3 ms·

Amazon's free cash flow (at least by their own definition, which I'm not attempting to debate) is tied to operating efficiency above all else. for Uber to pull

by colbyh 9y ago

Amazon's free cash flow (at least by their own definition, which I'm not attempting to debate) is tied to operating efficiency above all else. for Uber to pull the same trick it appears the only place Uber could start making more money at scale would be via autonomous cars, which Travis himself has said is critical to the success of the company: http://www.businessinsider.com/travis-kalanick-interview-on-self-driving-cars-future-driver-jobs-2016-8 http://www.businessinsider.com/travis-kalanick-interview-on-... If that's the case then Uber is a very different company with a very different business model and risks, so it's very tricky to assess it as the same company (at this point). until then it does seem like the "scale at all costs" mentality is currently coming back to bite them.

cocktailpeanuts 9y ago
The "operational cost" is because of competition. It's not like Uber buys up all the cars so they need tons of capital. The reason they need to spend a lot of money is they need to stay afloat until all others die off. Whether this strategy will succeed or not is absolutely not as obvious as you think, because there's of tons of history where companies that took the same road either ended up dominating the market (Youtube) or died off (Most others). I'm not saying "scale at all costs" is good, but I also sympathize with them because there's not much else they can do at this point. As soon as they start charging more and go less aggressive on marketing they will lose to their competition. But they also know there are only a few serious competitors at the moment and they all have the same struggles. So if they manage to stay afloat until the competitors die off (read: get acquired), they will have much better leverage. I'm sure that's what they're shooting for.

3 ms·

Amazon's free cash flow (at least by their own definition, which I'm not attempting to debate) is tied to operating efficiency above all else. for Uber to pull

by colbyh 9y ago

cocktailpeanuts 9y ago
The "operational cost" is because of competition. It's not like Uber buys up all the cars so they need tons of capital. The reason they need to spend a lot of money is they need to stay afloat until all others die off. Whether this strategy will succeed or not is absolutely not as obvious as you think, because there's of tons of history where companies that took the same road either ended up dominating the market (Youtube) or died off (Most others). I'm not saying "scale at all costs" is good, but I also sympathize with them because there's not much else they can do at this point. As soon as they start charging more and go less aggressive on marketing they will lose to their competition. But they also know there are only a few serious competitors at the moment and they all have the same struggles. So if they manage to stay afloat until the competitors die off (read: get acquired), they will have much better leverage. I'm sure that's what they're shooting for.