61–70 of 191 posts
Imagine if we could of used some of that money to educate children, provide healthcare, and other things.
I asked in the recent thread how Meituan could possibly be affording to subsidize restaurant meals to be significantly below cost at restaurant as that didn’t make any sense. Turns out according to this article that it’s simply that. It doesn’t make sense. They lost $17 Billion in 2018 for a shallow moat around an ugly castle. The next recession is going to hit hard, and I’m guessing a lot of the gig economy jobs wil…
I've never heard the expression "for a shallow moat around an ugly castle" before but it's a wonderful picture to paint for just this kind of situation. I'm excited to start incorporating it into my conversations.
As both a startup programmer and having worked in the financial industry, it's really hard to know how companies like these will be viewed by history. The technologist argument is: we are enduring losses, even large ones, in the short term so that we can bring inevitable future tools forward in time (i.e. "Of course everyone can get anything delivered on-demand in the future, so why not now!?") The value-based invest…
> they do genuinely have a lot of users who love the services. Turns out selling $10 bills for $5 is extremely popular. MoviePass did in fact get people go to the movies.
Earlier quoted context omitted.
This isn't about supply & demand, it's about profitability and if these companies are viable long-term. There can be no gig economy jobs if there are no gig economy businesses.
Uber and Lyft can be profitable today. They are in their most mature markets like SF and NYC. If they need to get to profitability they scale back and cut certain cities. That’s it.
How much profit can Uber make if it cuts 'certain' cities?
As both a startup programmer and having worked in the financial industry, it's really hard to know how companies like these will be viewed by history. The technologist argument is: we are enduring losses, even large ones, in the short term so that we can bring inevitable future tools forward in time (i.e. "Of course everyone can get anything delivered on-demand in the future, so why not now!?") The value-based invest…
> they do genuinely have a lot of users who love the services. Turns out selling $10 bills for $5 is extremely popular. MoviePass did in fact get people go to the movies.
We already knew this from basic economic theory, but MoviePass also showed us a different set details.
1) Which movies were so bad they were not worth the time to watch.
2) A proxy for the average price someone would pay for movies that they would watch (since the service is a self-selecting sample of those that would go to many movies if the prices were lowered).
The idea is very stupid as a for-profit business model; it doesn't even have a likely chance for probably being successful. The idea is pretty great if put in to another context, such as one where there's a lottery for the option to buy such a membership and using the collected data as described above.
Earlier quoted context omitted.
It's called malinvestment, and it's tied to monetary policy. When the central bank churns out money, the lower interest rates discourage banks from lending, making it harder for small businesses to collect capital that way. The lower interest rates simultaneously drive investment from bonds into the stock market and real estate. Look up Business Cycle Theory
Is it bad though? I would think new innovative services would be a better place for money to go compared to sticking into some long term bond. At least this way a bunch of people get jobs and servers/compute/CPU/whatever get bought. For every Uber there are dozens if not hundreds of Slack/Splunk/Softlayer type companies that end up with some of that money and employ people. This is somewhat related to how I perceive…
Yes. Hence the 'mal' part.
Investment should be going towards enterprises which produce actual value. If the only way you can produce value is by throwing away money through predatory pricing, then you aren't creating value. And so without any value to create, eventually you blow up and lose a bunch of people their money.
When enough people lose enough money, people stop lending their money so freely and the business cycle starts the contraction phase. Now good enterprises have trouble getting capital, so they delay purchasing all of those cool servers/computers/whatevers. Since the companies selling those things now receive less orders, they order less from their suppliers, etc. Suppliers go under. People lose their jobs. People without jobs spend less, which kills demand further. Fuck. etc.
If it helps to have a misleadingly simplified 1 phrase summary: you can think of malinvestment as taking money from workable enterprises in the future and funnelling it into shitty enterprises now.
Where does the money go for Lyft/Uber? The software platform can't be that expensive amortized across a million+ drivers. It's not like the drivers are overpaid (and in many cases, they are barely (or not even) paid enough to cover costs) What else do they spend it on? Marketing? Bribing...err... lobbying politicians for favorable treatment?
> Where does the money go for Lyft/Uber? Mostly into customer discounts and driver incentives. Both companies are burning billions of dollars on selling people a $10 taxi ride for $5, while paying the driver $12. Once they stop spending their way to market-share, customer demand, and driver supply will drop. There's a price point where they are a viable, profitable business (After all, taxi firms have existed for cen…
That is the key to the "Uber will never be profitable" brigade. Taxi firms are way, way leaner than Uber/Lyft.
Earlier quoted context omitted.
The trends in future of work, particularly remote / non-office work, would favor people being more economical and de-peaking usage. Working at home saves you daycare. It takes a commuter off the road and off public transport. It lets people eat lunch at 11am or 2pm. It lets you build houses instead of empty office buildings. It lets you spend a lot more time with your partner. It keeps you cleaner and healthier. It m…
Lots of claims in this comment I'd love to see backed up. ==Working at home saves you daycare.== Is this true? Most people I know who work remotely don't have enough free time to also watch their kid, they are doing their job. It does save the 1-2 hour round trip of commuting each day. ==It lets people eat lunch at 11am or 2pm.== Can't most people in an office environment already do this? I do. ==It keeps you cleaner…
Commuting is considered one of the _most_ negative parts of a person's day, such that common advice is to seriously consider living closer to work at the expense of other amenities.
It's a strange age to be living in. On the same day I've visited people in a WeWork, been driven around in an Uber, and had food delivered by Deliveroo. All of them blowing a huge load of money for the privilege. If they don't make back this money, it will represent a huge waste of resources. It's private money behind, but I still wonder whether this a reasonable way for the economy to run. For one, it means the litt…
It's called malinvestment, and it's tied to monetary policy. When the central bank churns out money, the lower interest rates discourage banks from lending, making it harder for small businesses to collect capital that way. The lower interest rates simultaneously drive investment from bonds into the stock market and real estate. Look up Business Cycle Theory