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Uber reportedly losing $2B per year, with passengers paying 41% of each ride
- temp 10y agoHow is Uber meant to make money? Is the idea to push prices up once (and if) the alternatives die?
- kowdermeister 10y agoYes. Meanwhile they prepare for the transition to the era of driverless cars. Once you dominate the market you can penetrate into markets like pacakge delivery and other industries where moving stuff is still profitable.
- trome 10y agoAmazon and others are trying this with food delivery, package handling, etc, and either the industry is smaller than the newcomers think it is (food delivery) or the industry is already so low cost that it can't be scaled well unless you have a certain amount of volume consistently transiting your infrastructure, which Amazon and DHL have been unable to hit nearly anywhere. DHL at this point is just for same day business deliveries (where they have done an excellent job too!) and Amazon is just trying to break even on this being their own shipping company business, which is not going very well.
- seanp2k2 10y agoAnd in the mean time, us consumers get to take advantage of ridiculous free same-day shipping on low-ish cost items, get cheap taxi rides in many places, etc etc.
- nihonde 10y agoI see this argument a lot, but Uber is spending a lot to effectively lower the barrier of entry/switching by eliminating legal restrictions and changing people's expectation of car services. If I were at Uber, I'd be very worried about customers and/or drivers switching allegiances en masse.
- prostoalex 10y agoThey've tried http://money.cnn.com/2014/08/19/technology/innovationnation/uber-corner-store/index.html http://money.cnn.com/2014/08/19/technology/innovationnation/... https://www.insideretail.com.au/blog/2014/08/26/uber-delivers-shopping/ https://www.insideretail.com.au/blog/2014/08/26/uber-deliver... Seeing how those articles are from 2014 and we're not currently reading glowing reviews of direct-from-store Uber deliveries, my guess is that their unit economics didn't work out.
- soufron 10y agoHow do you dominate a market that is : * with a very low entry cost since anyone car develop the same software that you do now that it's been tested and proven * extremely highly regulated so you're highly dependent on government's good will * live in a world where competition is a religion
- kowdermeister 10y ago> with a very low entry cost since anyone car develop the same software that you do now that it's been tested and proven Cloning the current state of UBER is a really hard task. Anyone cloning them must invest in building brand, convincing drivers and building everything else. Not trivial and all + very expensive to do. UBER is much more than a few UI widgets in a native app. They have 8000 engineers. Do you think they sit all day around and play Doom? > extremely highly regulated so you're highly dependent on government's good will True, but they seem to get away with it in most countries. Many old businesses were unregulated for a time being 100 years ago. > live in a world where competition is a religion Still, close-to-monopolies exists. Google currently dominates search in world where competition is religion.
- kowdermeister 10y agoEdit: 2000 engineers and 8000 repos http://highscalability.com/blog/2016/10/12/lessons-learned-from-scaling-uber-to-2000-engineers-1000-ser.html http://highscalability.com/blog/2016/10/12/lessons-learned-f...
- byoung2 10y agoThe biggest cost is labor, so if they could theoretically shift to self-driving cars soon, fares would pay for more than 100% of ride cost. What that timeframe is would be the $69 billion question. Given that self driving car technology is in its infancy, and will likely require a driver to be ready to take over, they can't ditch drivers anytime soon (unless they make passengers serve as backup drivers?).
- auggierose 10y agoBetting that big on driverless cars sounds like madness to me. But then again, maybe that's why it is the right thing to do?
- OliverJones 10y ago"Labor," huh? Uber's "laborers" also carry the capital cost, operating cost, and risk of the transportation service they provide. They own their vehicles and pay for fuel, maintenance, and insurance. Who covers those costs when no drivers are in the mix? Somebody has to pay for that stuff. It's still true that a big chunk of uber's success in big cities comes from dodging regulations and medallion costs. In other words, they are gypsy cabs with a slick app.
- VLM 10y ago"In other words, they are gypsy cabs with a slick app." My question is how do you lose money doing that? Ignore expensive regulations and licensing, automate the heck out of the backend, should make piles of money not lose. Maybe the losses are some form of hollywood accounting to keep the fire off the whole "ignore regulations" aspect of the business model.
- i__believe 10y agoHire too many expensive engineers?
- peteboyd 10y agoLet's say driverless cars happen in the next five to ten years. I see two scenarios happening - neither do I need uber. First scenario is my local car at my house becomes driverless. I can simply call my car to pick me up from anywhere. It can return home and wait (or go and pick up others as it's own on demand taxi). I now don't need uber at all - even though I use them now. So that is not a good scenario. Second scenario is I am traveling and need a car/taxi as my local car is at home. If so, why would not other people in that city simply allow for their cars to pick me up while they are not in use. Every driverless car is now a taxi. Basically all that is needed is an app and some service where owners subscribe and let their cars be used as a taxi. Perhaps uber controls the app and service as the dominant leader. But I bet there will be a lot of competition in that area with car rental companies, manufacturers, local cab companies, individuals and uber all competing. I suppose the third scenario is that many people do not own a car in the future and we just subscribe to a car service. Perhaps in that area uber is the choice. But perhaps the manuacturers roll their own service too that you subscribe for a time share of a car.
- elmar 10y agowith flying cars #UberElevate https://www.uber.com/elevate.pdf https://www.uber.com/elevate.pdf
- tga 10y agoWhat's an investment of a few billion, Uber is in for the long game. You can to compare them to other big names in the transportation/logistics industry, like Webvan (https://en.wikipedia.org/wiki/Webvan https://en.wikipedia.org/wiki/Webvan)
- CPLX 10y agoThat was moderately clever.
- chris_wot 10y agoGiven their downright ethical behaviour, and utterly confused marketing do-over, does anyone a. Really care, or b. feel surprised? If you run your company in an ethically abhorrent way across the globe from the get-go, is it any wonder you eventualy will go belly up?
- gragas 10y agoLots of unethical companies are very successful.
- kwhitefoot 10y agoPerhaps you could enlighten us by naming them.
- gragas 10y agoIt really depends on your definition of ethical. Volkswagen is unarguably unethical (or at least has been unethical) and profited hugely because of it. Nestle wants to have a monopoly on water. Almost all tradition energy companies (some of them are the biggest, most successful companies in the world) make the rest of the world pay for the negative externalities that they create.
- chris_wot 10y agoVolkswagen found that being unethical was not hugely profitable in the long term.
- spraak 10y agoLots of worse companies have survived and continue to survive.. I don't disagree that there have been problems with Uber, but I don't think there is a direct relationship from ethics to survival, though that would be ideal..
- nashashmi 10y ago
- Roritharr 10y agoThey lose 6,6 shots at net-gain fusionpower per year.
- pjc50 10y agoWhy invest in a benefit to humanity with long-term capital returns when you could buy a global monopoly on taxis? /sarcasm
- presty 10y agohttps://twitter.com/EricNewcomer/status/804470167899996160 https://twitter.com/EricNewcomer/status/804470167899996160
- qwrusz 10y agoThis another "article" that's really just rewriting someone else's blog post. There was already a HN discussion based on a link to the original Naked Capitalism blog post about Uber: https://news.ycombinator.com/item?id=13079023 https://news.ycombinator.com/item?id=13079023 With that said, the actual financial analysis of Uber's numbers in the writeup is so amateurish and frankly incorrect that I can't recommend anyone waste time reading it. I'm not trying to defend Uber's valuation, but this person's math is just wrong. Also the data is stale, just not worth it.
- briffle 10y agoSome examples of how it's math is incorrect?
- mcintyre1994 10y agoThey came to my city recently, I've only used them here once - but this is the only place I can directly compare them to a taxi for the same journey. They were about 10% cheaper for that journey. If they kill taxis and need to break even, we'll be paying over 2x as much then?
- kwhitefoot 10y agoIf this is true then I expect the competition regulators in some countries to start taking action. Such pricing is illegal in some areas because its only reason for existence is to drive out the competition. For instance loss leading in supermarkets in the UK.