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Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

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Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#81

Post by albertgoeswoof »

ovi256 wrote: post #57
albertgoeswoof wrote: post #32

The main value prop for Uber hasn’t changed for quite some time, probably not much since UberX, the innovation there is pretty much done. This puts Governments in the perfect position to disrupt Uber, if they build their own version, feature for feature (let’s face it, it’s a complex app but not that hard to copy) and mandate it on their already regulated taxis / ban uber, their user acquisition costs and marketing c…

Did you just earnestly advocate for a government mandated ride-sharing app ? And you main argument is that if it's government mandated, "user acquisition costs and marketing costs will be zero", so the users get lower fares ? That's brilliantly lawfully evil. Why stop there ? That argument applies for all services. They would all benefit from having zero acquisition costs. Just nationalise everything. Could anything…

If there’s no innovation, why not? Why give returns to shareholders if their investments provide no value?

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#82

Post by mseebach »

emodendroket wrote: post #78
mseebach wrote: post #74

Earlier quoted context omitted.

So they would have preferred it, possibly come to a different conclusion, if Uber would have been likely to be established as a perpetual monopoly?

It's not a normative argument.

So they did not base any decision on the observation?

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#83

Post by mseebach »

emodendroket wrote: post #79
mseebach wrote: post #73

Earlier quoted context omitted.

You only said half of that. That was what you were missing.

I figured the reader could easily infer that there was a different group of people who did believe in predatory pricing.

Yes, and that this group wasn't ardent.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#84

Post by emodendroket »

mseebach wrote: post #83
emodendroket wrote: post #79

Earlier quoted context omitted.

I figured the reader could easily infer that there was a different group of people who did believe in predatory pricing.

Yes, and that this group wasn't ardent.

I meant to contrast "ardent free market defenders," i.e., people in the libertarian end of the spectrum, with those concerned about predatory pricing, many of whom would not consider themselves opponents of the free market. "Ardent" is not, in the first place, pejorative.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#85

Post by moduspol »

emodendroket wrote: post #80
moduspol wrote: post #76

Earlier quoted context omitted.

No--the only reason they can pursue growth into new geographic areas and pursue new business models (like Uber eats) is because they're burning through investors' money. That in no way implies that their rides would not profitable if they were not spending so much on growth. But that's basically every business focused on growth.

Here is a short summary of their earlier series on the topic: https://www.vox.com/new-money/2017/1/9/14194202/uber-lost-22... > In an epic five-part series of blog posts, transportation industry analyst Hubert Horan lays out the case for skepticism about Uber’s hype. In his view, Uber just doesn’t have a cost advantage over its competitors the way Amazon did. Amazon saved money by getting rid of expensive retail stor…

Uber's financials are irrelevant to whether or not the ride sharing business model is sustainable.

The argument cannot be made without claiming the non-driving part of the business cannot be run for the 25% rake they take on every fare. Period. And I don't think anyone is willing to make that claim.

That doesn't mean Uber's a good investment, or Uber is doing it right, or Uber isn't pursuing monopolistic practices, or Uber isn't ripping off drivers, or that Uber isn't doing something sufficiently different that a competitor won't beat them--none of that matters.

All that matters is whether or not the business model is sustainable without burning through investor cash. That was the question. And if someone else beats them doing it while turning a profit, the business model is still sustainable.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#86

Post by UncleEntity »

moduspol wrote: post #22
UncleEntity wrote: post #15

Earlier quoted context omitted.

Unsupportable for the drivers or the company? A driver tears up their car there's a ton of people to replace them but that isn't very supportable on the individual level.

If the individual driver doesn't think they're getting paid enough, that's fine. They don't have to drive for a ride-sharing company. But it's been years now and they've got drivers, so they can't possibly be paying too far below market rate. That means the only way VCs could be "subsidizing" the price is if the remainder of the price (the cut Uber takes) is too low, which is difficult to imagine. We already know wha…

> But it's been years now and they've got drivers, so they can't possibly be paying too far below market rate.

Sure they have drivers still...a whole lot of people who are basically just cashing out the equity on their cars today to make a couple bucks on the side.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#87

Post by clairity »

EpicEng wrote: post #20
clairity wrote: post #11

Earlier quoted context omitted.

yes, that's how capitalism is designed to work. the window in which you can make outsized profits is meant to be temporary so companies can't just rest on their laurels. it's beautiful when it works.

Capitalism is not "supposed to be" a race to the bottom and then the emergence of a single, monopolistic entity. That's far too simplistic. Price and value are a huge component of capitalism, yes, but the general idea isn't "price below what is sustainable by taking in massive amounts of funding until all of your competitors are sunk and then increase prices."

> but the general idea isn't "price below what is sustainable by taking in massive amounts of funding until all of your competitors are sunk and then increase prices."

so there shouldn't be any startups then?

because every startup is unsustainable at the beginning. every startup wants to beat its competition and emerge as the sole winner. every startup wants to raise prices and make more money.

capitalism is an economic system where individuals own (and deploy) the means of production, not the state. capitalism employs competition to ensure those means of production are put to productive uses for the whole economy, not just the individual. profits (or more directly, the accumulation of wealth) are non-productive until redeployed.

that's exactly the way capitalism is designed to work.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#89

Post by Jasper_ »

moduspol wrote: post #54
Jasper_ wrote: post #28

Earlier quoted context omitted.

The expensive part of Uber isn't the SaaS app or even the engineers. It's the overhead of running a law-avoiding lobbying business that explicitly seeks out to just do everything as evil as possible. Hell, Uber tried being a predatory car loan business for quite some time, which you would think would be one of the easiest ways to make surefire money, but they lost on that one too: http://www.businessinsider.com/uber-…

Even if your claim were supportable, it wouldn't explain how competitors not "seeking out to just do everything as evil as possible" have competitive prices.

There can be an argument that Uber's expensive policy-mongering is enabling the competition. Lyft doesn't have to do any lobbying, it just has to lie in its wake while Uber does everything for it pretending to be the nicer company. As long as Uber is out there wreaking regulation havoc, Lyft is happy to sit back and let Uber do that. Perhaps Lyft doesn't want Uber to die, since they're basically the ones spending money to make Lyft viable at all.

Re: Can Uber Ever Deliver? Even After 4Q Cost Cuts, Uber Lost $4.5B in 2017

#90

Post by emodendroket »

moduspol wrote: post #85
emodendroket wrote: post #80

Earlier quoted context omitted.

Here is a short summary of their earlier series on the topic: https://www.vox.com/new-money/2017/1/9/14194202/uber-lost-22... > In an epic five-part series of blog posts, transportation industry analyst Hubert Horan lays out the case for skepticism about Uber’s hype. In his view, Uber just doesn’t have a cost advantage over its competitors the way Amazon did. Amazon saved money by getting rid of expensive retail stor…

Uber's financials are irrelevant to whether or not the ride sharing business model is sustainable. The argument cannot be made without claiming the non-driving part of the business cannot be run for the 25% rake they take on every fare. Period. And I don't think anyone is willing to make that claim. That doesn't mean Uber's a good investment, or Uber is doing it right, or Uber isn't pursuing monopolistic practices, o…

Well, no, the article is about Uber, specifically. If you mean where I said that neither Uber nor Lyft is sustainable, then specifically what I'm referring to is operating with such low prices that rides are money-losers, aiming to raise prices after achieving total market dominance. I do not doubt that ride-sharing is a business model that can make money if prices are high enough to make the business self-sustaining, but Uber and Lyft aren't pitching themselves as such a minor variation on the traditional livery service.
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