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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

#71

Post by bob_theslob646 »

ihsw2 wrote: post #55
BinaryIdiot wrote: post #51

Earlier quoted context omitted.

Yeah I am really perplexed with Uber's business model. They can't survive much longer and they can't keep getting injections of cash to stay alive, can they? It's rumored they'll IPO in 2019, if I remember correctly, which means they have to somehow survive until then to at least reach that stage. Are they planning to raise prices? Cut employees? What are they planning on doing here?

The idea is to drag the entire ride hailing industry underwater long enough to drown out competitors, and the trick is to do this without drowning themselves in the process. This is the nature of "predatory" pricing. There is something to be said for volume and if a couple competitors die in the process then Uber's volume can only go up. Unfortunately their competitors have found a variety of ways to keep from being…

Is that really the idea? Do you know how large the ride hailing market is?

I am almost positive the point of subsidizing the price of the rides is to get you addicted/ build up a habit or get you comfortable using the service.

I think they are aware of the competition and are comfortable owning 60+% versus trying to get 80%+.

Their revenue is growing which is still wild despite bad press.

>Unfortunately their competitors have found a variety of ways to keep from being dragged down

Not a bad point but it is highly dependent on the market. In the US, Uber is 4x Lyft in market share.

A common problem drivers cite is that Lyft pays better, but the volume of Uber riders is much much larger.

I am not a fan of Uber, just extremely bitter at poor journalism, hence , I stopped reading at the first paragraph.

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

#72

Post by mark-r »

_jal wrote: post #15
everdev wrote: post #3

Is this abnormal given their size? I remember similar articles about Facebook, Twitter and others.

It certainly allows recycling jokes from 2000. "They may be losing money on every sale, but they'll make it up on volume."

That joke is a lot older than that.

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

#73

Post by dragonwriter »

bob_theslob646 wrote: post #62

> Uber Technologies Inc.’s net loss widened to $1.46 billion in the third quarter, according to people with knowledge of the matter, as the ride-hailing leader struggled to fend off competition, legal challenges and regulatory scrutiny. "according to people with knowledge of the matter.." How is reporting like this legal? Is this not speculation? It baffles me that no fact checking/ benchmarking exists for such a maj…

> How is reporting like this legal?

Why wouldn’t it be?

> Is this not speculation?

No, in the same way that court decisions based on witness testimony are not.

It is, of course, difficult for outside parties to verify the reporting, but journalism has never been legally bound to the standards appropriate to scientific research where reproducibility is key.

> It baffles me that no fact checking/ benchmarking exists for such a major news platform.

The absence of named sources does not imply the absence of fact checking.

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

#74

Post by rimliu »

delecti wrote: post #47
ianai wrote: post #38

Anecdotally, Uber seems to have a large foot print. If it were to fail I wonder how much the economy would be affected? Ie would it start an end of much of the sharing economy - and thus trigger some market corrections?

I suspect there are enough competitors (Lyft, Eat24, etc) that would pick up the slack almost immediately.

And I am sure most places have local competition. In my city there were at least three companies doing the same before Uber even showed up.

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

#75

Post by throwawayjava »

fpisfun wrote: post #46
albertgoeswoof wrote: post #25

Earlier quoted context omitted.

I would LOVE to develop an Uber clone and pitch it to Governments around the world. We could even link them up so you have one unified account for people who cross borders. The government and taxpayer could then take any profit (or operate at a loss / break even if they want to subsidise costs for their citizens). The customer acquisition / marketing costs would be almost zero if the government mandates it as the onl…

Have you seen software developed by the government? Outside of things like NSA spying, military things, etc, it's generally terrible, I doubt there are many governments that could pull this off

> Outside of things like... military things, etc

"Aside from the most impressive engineered systems known to man kind, the government can't do anything right"

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

#76

Post by njj023 »

michaelbuckbee wrote: post #49
chollida1 wrote: post #2

Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…

A third worry: Uber's brand on your resume. At every turn there just seems like increasingly shady stuff coming out of there: covering up data breaches, covering up IP theft, etc.

Every person who I know has left Uber this year is at some company HN would probably agree as "better" (FANGs as backup, startups if more adventurous). So unless you're in the handful caught in the crossfire of these issues, Uber is an extremely strong brand name on a resume.

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

#77

Post by ilamont »

What's to stop Uber from slowing the burn via an increase in base prices? People would still use Uber as long as it's A) more convenient than other transportation B) better quality rides than cabs and C) just a little cheaper than cabs.

There are surely other forms of revenue they can spin up too, but this seems to be pretty straightforward, especially in markets where they have already decimated local taxi firms.

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

#78

Post by hrasyid »

aetherson wrote: post #24
albertgoeswoof wrote: post #18

Earlier quoted context omitted.

Are Uber's costs really in the tech space? It's a complex tech operation for sure, but I wouldn't have thought they could make up much of the 1.5bn USD if they fired a bunch of developers. These bulk of these costs must be in marketing, customer acquisition and discounted fares, right?

So remember that it's not that they burned $1.5B this quarter; they burned $3.5B (net revenue of $2B, $1.5B loss). If their average employee costs them $500,000 a year (surely a generous estimate), then that's $125k per quarter. A $2B spend on salaries would suggest then that they had 16,000 employees (not counting drivers, who aren't part of this equation -- they're the difference between the $9.7B "gross bookings"…

How about driver bonuses? Would those count as expenses, pr as the difference between gross bookings and net revenue? I know sometimes (especially in new markets) Uber let drivers keep 100% and then add bonuses on top of that.

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

#79

Post by misun78 »

ihsw2 wrote: post #55
BinaryIdiot wrote: post #51

Earlier quoted context omitted.

Yeah I am really perplexed with Uber's business model. They can't survive much longer and they can't keep getting injections of cash to stay alive, can they? It's rumored they'll IPO in 2019, if I remember correctly, which means they have to somehow survive until then to at least reach that stage. Are they planning to raise prices? Cut employees? What are they planning on doing here?

The idea is to drag the entire ride hailing industry underwater long enough to drown out competitors, and the trick is to do this without drowning themselves in the process. This is the nature of "predatory" pricing. There is something to be said for volume and if a couple competitors die in the process then Uber's volume can only go up. Unfortunately their competitors have found a variety of ways to keep from being…

"controlled expenditures through higher pricing and "friendlier" demeanor"

- Assuming this refers to Lyft, Lyft's expenses compared dollar to dollar are on-par if not worse than Ubers - https://techcrunch.com/2017/11/14/unpacking-lyfts-projected-...

As long as Uber can keep the cost per ride lower than other competitors, it just needs to wait for the burn to end faster on the competitors side before turning break-even.

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

#80

Post by michaelbuckbee »

njj023 wrote: post #76
michaelbuckbee wrote: post #49

Earlier quoted context omitted.

A third worry: Uber's brand on your resume. At every turn there just seems like increasingly shady stuff coming out of there: covering up data breaches, covering up IP theft, etc.

Every person who I know has left Uber this year is at some company HN would probably agree as "better" (FANGs as backup, startups if more adventurous). So unless you're in the handful caught in the crossfire of these issues, Uber is an extremely strong brand name on a resume.

How long does this remain so though? Is there a point where it starts to look bad (like why didn't you leave earlier?)
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