4 ms·

My understanding is that in mature markets, Uber is profitable. The issue is that it takes a few years to become profitable in a market and so it's extreme grow

by ylhert 10y ago

My understanding is that in mature markets, Uber is profitable. The issue is that it takes a few years to become profitable in a market and so it's extreme growth pushes out profitability on the whole for a few years

duaneb 10y ago
Not before destroying any competition with cripplingly low rates. That's the problem: I can't hail a goddamn taxi anymore, despite it being cheaper by any back of the envelope calculation for society as a whole.
- MarkPNeyer 10y ago
  > despite it being cheaper by any back of the envelope calculation for society as a whole. Can you explain this? Not challenging, just curious.
  - deleted 10y ago
    [deleted]
  - monk_e_boy 10y ago
    You know.... a monopoly controlling drivers is... um... some how better. In all seriousness, Uber drives down price to a point that no one can really figure out if being an uber driver is profitable. Uber makes money, but none of that proffit is spent in the local economy. Capitalism doesn't work at that scale... look at the loss they can endure, compare that to a local cab firm, or even somewhere like NY.
  - flukus 10y ago
    The gig economy is going to be terrible for society, everyone is a couple of bad reviews away from the street.
- carb 10y ago
  What's the back of the envelope calculation?
- aianus 10y ago
  > despite it being cheaper by any back of the envelope calculation for society as a whole. How is it 'cheaper' to manufacture extra yellow cars and have them drive around aimlessly searching the streets for fares vs. hitching a ride with my neighbour who drives for Uber part-time with the personal car he'd have bought anyways?
  - temp 10y ago
    >drive around aimlessly searching the streets for fare That's not how Taxis work in my neck of the woods. I call a company, get a cab at the time I want it. Or I use their app or website, share my location, and get a cab arriving at the time I want it to. And yes, they still pay the driving a living wage, take care of the insurance and don't treat me like crap unlike Uber.
revelation 10y ago
You mean once they have burned VC money to price dump transportation in a given market, they start charging higher rates to make money and run pet R&D projects.
nstj 10y ago
From the article: > Even in the U.S., Uber's home market, the company continues to lose money. After turning a slight profit in the in the first quarter of this year, Uber lost $100 million in the U.S. in the second quarter. The loss increased in the third quarter, the person said. I thought that they'd turned the corner in the US too, but go figure. I guess the claim that Travis makes about driverless cars relates to their profit margin as much as it does to their long term competitive advantage [0]: > Developing an autonomous vehicle, he adds, “is basically existential for us.” [0]: https://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on https://www.bloomberg.com/news/features/2016-08-18/uber-s-fi...
- ylhert 10y ago
  The US is not a mature market for Uber, it still includes a huge amount of cities where Uber is still relatively new and has yet to reach profitability. My understanding is that the profitable markets are places like SF or LA where Uber has been around for 5 years
  - nstj 10y ago
    Interesting - didn't know you were talking on a per city basis. Anything to back up the claim of profitability in these cities?
  - pfarnsworth 10y ago
    Earlier this year, the CEO said the top 30 cities earned > $1B in profits for Uber.
whitepoplar 10y ago
Yes, but how profitable? Enough to support their valuation of $75B?

by ylhert 10y ago

duaneb 10y ago

Not before destroying any competition with cripplingly low rates. That's the problem: I can't hail a goddamn taxi anymore, despite it being cheaper by any back of the envelope calculation for society as a whole.

MarkPNeyer 10y ago
> despite it being cheaper by any back of the envelope calculation for society as a whole. Can you explain this? Not challenging, just curious.
- deleted 10y ago
  [deleted]
- monk_e_boy 10y ago
  You know.... a monopoly controlling drivers is... um... some how better. In all seriousness, Uber drives down price to a point that no one can really figure out if being an uber driver is profitable. Uber makes money, but none of that proffit is spent in the local economy. Capitalism doesn't work at that scale... look at the loss they can endure, compare that to a local cab firm, or even somewhere like NY.
- flukus 10y ago
  The gig economy is going to be terrible for society, everyone is a couple of bad reviews away from the street.
carb 10y ago
What's the back of the envelope calculation?
aianus 10y ago
> despite it being cheaper by any back of the envelope calculation for society as a whole. How is it 'cheaper' to manufacture extra yellow cars and have them drive around aimlessly searching the streets for fares vs. hitching a ride with my neighbour who drives for Uber part-time with the personal car he'd have bought anyways?
- temp 10y ago
  >drive around aimlessly searching the streets for fare That's not how Taxis work in my neck of the woods. I call a company, get a cab at the time I want it. Or I use their app or website, share my location, and get a cab arriving at the time I want it to. And yes, they still pay the driving a living wage, take care of the insurance and don't treat me like crap unlike Uber.

revelation 10y ago

You mean once they have burned VC money to price dump transportation in a given market, they start charging higher rates to make money and run pet R&D projects.

nstj 10y ago

From the article: > Even in the U.S., Uber's home market, the company continues to lose money. After turning a slight profit in the in the first quarter of this year, Uber lost $100 million in the U.S. in the second quarter. The loss increased in the third quarter, the person said. I thought that they'd turned the corner in the US too, but go figure. I guess the claim that Travis makes about driverless cars relates to their profit margin as much as it does to their long term competitive advantage [0]: > Developing an autonomous vehicle, he adds, “is basically existential for us.” [0]: https://www.bloomberg.com/news/features/2016-08-18/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on https://www.bloomberg.com/news/features/2016-08-18/uber-s-fi...

ylhert 10y ago
The US is not a mature market for Uber, it still includes a huge amount of cities where Uber is still relatively new and has yet to reach profitability. My understanding is that the profitable markets are places like SF or LA where Uber has been around for 5 years
- nstj 10y ago
  Interesting - didn't know you were talking on a per city basis. Anything to back up the claim of profitability in these cities?
- pfarnsworth 10y ago
  Earlier this year, the CEO said the top 30 cities earned > $1B in profits for Uber.

whitepoplar 10y ago

Yes, but how profitable? Enough to support their valuation of $75B?