 400

#227

Post by pandapower2 »

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

Curious what percentage goes to AWS...

Re: Uber Lays Off 400

#228

Post by williamDafoe »

user5994461 wrote: post #143
b_tterc_p wrote: post #65

Earlier quoted context omitted.

Semantics. Cars don’t cost that much to operate. Uber doesn’t cost that much. The portion going to the human take home pay minus car value depreciation and other expenses is small, but a substantial chunk of it.

Cars cost a huge amount of money upfront and require a tremendous amount of maintenance to operate, and that's before we get into insurance and accidents. Right now, all of these are fully on the drivers. This will turn around if Uber rolls self-driving cars worldwide.

Taxi cab companies are incredibly corrupt as they are run like your local cable TV service! With all the customer satisfaction and low prices and quality service that that entails! I believe that Lyft and Uber can easily beat the corruption of the taxi cab market and still provide rides at a good price and profitably.

Re: Uber Lays Off 400

#229

Post by williamDafoe »

jcims wrote: post #98
Scoundreller wrote: post #91

Earlier quoted context omitted.

There's a network effect component for shared/pooled rides. Upstarts will lose a lot if they offer shared prices without matched riders.

Do that many people share rides with strangers in Uber? I never have.

RU kidding Uber pool and Lyft line rides are often cheaper than public transportation!

Re: Uber Lays Off 400

#230

Post by [deleted] »

MegaButts wrote: post #57
cj wrote: post #33

Earlier quoted context omitted.

I mostly agree, except I'd probably frame it a bit differently: > Need more users pre IPO to juice the growth story Or, "VCs tell us we need to spend their investment quickly in whatever areas will generate a hockey stick growth in valuation. We can always fix our business model when we're ready to." > Cut costs post IPO Or, "We no longer answer to our VCs. Now we answer to the public market who cares a lot more abou…

I don't disagree with what you're saying, but I think there is a more cynical take that Uber exemplifies. The VCs do everything they can to drive up the valuation, except make money. They then sell their shares to the public markets for an incredible profit and let them deal with the problem of actually making money. I fear venture capital (and Silicon Valley) is much more about value extraction than value creation t…

[deleted]
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