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Wait, so Uber spent $900 million dollars? I thought that considering they offload so much of the costs of running of the business( EDIT: through having drivers
by rtpg 11y ago
Wait, so Uber spent $900 million dollars? I thought that considering they offload so much of the costs of running of the business( EDIT: through having drivers buy the cars, for example), they wouldn't have such high operating costs.
Though according to this[1] article, Uber's at 3000 employees worldwide. What are those employees doing?
EDIT: For reference, Greyhound's 2014 operating costs were 600 million pounds (50 million in profit).
[1] http://techcrunch.com/2015/05/28/uber-new-hq/#.bb69xm:poPo http://techcrunch.com/2015/05/28/uber-new-hq/#.bb69xm:poPo
- austenallred 11y agoDespite popular belief, apps and communities don't run themselves. Uber is scaling at an ungodly speed, and they're hiring a ton of people to do so. Seriously, look at how many jobs they're hiring for right now: https://www.uber.com/jobs/list https://www.uber.com/jobs/list (then realize they're doing this in hundreds of cities simultaneously, in addition to the hundreds they're already in). I'm actually blown away that they're losing so little, given the amount of revenue they're bringing in. Those are, despite what it may seem, really good numbers. If they can reach scale and capture the market (not trivial)... wow.
- rtpg 11y ago1200 job openings... that's impressive. I agree that you need people to expand, but it never hurts to question how many people you actually need. Nobody denies that megacorps probably have many redundant positions, it's not possible for a company with 3000 employees to have them either.
- austenallred 11y agoMy understanding from talking with people close to the company is that they have a process for opening one city. It's a specific number of people in exact positions (15, if I remember correctly)? They go out and clone the exact process/number of people in each new city. It starts with one person who is responsible for spearheading the operation; that person is supposed to find, hire, and manage the other 14. It's like Uber is opening up franchises of itself. The model has been nailed, so it's just a matter of cloning/duplicating that model. I'm not certain on all of the details, but I find it absolutely fascinating.
- visakanv 11y agoIt actually sounds quite a bit like the "cell group" system that some popular 'megachurches' use.
- onewaystreet 11y agoIt may actually hurt. Uber is in the growth business. They aren't bootstrapping. It may not be worth the time for them to think whether or not they really need to hire someone for x position in x market when they have hundreds of positions to fill in dozens of markets.
- jfoster 11y agoYeah, they likely have decades of amazing margins ahead of them. Doesn't make sense to be too frugal in just the first few years if it puts that growth at stake.
- t0mas88 11y agoUntil they get in price competition with a few others. Imagine Google launching a self-driving taxi business at 20% lower prices than Uber. It would be a bloodbath price competition that Google would win because of their deep pockets and lower costs.
- deleted 11y ago[deleted]
- joshjkim 11y agoGood Eggs just laid of 140 people, more than 50% of it's workforce and shut down 3 out of 4 of their markets - only SF, their HQ, will remain, and even the SF office sustained layoffs. They are Sequoia/Index backed, and raised $21M less than 12 months ago. Good example of a company that asked the question "how many people do we actually need?", with an unpleasant answer =( http://blog.goodeggs.com/ http://blog.goodeggs.com/
- md2be 11y agogood catch - this is one subject that VCs do an awful job with.
- brador 11y agoUber is swimming in capital right now. Their only goal is growth because that maximises cash out ROI for investors. There'll be time for cutting heads and focusing on profit post IPO.
- bradgessler 11y agoAnother thing to keep in mind is that über would have to pay corporate income tax, to the tune of 30%, on any profits made in the US. It seems like they're doing a good job (or are insanely lucky) at reinvesting their gross income back into their company growth while keeping their burn rate relatively low to the $6.9b in raise capital. (e.g. they've only cut $0.5b into their $7b cash stash).
- deleted 11y ago[deleted]
- forrestthewoods 11y agoSubsidized ride fares. Especially when entering a new city for the first X months.
- deleted 11y ago[deleted]
- jfoster 11y agoI haven't seen the data, but I bet a huge percentage of it is subsidized rides. They essentially use free rides as a carrot for users to learn the value of Uber. The great part for Uber is that once they've trained their userbase, that cost largely disappears.
- prawn 11y agoAlso to keep drivers more motivated than they'd otherwise be. I'd say that they're trading VC money with drivers in order to have a dominant position by the time the drivers are no longer required.
- jasonsync 11y agoWalmart tactics. Open in new town. Sell at a loss to get customers. Go on hiring spree. Local business can't survive the mass exodus of customers and employees. Once the only job in town is Walmart and the only store left is Walmart you slowly raise prices and profit.
- danielweber 11y agoWalmart has a profit margin of less than 4%. They are aggressive about controlling costs, which small-time companies can't compete with.
- hoopd 11y agoThey'll compete by taking losses their competitors can't handle until they go out of business. I suppose I'm not disagreeing with you, just pointing out WalMart's competitors are one of the costs they aggressively control :)
- puranjay 11y agoUber is active pretty much everywhere. They're truly aiming to corner the entire global transport market. They're putting in $1B in India alone. When the dust is settled, you're going to get a company that controls the private transport industry in an area that stretches from San Francisco to Kolkata For an industry that was once dominated by small local players, this is truly mind blowing. I don't think there is a single startup that is as obsessed with aggressive growth as Uber
- duncanawoods 11y ago>> controls the private transport industry But is their money buying control of anything? They are not buying control over a resource, like "all the tin mines in China" or something. Is it just spend on market creation that a fast follower can piggy back on for free?
- jtmcmc 11y agono, because of supply on both sides of the exchange.
- rodgerd 11y ago> When the dust is settled, you're going to get a company that controls the private transport industry in an area that stretches from San Francisco to Kolkata Yay! Disintermediation! Smashing monopolies! Oh, wait.
- ebiester 11y agoCan we start calling this Transintermediation instead?
- beagle3 11y agoThey're spending an awful lot for control of a market that is expected to disappear within a few years when self driving cars mature. Of course, they are aware of it and are investing in being a leader in that market - but they're fighting with global giants over there, not the local Taxi outfits.