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But the finance fundamentals of Uber are truly horrible. Their only explanation for literally lighting billions of dollars in funds on fire to subsidize rides

by CPLX 10y ago

But the finance fundamentals of Uber are truly horrible. Their only explanation for literally lighting billions of dollars in funds on fire to subsidize rides is supposedly to consolidate market share. If they don't have a defensible position and they lose money on every transaction what exactly do they have to show for it?

reallydontask 10y ago
I guess Uber loses money on each sale but makes it up on volume? :)
nodesocket 10y ago
Sure Uber is losing gobs of money, but that's not the most important metric at this stage for them. Look at Tesla, they lost 330 million in 2017 Q1. You absolutely will find bears against Tesla, but that's mainly because of its current $324 share price, not its fundamental business which is losing money.
- riffraff 10y ago
  but then what is the most important metric for Uber? AFAIR they are not growing as fast as they were, and have been all but outlawed in many places already.
  - nodesocket 10y ago
    Actually there are only a handful of places in the US where Uber is banned. Contrary to popular belief (and intentionally propagated by smear campaigns), Uber wasn't banned in Austin TX... they pulled out of that market voluntarily.
    - chillydawg 10y ago
      That's like believing a politician is ACTUALLY resigning to spend more time with their family.
      - Zarel 10y ago
        You are so wrong I don't know where to start. You're talking about a situation where a politician resigns to avoid being impeached or otherwise deposed. That has basically zero to do with Uber and Lyft leaving Austin. We know exactly what laws Austin has (laws are not secret). And it's not like it's remotely unclear what happened: Uber and Lyft left in protest of the law requiring background checks for them. You could speculate that they were trying to strong-arm Austin into repealing that law, but it didn't work. But there's zero reason to believe that they were secretly forced out, unlike the case with the politician, where the incentives are obvious.
        jakubp 10y ago
        If I enter a market, then the market penalizes me for breaching its rules, and I pull out, I am not calling it "voluntary".
    - Tepix 10y ago
      Why talk about the US? It's only one market of many. In many other countries Uber has been banned.
      - jorvi 10y ago
        Yeah, this is a really pervasive attitude on HN and tech in general. By not taking that path WhatsApp has pretty much locked down the international messaging market, so it's a stupid attitude too.
- enraged_camel 10y ago
  >>Sure Uber is losing gobs of money, but that's not the most important metric at this stage for them. Look at Tesla, they lost 330 million in 2017 Q1. Apples and oranges. Tesla is losing money because they are investing massive amounts of capital to improve their supply chain and production capabilities. Uber is losing money because they subsidize rides to try to push competitors out of business. Tesla is actually profitable. Uber? We don't know.
  - grkhetan 10y ago
    "Uber is losing money because they subsidize rides to try to push competitors out of business." ?? I think thats the wrong way to phrase this. Uber is loosing money as Uber and its competitors are giving a lot of incentives to drivers to win business. All of them are loosing money.
    - Tepix 10y ago
      I think the original statement was accurate. And it's not working. Uber will have a rough awakening.
    - pyrale 10y ago
      It is interesting that you and him describe essentially the same mechanism with different words. I would personally call it dumping. In effect, Uber is selling something at a lower cost than it buys, in order to acquire the market.
      - rogerdonaldson 9y ago
        Note that all companies in the ride-sharing market are doing the same thing, not just Uber. Uber in fact looses less money than Lyft per ride.
  - Grue3 10y ago
    Uber doesn't even have competitors in many markets they expanded to. Well, save for traditional taxis.
quonn 10y ago
> literally lighting billions of dollars in funds on fire Figuratively. But even that's not true, since customers have saved real money and spent it elsewhere.
- Joeri 10y ago
  So, uber is really a secret socialist scheme to redistribute wealth from the investors to uber's customers?
  - alokdhari 10y ago
    I should start using Uber more often if that is true.
  - CydeWeys 10y ago
    Heh, it's kind of funny when you look at it like that. It's the opposite of the typical fleecing scheme, wherein a publicly owned company enriches the big guys at the little guys' expense (a la Enron). Uber is doing the opposite, since it isn't publicly traded and only has large rich investors: They're saving lots of little guys' money on car fares at the expense of the few big guy investors.
    - pm90 10y ago
      For now. Their plan, as far as I can see, is to totally dominate the market. Once, and if that happens, they will raise their prices, and once again the little guy's money will be going in the pockets of the big guys.
  - SeanBoocock 10y ago
    On a short enough timescale sure. On a longer one it is exactly the opposite: a play to redefine and own the future of automotive transportation.
- CPLX 10y ago
  Literally. Usage #2: https://www.merriam-webster.com/dictionary/literally https://www.merriam-webster.com/dictionary/literally

by CPLX 10y ago

reallydontask 10y ago

I guess Uber loses money on each sale but makes it up on volume? :)

nodesocket 10y ago

Sure Uber is losing gobs of money, but that's not the most important metric at this stage for them. Look at Tesla, they lost 330 million in 2017 Q1. You absolutely will find bears against Tesla, but that's mainly because of its current $324 share price, not its fundamental business which is losing money.

riffraff 10y ago
but then what is the most important metric for Uber? AFAIR they are not growing as fast as they were, and have been all but outlawed in many places already.
- nodesocket 10y ago
  Actually there are only a handful of places in the US where Uber is banned. Contrary to popular belief (and intentionally propagated by smear campaigns), Uber wasn't banned in Austin TX... they pulled out of that market voluntarily.
  - chillydawg 10y ago
    That's like believing a politician is ACTUALLY resigning to spend more time with their family.
    - Zarel 10y ago
      You are so wrong I don't know where to start. You're talking about a situation where a politician resigns to avoid being impeached or otherwise deposed. That has basically zero to do with Uber and Lyft leaving Austin. We know exactly what laws Austin has (laws are not secret). And it's not like it's remotely unclear what happened: Uber and Lyft left in protest of the law requiring background checks for them. You could speculate that they were trying to strong-arm Austin into repealing that law, but it didn't work. But there's zero reason to believe that they were secretly forced out, unlike the case with the politician, where the incentives are obvious.
      - jakubp 10y ago
        If I enter a market, then the market penalizes me for breaching its rules, and I pull out, I am not calling it "voluntary".
  - Tepix 10y ago
    Why talk about the US? It's only one market of many. In many other countries Uber has been banned.
    - jorvi 10y ago
      Yeah, this is a really pervasive attitude on HN and tech in general. By not taking that path WhatsApp has pretty much locked down the international messaging market, so it's a stupid attitude too.
enraged_camel 10y ago
>>Sure Uber is losing gobs of money, but that's not the most important metric at this stage for them. Look at Tesla, they lost 330 million in 2017 Q1. Apples and oranges. Tesla is losing money because they are investing massive amounts of capital to improve their supply chain and production capabilities. Uber is losing money because they subsidize rides to try to push competitors out of business. Tesla is actually profitable. Uber? We don't know.
- grkhetan 10y ago
  "Uber is losing money because they subsidize rides to try to push competitors out of business." ?? I think thats the wrong way to phrase this. Uber is loosing money as Uber and its competitors are giving a lot of incentives to drivers to win business. All of them are loosing money.
  - Tepix 10y ago
    I think the original statement was accurate. And it's not working. Uber will have a rough awakening.
  - pyrale 10y ago
    It is interesting that you and him describe essentially the same mechanism with different words. I would personally call it dumping. In effect, Uber is selling something at a lower cost than it buys, in order to acquire the market.
    - rogerdonaldson 9y ago
      Note that all companies in the ride-sharing market are doing the same thing, not just Uber. Uber in fact looses less money than Lyft per ride.
- Grue3 10y ago
  Uber doesn't even have competitors in many markets they expanded to. Well, save for traditional taxis.

quonn 10y ago

> literally lighting billions of dollars in funds on fire Figuratively. But even that's not true, since customers have saved real money and spent it elsewhere.

Joeri 10y ago
So, uber is really a secret socialist scheme to redistribute wealth from the investors to uber's customers?
- alokdhari 10y ago
  I should start using Uber more often if that is true.
- CydeWeys 10y ago
  Heh, it's kind of funny when you look at it like that. It's the opposite of the typical fleecing scheme, wherein a publicly owned company enriches the big guys at the little guys' expense (a la Enron). Uber is doing the opposite, since it isn't publicly traded and only has large rich investors: They're saving lots of little guys' money on car fares at the expense of the few big guy investors.
  - pm90 10y ago
    For now. Their plan, as far as I can see, is to totally dominate the market. Once, and if that happens, they will raise their prices, and once again the little guy's money will be going in the pockets of the big guys.
- SeanBoocock 10y ago
  On a short enough timescale sure. On a longer one it is exactly the opposite: a play to redefine and own the future of automotive transportation.
CPLX 10y ago
Literally. Usage #2: https://www.merriam-webster.com/dictionary/literally https://www.merriam-webster.com/dictionary/literally