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Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

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Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#241

Post by CaptainZapp »

trhway wrote: post #201
T2_t2 wrote: post #182

Earlier quoted context omitted.

Except... Growth. The (buzzword warning) hyper-growth startup model is in essence 2X revenue, 1.5X costs. Repeat until inevitably profitable - and I say inevitably because with enough time, 2X revenue, 1.5X costs gets to profitable. The only variable there is having a long enough runway. Uber seem, from the financial data I have seen, to be sticking to that playbook down to the 3rd decimal place (exaggeration for eff…

>The (buzzword warning) hyper-growth startup model is in essence 2X revenue, 1.5X costs. Repeat until inevitably profitable - and I say inevitably because with enough time, 2X revenue, 1.5X costs gets to profitable. The only variable there is having a long enough runway. it is like gambling with doubling (or even tripling) down each time - with enough time you will inevitably win and as result will reap a huge profit…

  Now if just somebody write me a blank check backed by an unlimited bank account... On practice though, even if got that check - what if the casino can't match my next 3x bet?
It will never come that far. Even if you truely have no limits (and with doubling and trippling you arrive at mighty high amouts, even if you start at $1) casinos have themselves covered.

It's called a table limit. At one point you just can't raise your bet anymore.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#242

Post by microtherion »

matt4077 wrote: post #202
T2_t2 wrote: post #182

Earlier quoted context omitted.

Except... Growth. The (buzzword warning) hyper-growth startup model is in essence 2X revenue, 1.5X costs. Repeat until inevitably profitable - and I say inevitably because with enough time, 2X revenue, 1.5X costs gets to profitable. The only variable there is having a long enough runway. Uber seem, from the financial data I have seen, to be sticking to that playbook down to the 3rd decimal place (exaggeration for eff…

> Uber seem, from the financial data I have seen, to be sticking to that playbook down to the 3rd decimal place Except, if you check the linked article, you'll find that bookings grew 11%, revenue grew 21%, and losses grew 38%.

And YoY (backing out the Q4 numbers to Q3 numbers), bookings grew 80%, revenue grew 20%, and losses grew 56%. Assuming that "costs" are revenue+loss, costs grew 34%, still faster than revenue.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#243

Post by zaphar »

CaptainZapp wrote: post #241
trhway wrote: post #201

Earlier quoted context omitted.

>The (buzzword warning) hyper-growth startup model is in essence 2X revenue, 1.5X costs. Repeat until inevitably profitable - and I say inevitably because with enough time, 2X revenue, 1.5X costs gets to profitable. The only variable there is having a long enough runway. it is like gambling with doubling (or even tripling) down each time - with enough time you will inevitably win and as result will reap a huge profit…

Now if just somebody write me a blank check backed by an unlimited bank account... On practice though, even if got that check - what if the casino can't match my next 3x bet? It will never come that far. Even if you truely have no limits (and with doubling and trippling you arrive at mighty high amouts, even if you start at $1) casinos have themselves covered. It's called a table limit. At one point you just can't ra…

That is exactly his point actually. It's an example of why the model breaks down in reality despite the math working in theory. That's why it's called gambling whether it's a casino or a startup.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#244

Post by eric_h »

jrs95 wrote: post #149
Marazan wrote: post #127

Earlier quoted context omitted.

Reinvesting for growth is a terrible euphemism for subsiding taxi fares. When they flip the switch they become more expensive that a regular mini-cab. Customers will leave in droves, drivers will leave in droves. There s no loyalty to a middleman.

But when customers leave in droves, they can respond by reducing infrastructure and doing layoffs, and then they'll probably still be profitable. With Uber, I think there is some degree of loyalty just because of the ubiquity and convenience. Plus, I imagine their prices will be more or less the same as a taxi since they don't have the expense of dealing with the regulatory overhead (since they just blatantly ignore…

> (since they just blatantly ignore the law instead)

This is not true for all markets in which Uber operates - in NYC for example, uber cars are all registered with the TLC.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#245

Post by adjkant »

njj023 wrote: post #101
adjkant wrote: post #34

Earlier quoted context omitted.

When looking at SNAP vs UBER, I think that this negative publicity will stop that first positive bump. Each negative scandal after will hit their stock hard, along with each quarter report. I do agree it will happen, but I think most everyone will see through it. Given their burn rate and their IPO scheduled for 2019, they will still struggle to get there even with the incoming round. At this point it's hard to find…

Winners besides Lyft? Their financials are on-par if not worse - https://techcrunch.com/2017/11/14/unpacking-lyfts-projected-... Part of Uber's increased losses are stemming directly from massive burn on Lyfts end to try and capitalize on Uber's problems.

How is 1.5B a quarter on-par or worse than 750M per year?

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#246

Post by astrodust »

mrgordon wrote: post #235
astrodust wrote: post #86

Earlier quoted context omitted.

That seems like an absurdly high number of employees for what's basically a taxi company, especially considering their drivers aren't employees. That's roughly as many employees as Apple had in 2005, a company that was making laptops, desktops, servers, wireless routers, portable audio players, and entire operating systems.

Self driving cars and operations eat a lot of staff

It's not even clear why self-driving is an important pursuit at this point for a company like Uber. They're going to blow through billions on this and someone else will come in with a solution that just works.

I doubt a scrappy "startup" like Uber can beat companies like Toyota, Volkswagen, GM, Google or even Apple to market with a viable, certified self-driving car. They have, at best, a few billion left to dump into that venture. Those big companies could throw in ten times that if they wanted to.

Maybe someone needs to disrupt Uber. Go Lyft!

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#247

Post by hrasyid »

bob_theslob646 wrote: post #240
hrasyid wrote: post #230

Earlier quoted context omitted.

> The rides that I have taken are not subsidized. Maybe it's not statistically significant but I have yet to see the subsidy in the major cities that I have traveled in. How do you know that?

The prices are higher per mile this year.( I have kept all my digital receipts for business travel purposes) How do you know they are subsidized?

Because the drivers told me that they keep 100% and then Uber pay them bonuses on top of that.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#248

Post by LrnByTeach »

newaccount88 wrote: post #209
jdmichal wrote: post #188

Earlier quoted context omitted.

The IRS puts "variable costs" at about 14 cents per mile. So, yes they may do better, but not significantly better. Also, electric means either battery swaps or significantly longer refueling time. Not a problem for commuter cars with downtime anyway. But for a 24/7 business, that becomes more impactful. https://www.irs.gov/newsroom/2017-standard-mileage-rates-for... "The standard mileage rate for business is based o…

Literally none of the old assumptions will apply. Let's go through some of them. 1. Maintenance. Electric vehicles require far less maintenance than ICE vehicles. (First thing I found on Google: https://insideevs.com/ev-vs-ice-maintenance-the-first-100000... ) 2. Vehicle size. Once these systems are up and running, do you think Waymo & Uber, once their systems reach any level of maturity, are going to send you a 4 pe…

Your points covers the entire scenario with self-driving & electric cars.

I totally envision the points mentioned. I put the $$ figures for on-demand hail service subscription a month ago, on a HN thread as follow .

https://news.ycombinator.com/item?id=15644680

2021 : Electric Self-driving on-demand FLEET Car 1000 miles/month SUBSCRIPTION from Google, DiDi, Uber, Renault/Nissan,Tesla, VW,Toyota,GM for $400/month

2024 :same 1000 miles/month SUBSCRIPTION $200/month

------

> Literally none of the old assumptions will apply. Let's go through some of them.

> 1. Maintenance. Electric vehicles require far less maintenance than ICE vehicles. (First thing I found on Google: https://insideevs.com/ev-vs-ice-maintenance-the-first-100000...)

> 2. Vehicle size. Once these systems are up and running, do you think Waymo & Uber, once their systems reach any level of maturity, are going to send you a 4 person vehicle to pick up 1 person? This reduces:

a- the capital cost of the vehicle b- its cost of maintenance (less parts, etc) c- the amount of energy required to get from point A to point B

Which brings me to...

> 3. Price of electricity. Waymo, Uber, et al will get their electricity at wholesale rates.

> 5. Bulk-buying 1,000,000 vehicles. No dealers, no dealer commissions, zero customizations, less parts, smaller vehicles, no car manufacturer marketing budget...

> 6. Maintenance scaling. The need to scale maintenance operations country-wide is going to lead to its own interesting effects. With a hard limit on the types of vehicles in a network, most cleaning and general maintenance will, in time, be doable by human-monitored robots.

> I'd hesitate to guess at the effects of all of the above, but it's not much of a stretch to anticipate an additional 50% reduction here, barring any unforeseen taxes, of course.

> You might pay more for the network with great coverage and lux vehicles.

> You might pay less for the crappy network with dirty cars and plastic seat buckets. Etc.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#249

Post by njj023 »

adjkant wrote: post #245
njj023 wrote: post #101

Earlier quoted context omitted.

Winners besides Lyft? Their financials are on-par if not worse - https://techcrunch.com/2017/11/14/unpacking-lyfts-projected-... Part of Uber's increased losses are stemming directly from massive burn on Lyfts end to try and capitalize on Uber's problems.

How is 1.5B a quarter on-par or worse than 750M per year?

An apples to apples comparison would standardize across:

1. GAAP v.s. non GAAP. Different media sites are reporting between 1.5B and 750B for Uber because of this discrepancy.

2. Timelines - Uber numbers are from Q3. Lyft from H1

3. Size discrepancies - it's better to look at loss per trip given that Uber is far bigger.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#250

Post by malandrew »

wpietri wrote: post #231
malandrew wrote: post #213

Earlier quoted context omitted.

Yes, and which were started after 2013 or even as early as 2013? The truth is that all the viable competitors are likely already out there and it's going to be very very difficult to replicate what these incumbents have without burning ridiculous amounts of capital. If the Softbank deal closes, we'll likely see a wave of consolidation with Softbank orchestrating acquisitions by Uber. It's very common for relatively y…

Just looking at the ones active in Austin, Fasten, Chariot, and InstaRyde were started in 2014; Fare in 2015; Ride Austin in 2016. Ride sharing is essentially a local business with very low barriers to entry. You don't need to replicate what the incumbents have right away. You just need a modest number of drivers (who can also be driving for the incumbents) and a modest number of customers.

Do you have any data to support the position that any of those three are not irrelevant from a market share by rides given or by industry profits?
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