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Uber Says Sales Growth Outpaces Losses

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Re: Uber Says Sales Growth Outpaces Losses

#61

Post by prostoalex »

georgespencer wrote: post #22
code4tee wrote: post #19

Uber is demonstrating that they can sell $2 bills for a buck and that there's demand for that. They've not demonstrated they can establish a real business here in what has turned into a pure commodity market. In competitive markets a lot of "me too" competitors pop up all the time. When you see consumers just picking the one that's the cheapest (i.e. with the most VC cash subsidizing the ride) and drivers rocking up…

> Uber is demonstrating that they can sell $2 bills for a buck and that there's demand for that. I think the consensus is that rides are subsidised by around twenty cents on the dollar. Ubers bet is autonomous cars. They pay a 75% fee to the driver. When autonomous fleets launch in the next few years they'll normalise prices at around 50%, meaning your $10 ride costs you $5, and each ride has wafer thin profitability…

> Ubers bet is autonomous cars.

Out of the following contenders:

1) GM (+Cruise Automation), Mercedes or VW with their enormous supply networks, vendor lock-ins, economies of scale and ability to massively ramp up a car production when needed.

2) Tesla with their (allegedly unique) battery storage tech, working manufacturing facility and massive amounts of data harvested from thousands of Tesla vehicles on the roads today.

3) Google/Waymo with their unlimited budget, ability to partner up or buy whoever they choose, and nearly limitless amount of software engineering talent they can suddenly relocate to this project when desired.

4) Avis/Budget, Hertz or other fleet management company that already has a relationship with car manufacturer and can own/maintain/wash/clean/park/dispatch a large number of vehicles on the cheap.

5) Uber.

Why is #5 the strongest candidate? Does the dispatch app that displays available cars on the map create such a strong moat that #1, #2, #3 or #4 will never be able to replicate? Does Uber have a bunch of aces up their sleeve that will allow them to build/buy automobile manufacturing facilities on the cheap? Do they have a know-how of maintaining a large fleet and take care of simple things like changing a tire or cleaning the car after the previous passenger puked in it? And do that at scale?

Re: Uber Says Sales Growth Outpaces Losses

#62

Post by jonathankoren »

georgespencer wrote: post #36
dragonwriter wrote: post #31

Earlier quoted context omitted.

> Ubers bet is autonomous cars. Autonomous cars being generally available lowers the barrier to entry for competitors to Uber, and makes their position worse, not better. Uber's bet is Uber controlling the autonomous car market, which is a different and much harder thing.

> Autonomous cars being generally available lowers the barrier to entry for competitors to Uber, and makes their position worse, not better. Why do you think that's true? Uber is investing heavily in autonomous cars because they want to be very early to the market (hence "Uber's bet is autonomous cars"), and because when you have autonomous cars high utilisation is important, they are in food delivery, and interested…

I think you're underestimating the difficulty of getting a system in tens of thousands of vehicles cheaply and easily.

Do you really think with this many players, that anyone is going to get a huge market? They're not. Uber, even if they manage to survive their lawsuit and build a working system, has plenty of fast followers in the self-driving systems market. So the competition will be at most 24 months behind. Not nearly enough time to acquire and retrofit a fleet of vehicles, and then deploy the fleet in numbers big enough to make a difference to their current cost structure. (Keep in mind the fleet acquisition is a capital expenditure.)

Second, they won't have a large market to distribute this technology, because they don't make cars, and the people that do make cars are already players in this space. I find it hard to believe that Volkswagon, Toyota, or General Motors would simply ditch their internal projects and license with a newcomer that has no manufacturing experience to be a supplier, especially when they themselves would be close to making their own solution which would be able able to be manufactured at scale.

Look, everyone knows that auto manufacturer navigation and entertainment systems suck, yet they still roll their own instead of wide partnering with Apple, Microsoft, Google. My Acura's infotainment system is awkward, slow, and outright user antagonistic, yet there it is.

At most, Uber's self driving kits could be what Alpine is to car stereos. Sure people buy them, but most don't, and if you already have one that works, you probably won't swap it out.

Re: Uber Says Sales Growth Outpaces Losses

#63

Post by prostoalex »

georgespencer wrote: post #33
acchow wrote: post #6

“We’re fortunate to have a healthy and growing business" $2.8bn "adjusted net loss" on $6.5bn revenue is healthy?

The naivety on HN is staggering sometimes. Imagine your parents give you a $10 loan to start a lemonade stand. You think you need six years to make them an above market return on their investment of 2x. You're gonna buy cups, lemons, sugar, and water. In the first year you think you're going to spend $3 and make $0. So you have $7 in the bank. In the second year you think you're gonna spend $2, and make $1. So you ha…

> In the fifth year you think you're gonna spend $6 and make $10. And now you're profitable.

In theory yes, but tracking the the progress of UberChina http://www.cnbc.com/2016/02/18/uber-losing-1-billion-a-year-..., situation in Denmark or Spain, inability to win market share from established players in Russia, India or Malaysia introduce some real-world corrections to an otherwise ideal business plan.

Re: Uber Says Sales Growth Outpaces Losses

#64

Post by jacquesm »

codecamper wrote: post #58
jacquesm wrote: post #30

Earlier quoted context omitted.

> I'm 43 and would like to start a family. Don't wait for success or money if you want to start a family, there really never is a 'right' time.

Why does HN limit the depth of replies? Just to keep the page looking snappy & fresh? That's pretty awesome that you guys thought of hosting videos. The idea escaped me, even after watching photo.net & then Flickr. I was working on an idea back then & the issue was the cost of bandwidth, right? Sure.. put videos on the Internet... but how would you ever pay for that much bandwidth? I guess that's why a Silicon valley…

Well, to be honest, the cost of bandwidth was one of the factors that caused me to nix the project, we were having enough bandwidth problems as it was (we got kicked off the international backbone because the webcams saturated it).

Was the first iteration of Google really written in Python?

That's quite interesting.

Re: Uber Says Sales Growth Outpaces Losses

#65

Post by code4tee »

prostoalex wrote: post #61
georgespencer wrote: post #22

Earlier quoted context omitted.

> Uber is demonstrating that they can sell $2 bills for a buck and that there's demand for that. I think the consensus is that rides are subsidised by around twenty cents on the dollar. Ubers bet is autonomous cars. They pay a 75% fee to the driver. When autonomous fleets launch in the next few years they'll normalise prices at around 50%, meaning your $10 ride costs you $5, and each ride has wafer thin profitability…

> Ubers bet is autonomous cars. Out of the following contenders: 1) GM (+Cruise Automation), Mercedes or VW with their enormous supply networks, vendor lock-ins, economies of scale and ability to massively ramp up a car production when needed. 2) Tesla with their (allegedly unique) battery storage tech, working manufacturing facility and massive amounts of data harvested from thousands of Tesla vehicles on the roads…

Quite simply at the rate Uber is going it will crash and burn long before self-driving cars are a thing at scale

Re: Uber Says Sales Growth Outpaces Losses

#66

Post by slackstation »

hackuser wrote: post #35
slackstation wrote: post #15

Sales growth in commodity product that is loosing money on ever sale? I'll never understand this. Uber won't own the market. There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft. I sold my car over a year ago and use a mix of ridesharing and rentals for transportation. Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and fr…

> There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft. It makes sense, but I'm not sure it works out that way. Many web services have zero lock-in (not including those with a network effect such as Twitter and Facebook) and competitors are a URL away, yet the first ones to gain (mindshare? marketshare?) seem to keep it: Google search, Amazon, etc.

Google has superior search results. FB/Twitter are where all my friends are. Amazon has network effects with Prime that are more than just free next day shipping.

Uber takes me from point A to point B in a virtually indistinguishable way than Lyft or any of the other smaller ride sharing services. The most important thing is the transport, not the comfort, not the branding, not the "Lifestyle Experience". Maybe they will succeed because all of these people want something more out of a ride other than the ride but, for me it's cheap, reliable, fast; in that order. Everything else if fluff.

Re: Uber Says Sales Growth Outpaces Losses

#67

Post by slackstation »

ikeyany wrote: post #41
slackstation wrote: post #15

Sales growth in commodity product that is loosing money on ever sale? I'll never understand this. Uber won't own the market. There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft. I sold my car over a year ago and use a mix of ridesharing and rentals for transportation. Uber and Lyft's greatest competition in my life is a small Google product where people pick up people on their daily commute to and fr…

> There is zero lock-in. They're fixing this. You buy 100 flat fares that you can use over the next 6 months, then you're more or less locked in.

I tried that with Uber. It was great, everywhere I wanted to go for a month for $1.99 per ride $40. I saved a FANTASTIC amount of money that month on Uber and I used the hell out of it. As soon as it was over, I went back to checking Lyft again.

I'm sure they lost even more money on me that month than normal.

Re: Uber Says Sales Growth Outpaces Losses

#68

Post by MichaelGG »

ryanworl wrote: post #9
acchow wrote: post #5

Earlier quoted context omitted.

Can someone explain how GAAP would consider only Uber's share of an UberX revenue, but the entirety of an UberPool as revenue? This doesn't really make sense to me.

Drivers are charged a percentage-fee for Uber's share of the ride in UberX. In Uber Pool, the driver is paid by Uber (as opposed to just through Uber) a variable amount that is not as easy for us on the outside to calculate as the percentage model.

Didn't the article the other day about how Uber is "cheating" drivers show the drivers are paid distance+time and not just a % of the rider's fare?

Re: Uber Says Sales Growth Outpaces Losses

#69

Post by icebraining »

prostoalex wrote: post #63
georgespencer wrote: post #33

Earlier quoted context omitted.

The naivety on HN is staggering sometimes. Imagine your parents give you a $10 loan to start a lemonade stand. You think you need six years to make them an above market return on their investment of 2x. You're gonna buy cups, lemons, sugar, and water. In the first year you think you're going to spend $3 and make $0. So you have $7 in the bank. In the second year you think you're gonna spend $2, and make $1. So you ha…

> In the fifth year you think you're gonna spend $6 and make $10. And now you're profitable. In theory yes, but tracking the the progress of UberChina http://www.cnbc.com/2016/02/18/uber-losing-1-billion-a-year-... , situation in Denmark or Spain, inability to win market share from established players in Russia, India or Malaysia introduce some real-world corrections to an otherwise ideal business plan.

Or maybe their market plan already included those potential misses.

Re: Uber Says Sales Growth Outpaces Losses

#70

Post by icebraining »

slackstation wrote: post #66
hackuser wrote: post #35

Earlier quoted context omitted.

> There is zero lock-in. If Lyft is cheaper this week, I'm riding Lyft. It makes sense, but I'm not sure it works out that way. Many web services have zero lock-in (not including those with a network effect such as Twitter and Facebook) and competitors are a URL away, yet the first ones to gain (mindshare? marketshare?) seem to keep it: Google search, Amazon, etc.

Google has superior search results. FB/Twitter are where all my friends are. Amazon has network effects with Prime that are more than just free next day shipping. Uber takes me from point A to point B in a virtually indistinguishable way than Lyft or any of the other smaller ride sharing services. The most important thing is the transport, not the comfort, not the branding, not the "Lifestyle Experience". Maybe they…

Services like UberPool/Lyft Line do benefit from winner-takes-all effects, as the service that can keep its cars full can offer lower prices.
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