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Uber Lays Off 400

nytimes.com

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Re: Uber Lays Off 400

#231

Post by williamDafoe »

kaikai wrote: post #193
muzani wrote: post #187

I had an impression that they hired lots of people at very high salaries to build fast and establish a presence all over the world. Now that they have something nice built and are all over the world, it's a great time to cut costs. A lot of the people they've hired probably have some equity and so they're probably just fine getting laid off after the IPO.

Not if they're still in the lockup and can't sell off stock in order to cover the taxes from exercising.

The last few years both companies give out stock grants every month after 1 year so if somebody is laid off they don't lose equity because they already own the equity outright. Lyft even allowed people to keep their vested stock options for seven years after they leave.

Re: Uber Lays Off 400

#232

Post by williamDafoe »

beefman wrote: post #89

They overhired so badly it's an existential threat to the company, and not even from a cost perspective. Should lay off closer to 4000, but that would have negative cultural impact too. So they're stuck. Always slightly underhire so you can be sure you didn't overhire.

Companies that perform layoffs have underperforming stock over the next 5 years. so they are trying to lay off a small enough number of people that they don't appear to be the weakening company that they are....

Re: Uber Lays Off 400

#233

Post by SilasX »

dcposch wrote: post #215
aresant wrote: post #79

Earlier quoted context omitted.

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…

Really good point there. If Uber can charge $1.01 for something it pays $0.99 for, then it might have a sound business model. But if it's in a perpetual state of offering discounts down to $0.98 to keep users buying rides, then it probably doesn't, and to relabel the underpricing as a marketing effort is just obscuring that.

Re: Uber Lays Off 400

#234

Post by kyshoc »

rightbyte wrote: post #192
grecy wrote: post #147

Earlier quoted context omitted.

Marketing runs the world now, because we've reached a point where companies really, really have to convince people to spend their money on whatever useless product is being pushed. Ever notice there isn't marketing for potatoes, bread, rice, etc. ? People buy those things anyway. The latest smartphone? gotta convince everyone to buy it. At my last company engineering spent $10m installing fiber into some remote commu…

15 million? How can local ads for a fiber network be so expensive? Just pay a bunch of kids to hand out flyers. Fiber is usually something people want. If your numbers are correct it sounds like some kickback scam.

> Fiber is usually something people want

According to this survey[0], only 25% of people even know what "fiber-to-the-home" means. Not a perfect proxy for "fiber" itself, but I imagine most non-technical people are not aware of it.

[0]: http://www.bbpmag.com/Features/0714feature-ConsumerSurvey.ph...

Re: Uber Lays Off 400

#235

Post by flukus »

AJ007 wrote: post #181
resters wrote: post #164

Earlier quoted context omitted.

I am not a shareholder, but I think market share is the short term goal. The incentives can be phased out as prices increase a bit after competition cools off.

The big question is driver retention and how much Uber subsidizing drivers is required. Maybe Uber spends 0 extra, drivers drop out of the system, ride prices increase, and drivers return as riders stop using Uber, bringing it to some sort of equilibrium. Maybe not. These retention numbers, for any business that needs returning customers or service providers pretty much make or break all the customer/provider acquisi…

> The big question is driver retention and how much Uber subsidizing drivers is required.

In Australia we've got drivers advertising other services directly to riders. Most of these are probably subsidizing rides to enter the market, but how long can uber continue losing money as competitors try and enter the market?

Re: Uber Lays Off 400

#236

Post by toomuchtodo »

twoheadedboy wrote: post #188
Scoundreller wrote: post #90

Earlier quoted context omitted.

Also helps that pizzas themselves are dirt cheap to make. Anything that makes them expensive is chargeable. Continuous production is easy and cheap, so doubling your volume by adding delivery is achievable with the same kitchen.

"When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the…

Snow Crash never goes out of style.

Re: Uber Lays Off 400

#237

Post by cm2012 »

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

90% of all new ad spend goes to either FB or Google because they actually work for acquiring customers at scale. Every other ad provider squeezes into the last 10%.

Re: Uber Lays Off 400

#238

Post by flukus »

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.

You're suspicions are correct IME. Direct marketing isn't an option for illegal substances, you have to know someone that knows someone, otherwise the police would just wander around all day waiting for offers. Also at the leaf nodes of distribution there is unlikely to be enough cash reserves to be offering free product or even small samples, the leaf nodes are generally users themselves.

Mostly it seems to be propaganda that drugs can be addictive after a single hit, which is complete BS.

Re: Uber Lays Off 400

#239

Post by toast0 »

rightbyte wrote: post #192
grecy wrote: post #147

Earlier quoted context omitted.

Marketing runs the world now, because we've reached a point where companies really, really have to convince people to spend their money on whatever useless product is being pushed. Ever notice there isn't marketing for potatoes, bread, rice, etc. ? People buy those things anyway. The latest smartphone? gotta convince everyone to buy it. At my last company engineering spent $10m installing fiber into some remote commu…

15 million? How can local ads for a fiber network be so expensive? Just pay a bunch of kids to hand out flyers. Fiber is usually something people want. If your numbers are correct it sounds like some kickback scam.

Fiber might be something people want, but it's also something people have been falsely sold so many times. In the late 2000s, my cable company said they were putting in fiber, and i got a cable modem. AT&T called adsl2 (and sometimes simply rebranded adsl1) U-verse and sent people around neighborhoods saying it was fiber.

How are normal people supposed to know fiber to the home is actually fiber?

Re: Uber Lays Off 400

#240

Post by toast0 »

freewilly1040 wrote: post #209
projektfu wrote: post #168

Earlier quoted context omitted.

The big concerns are whether drivers will continue to accept the pay they are offered. In 2018 they spent $837 million on excess pay to get drivers to accept certain trips. Insurance costs are also high, a large portion of their revenue. Assuming their chart is representative of an average booking, $1 in excess incentives corresponds to a $10 booking. If so, 15-20% of their bookings appear to produce no revenue and c…

What sorts of trips are not profitable for them?

Trips where they pay the driver more than the customer pays.

They are constantly running promotions to encourage drivers. They are constantly running promotions to encourage riders.

It's not clear that they make very much if riders and drivers are at the regular rate either. They've got to pay the merchant fees for all the card not present transactions, and maybe platform fees to apple and google, too?

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