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Why I don't believe in Uber's Success

blog.benjamin-encz.de

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Re: Why I don't believe in Uber's Success

#341

Post by andrewprock »

ghaff wrote: post #306
rcach001 wrote: post #273

Earlier quoted context omitted.

Great contrast – and you're not really saying that Uber is not building infrastructure but that one is happening faster than the other one: 1) Uber: a) subsidize sales b) build infrastructure 2) Amazon: a) build infrastructure, b) grow sales at a sustainable rate even if it takes 20 years. I think Zappos had the same business model. But we'll see.

Zappos is an Amazon subsidiary even if it does operate quasi-independently (and quirkily from a management perspective). It looks a lot more like Amazon though with generally far less emphasis on building out infrastructure. Ultimately it's sort of a niche because of the nature of selling shoes online.

Zappos is now an Amazon subsidiary. It grew sustainably for a decade before Amazon acquired it.

Re: Why I don't believe in Uber's Success

#342

Post by sbuttgereit »

CoffeeDregs wrote: post #52

The commercial airline industry has lost money over the whole of its existence. If I'm flying from NYC to DAL, I'm flying the cheapest carrier (with a slight nod to Frequent Flyer programs). I'm not sure how Uber, Lyft, etc are any different than Southwest, American, etc. Cab companies (which I hate) and airlines saw this years ago and promoted regulations to protect their fees (and, thereby, wages). Airlines lost th…

Uh... Airline deregulation came to pass under Carter, not Reagan. Yes, that breaks some of the left/right stereotypes that drive modern political discourse... But what can I say? It was a more pragmatic time.

Re: Why I don't believe in Uber's Success

#343

Post by readhn4fun »

I live near large city. I can't afford to live IN the city ( because paying 3000$ rent is stupid ). Now I have to commute. I have to Have a car because other options waste too much time. I got a 16 year old reliable toyota that I paid 3k for years ago. I don't see Uber doing anything financially positive for me anytime soon.

Re: Why I don't believe in Uber's Success

#344

Post by jacques_chester »

vitaminbandit wrote: post #67
Keyframe wrote: post #39

Earlier quoted context omitted.

Question is, who are competitors with same scope as them? I don't know any. They are already in position to just switch over. Others would have to build their network first. It's a running start that depends on them playing their cards right.

As far as war chest goes, Uber basically has no competition. As far as their routing and vehicle management algorithms go, there already exist companies with more sophisticated routing systems than Uber. Uber's routing algorithm is basically nearest neighbor search at a massive scale - which is perfect for the on-demand nature of their business; the companies that I'm referring to can support on-demand routing as wel…

> As far as war chest goes, Uber basically has no competition.

Google has more money coming in half year than Uber has ever raised, and it's from profits.

The major car companies also have billions of dollars of revenue and collectively they hold hundreds of billions, possibly trillions, of dollars of fully depreciated assets.

Re: Why I don't believe in Uber's Success

#345

Post by ghaff »

smnplk wrote: post #337
dinkumthinkum wrote: post #227

Earlier quoted context omitted.

I think you're being too kind to the parent. This is true for a very small subset / archetype of people. The majority of the country has much different situations and desires than just walking to ALDI.

Had to lookup ALDI on youtube. Their logo looked familiar to Hofer brand, then I found the wiki explanation. Aldi Süd operates as Hofer in Austria and Slovenia.[1] [1] https://en.wikipedia.org/wiki/Aldi

They're a different branch of the family that owns Trader Joe's. In the US they're a super-discount food store--think in terms of a strategy for a limited inventory of canned goods and things in that vein intended to undercut Walmart.

Re: Why I don't believe in Uber's Success

#346

Post by pfarnsworth »

__derek__ wrote: post #326
pfarnsworth wrote: post #278

Earlier quoted context omitted.

You're naive if you don't think Uber already has audited financials. Investors wouldn't dump billions in if they didn't.

JP Morgan Chase and Deutsche (not exactly the model for integrity) have recently opted not to work with Uber because of its lack of disclosure.[0] Besides, take another look at that table above: not a confidence-inspiring list. [0] https://www.bloomberg.com/news/articles/2016-11-07/banks-sai...

There's also several links to sites that already have the financial data from Uber. Either you believe that those leaked financial data is real, or you believe they are fake.

If you believe the numbers and the scope of the loss, are you saying that they would have that data and allow that data to leak, but they wouldn't provide it to JP Morgan or DB?

Re: Why I don't believe in Uber's Success

#347

Post by ghaff »

andrewprock wrote: post #341
ghaff wrote: post #306

Earlier quoted context omitted.

Zappos is an Amazon subsidiary even if it does operate quasi-independently (and quirkily from a management perspective). It looks a lot more like Amazon though with generally far less emphasis on building out infrastructure. Ultimately it's sort of a niche because of the nature of selling shoes online.

Zappos is now an Amazon subsidiary. It grew sustainably for a decade before Amazon acquired it.

Yes. In many ways they grew more in the vein of many traditional mail order catalogs than Amazon.

Re: Why I don't believe in Uber's Success

#348

Post by brobinson »

ahuja_s wrote: post #21

I live in Singapore and Uber is a little cheaper than the excellent cab services which operated here even before Uber. There is a big competitor to Uber here called Grab. I switched to Uber because their service is good, drivers are gracious and cars are nice and they give me good offers. Last year I took 300 Uber rides, never once taking the usual Comfort Delgro Cab because their drivers suck. If prices were the sam…

I know Singapore has very high car taxes, but is 300+ rides really less expensive than owning a vehicle yourself?

Re: Why I don't believe in Uber's Success

#349

Post by boto3 »

catcow wrote: post #315

I've been an Uber driver for 2-years in a metro-area of about 1-million people. The first year was rough, as Uber aggressively lowered rates and royally screwed me over income-wise. But now, I'm making more than ever thanks to the service scaling. The author of this blog post admits that he hasn't run any numbers, and his conclusions make that obvious. I've run the numbers, and I make part of my living as an Uber dri…

"Uber has created more jobs faster than any company in history"? Walmart currently employs more than 1M people right now, in the US.

Re: Why I don't believe in Uber's Success

#350

Post by epistasis »

intrasight wrote: post #318
epistasis wrote: post #266

Earlier quoted context omitted.

I think the doubts about Amazon were different though. The doubt was whether they would succeed at their goal, rather than whether the goal would actually constitute financial success. Wal-mart for the digital era is clearly a successful position, and Amazon didn't subsidize their product to the degree that Uber has had to.

I respectfully disagree. Amazon MASSIVELY subsidized their service. It was commonly stated, and I believe true, that shareholders were paying for that critical 2-day free shipping.

In, say, 2006, $884M was spent on shipping and $567M in shipping revenue[1], so there was a subsidy of $317M. This was in total revenue of $10.71B[2]. That's a 3% subsidy, and is within a profit margin.

Uber is a bit harder to pin down from a quick google [3]. I'm seeing $750M loss in the recent quarter, which are "largely" attributed to driver subsidies by third parties, but Uber isn't talking. Let's say $500 as a rough estimate, which is 10% of the $5B in bookings that quarter.

So I guess Uber's subsidies aren't as high as I thought, but are still significantly higher than Amazon's. They both operate in cut throat industries with slim margins. Whereas Amazon invested in warehouses and their infrastructure. Uber may have something up their sleeve, and I hope they do, but it's not clear for an outside observer how they are anywhere as likely as Amazon was to have profits to justify their valuation.

[1] https://www.statista.com/statistics/236503/amazons-annual-sh...

[2] http://www.wikinvest.com/stock/Amazon.com_(AMZN)/Data/Revenu...

[3] https://www.bloomberg.com/news/articles/2016-08-25/uber-lose...

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