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Uber Posts $708M Loss as Finance Head Leaves
- untilHellbanned 9y ago"Revenue up 18% Loss down 1/3rd 22x+ the revenue of $snap So much important work left to do, but congrats to the @Uber team." https://twitter.com/jason/status/870059383765389312 https://twitter.com/jason/status/870059383765389312
- guelo 9y agoWhy the silly dig at Snap? If you subtract Snap's employee stock program it lost $200m last quarter which is a lot less than Uber's $700m loss.
- arthurcolle 9y agoUber might actually exist in 10 years, the dig at Snap seems extremely fair game in this frothy environment
- guelo 9y agoAt their respective current burn rates they both probably have 3-4 years left.
- wand3r 9y agoThis is a tweet from Calacanis. I think he invested in Uber. I have no idea. Guess is that they are a recently public tech company that is an app w/ network Dynamics.
- bactrian 9y agoUber is his one investment that people other than himself consider successful. He wrote a book about what a genius he is for investing in a hundred companies and having one of them be Uber. He's going to have to revise the book to talk about his coffee machine startup.
- deleted 9y ago[deleted]
- rattray 9y agoReuters (non-paywall): https://www.reuters.com/article/us-uber-results-idUSKBN18R3EQ https://www.reuters.com/article/us-uber-results-idUSKBN18R3E...
- zeusk 9y agowsj Article Unlock bookmark: javascript:window.location.href='http(s)://m.facebook.com/l.php?u='+encodeURIComponent(window.location.href); remove the '(' and ')' around s in https
- kcorbitt 9y agoHas anybody published an estimate of what Uber's cash reserves might look like, or how long they can remain solvent at these insane burn levels? Losses of $3B/year seem like they would put almost anybody out of business.
- SubFuze 9y agoFrom the article: "The company, which has raised some $15 billion in equity and debt funding, said it still has $7.2 billion of cash left on hand, about the same as it had at the end of last year."
- ProfessorLayton 9y agoI wonder how they'll be able to raise more cash with all this turmoil within the company. Even a 15B [1] cash hoard can't last much longer at this burn rate. [1]https://mobile.nytimes.com/2016/06/21/business/dealbook/why-uber-keeps-raising-billions.html https://mobile.nytimes.com/2016/06/21/business/dealbook/why-...
- mylons 9y agoassuming nothing changes, don't they have 10 more quarters at this burn rate?
- rtx 9y agoPeople are standing in line.
- dx034 9y agoPeople who are willing to take a substantial share at a $70bn valuation? I'm not so sure about that. An IPO could be their only chance to raise significant amounts of capital. They'll need to use the time they have with their current cash balance (~2 years) to look good enough for an IPO.
- georgeecollins 9y agoSo for $70b I can buy a wallet that pays me -2.8b per year? Not to be negative, but it sounds like it is time for a down round.
- nullnilvoid 9y agoRevenue: $3.4B Loss: $708M Growth: 18% Quarter over quarter Cash to burn: $7.2B With the current burn rate, Uber can burn another 10 quarters.
- skinnymuch 9y agoWell the loss this past quarter went down. Though yeah, it doesn't seem like they are looking to break even any time soon.
- IAmGraydon 9y agoThat would be at 0% growth, which is unlikely.
- dx034 9y agoIf much of the growth comes from Pool (where gross fares count as revenues, not their cut), growing revenue could actually increase losses.
- tmh79 9y agothey also have about 3B in credit available to them
- bpodgursky 9y ago$708 million loss, narrowed from $991 million last quarter 18% growth from last quarter (note: that's not Y/Y. this is ridiculously fast, given the huge base.) 708mm loss / 3.4 billion in revenue is only about 20% under even. And what most people miss, is that the 3.4 billion is the 30% cut Uber takes from a ride. Prices don't have to rise 20% to break even, prices have to rise 6% (assuming no efficiency improvements via pool etc, which is frankly ridiculous) Yeah... Uber is doing fine.
- lettergram 9y ago> Uber is doing fine. Yes and no, they are in a space which is extremely price competitive. I literally am watching Uber take a dramatic hit in my area right now. Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices. Now, I only use Lyft - as do most of the people. Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company. I realize this is ancidotal, but everywhere I go (I travel a lot, switching between Uber and lyft), Lyft seems to be more popular among drivers and riders. They simply don't use it because of price/market share. However, adjust the price or driver's and the equation changes. I honestly still don't see them making it out of their situation.
- inverse_pi 9y agoUber is doing fine where I live. No one is using Lyft here. Also this https://xkcd.com/605/ https://xkcd.com/605/
- chenster 9y ago> Now, I only use Lyft - as do most of the people. Plus, most of the Uber drivers are shady here and the people think Ubers a snaky company. Why's that?
- Taylor_OD 9y agoIt's really hard to look at ride sharing apps without being clouded by your own experience. There are likely other people in your town/city who would say most people use uber and 80% of the drivers only drive for uber. It's a weirdly personal experience so its hard to see other peoples point of view which is why we have to rely on statistics like this one that show what's going on without personal experience getting in the way.
- abhv 9y agoThey haven't broken out the losses. (a) Are they profitable in the US? That would be a huge milestone. (b) If not entire US, are they profitable in top-X US urban markets, and thus losses are all due to expansion into 2nd/3rd quartile of cities? (c) Maybe some metrics like "After subtracting R&D efforts in self-driving cars, and legal fees due to multiple lawsuits, we are on average making X cents for every mile/minute driven." "Our drivers take X days to enroll, and then work for us Y hours per week, and the turnover rate is Z."
- notyourwork 9y agoThese are really great questions I would love someone to shed light on.
- askafriend 9y agoFrom internal sources, I can say with some confidence that they are profitable in most major US cities. (I do not work for Uber, so take this for what it's worth)
- dx034 9y agoIs that under the old accounting system (which paid out too little to drivers) or the correct one?
- randomdrake 9y agoGreat example of how the headlines can drive a story more than the story itself. While Uber may have posted $708 million of losses, it is also up 18% in revenue from last quarter. That's 3.4 billion dollars in the first quarter of 2017. Uber is making approximately $1,500,000 per hour. I dislike Uber as much as the next person for ethical reasons, but a company that can achieve millions of dollars in revenue per day, in 7 years, is quite extraordinary.
- ProfessorLayton 9y ago$1,500,000 per hour in revenue sounds great. Spending $1,872,000 per hour to bring in $1,500,000 per hour sounds less great. I understand that it takes money to make money, but this is one of the most extreme cases in a business.
- dmix 9y agoPeople were saying the same thing about Twitter forever and turned out to be largely wrong. I have a feeling the company making billions of dollars in revenue has some smart people who figured out how not to mess this up. But who knows maybe Uber will stop being the dominate taxi / self-driving car company globally over the next decade and mess it all up. Or not... but I doubt this large expenditure was done without foresight. The question is whether they can dominate for years to come in a high-growth industry, which it seems likely given the wide gap between them and the competition.
- mrep 9y ago> People were saying the same thing about Twitter forever and turned out to be largely wrong. Twitter lost 456 million dollars in 2016 [1] and I don't remember them ever being profitable so i don't know how those people are wrong. [1]: https://en.wikipedia.org/wiki/Twitter https://en.wikipedia.org/wiki/Twitter
- pfarnsworth 9y agoIf you look, their losses are because of stock-based comp, not because of spending. It's generally a GAAP loss, not a cash loss.
- bo1024 9y agoIf I understood the Reuters article correctly, Uber made $3.4 billion and therefore lost $4.1 billion in the first quarter of 2017. Can someone help me understand what Uber spends $4.1 billion dollars on in 3 months? Is it because they're subsidizing rides by that much on average? (i.e. paying drivers more than riders pay)
- BurningFrog 9y agoThey're paying drivers 70% of the fare, so no. It's a very good question. They must burn a lot of money on developing self driving cars and other research. But can it really be this much?
- imjk 9y agoAdvertising and expanding around the globe would be a good place to start. It's not cheap to find/put top-notch staff on the other side of the world to expand a business, open offices, recruit drivers and customers, etc.
- deleted 9y ago[deleted]
- freyr 9y agoAcquisitions? Lobbying? An acquaintance started a mapping company, and Uber snatched it up almost overnight. Although I expect a lot was paid in stock, which isn't included in these losses.
- wodenokoto 9y agoIt is very different from country to country how they do stuff. When they where in China they heavily subsidized rides, paying drives more than the entire fare, sometimes.
- conjecTech 9y agoLast quarter people drew attention to the different accounting methods used for pool versus other uber services, with pool booking the entire price of the ride as revenue rather than just uber's take. Does anyone have a sense of how much of the increase in revenue is due to increased ridership versus a shift in demand towards pool? Do flat fares use the same methodology?
- SomeStupidPoint 9y agoSo Uber made 612M more in revenue and lost 283M less money, in 17Q1 than 16Q4. Naively, that seems like a good sign (for Uber), but it could also just be that they stopped growth spending or are hiding losses in unreported figures. Does anyone have more insight in to what could have caused it?
- beager 9y agoTangentially related: is there a seasonal ebb and flow to Uber usage that could soften or sharpen this delta? I know I'm much less likely to want to walk 3 miles in February than October, but that's just one person in one city.
- korzun 9y ago> Yes and no, they are in a space which is extremely price competitive. I literally am watching Uber take a dramatic hit in my area right now. You are 'literally' watching Uber take a 'dramatic' hit. Okay. Extremely price competitive market, yet you only mention Lyft. > Lyft came to town and probably 80% of the drivers solely use them now, driving up the Uber prices. Where did you get your numbers from? Just making stuff up as you go? > Now, I only use Lyft - as do most of the people. I only use Uber - as do most of the people. See how this generic mud-slinging like commentary works? > Plus, most of the Uber drivers are shady here Making blanket statements with words like 'shady' and 'here' is cheap. You did not mention a single, verifiable fact. I can apply this kind of narrative to pretty much anything. > I honestly still don't see them making it out of their situation. Wrap it up with a cliche 'honesty...'. I do not understand comments like this; how much is Lyft paying you?
- dang 9y agoCommenting this uncivilly will get your account banned on HN, so please don't do that, and please in particular don't accuse other users of astroturfing just because you happen to hold a different view than they do. It's a popular internet trope but it isn't allowed here. We detached this comment from https://news.ycombinator.com/item?id=14456973 https://news.ycombinator.com/item?id=14456973 and marked it off-topic.
- goodladjohnny 9y agoThat said, harsh — maybe, but @korzun still has a point. Original comment is (clearly) biased and doesn't align with the actual facts. I wonder why it got upvoted in the first place. I don't think the accusation has been made because "one happens to hold a different view". It is harsh, but to be fair, OP failed to make a valid point.
- johan_larson 9y agoCould we stop posting links to paywalled content, for crying out loud? Or at least require that it be marked? Most news is available somewhere without a subscription.
- terri_cat 9y agohttps://outline.com/gxpn2K https://outline.com/gxpn2K
- avadiax 9y agohttp://www.reuters.com/article/us-uber-results-idUSKBN18R3EQ http://www.reuters.com/article/us-uber-results-idUSKBN18R3EQ
- bla2 9y ago1. Click "web" link below story here on HN 2. Click first result on Google WSJ doesn't paywall if the referrer is Google.
- ewoodrich 9y agoFWIW, I still hit the paywall after clicking on the Google search result.
- johan_larson 9y agoYes, I don't think that trick has worked for some time.
- noway421 9y agoThey are surely gonna run out of top c-level execs faster than out of cash.
- deleted 9y ago[deleted]
- bitmapbrother 9y agoYou could say they lost an Otto.
- mbose 9y agoHahaa
- dingo_bat 9y agoI know most people hate on uber, but it has impacted my life a lot. I think the model they've demonstrated is a legit model, and the ruthlessness with which they pursue it should not take anything away from the company's value. In fact, it should add. I want companies to show a giant middle finger to monopolistic city laws that harm citizens.
- stephenr 9y agoWhen's the last time a mandatory background check to prevent a rapist or child abuser becoming a glorified taxi driver, harmed a citizen?
- dingo_bat 9y agoI didn't say background checks are bad.
- kbart 9y agoNot sure what "evil" laws you are talking about, but car safety, maintenance, insurance, fare counter requirements, mandatory drivers background check etc. are all beneficial to the user in my book.
- dingo_bat 9y ago> car safety, maintenance, insurance All those laws exist for all cars, not just taxis. > fare counter requirements Classic example of over-regulation, leading to crappy service, low supply, and high prices. > mandatory drivers background check If some person is so suspect that you cannot trust them to drive you around in public while being tracked by GPS continuously, why is he not locked up? This is a bullshit made-up requirement and does not prevent anything.
- kbart 9y ago"All those laws exist for all cars, not just taxis." I don't know where you are from, but here taxi cars have stricter safety, ecology, age (and probably more) requirements than private cars. Which makes sense as they usually spend more time on roads and carry more people. "Classic example of over-regulation, leading to crappy service, low supply, and high prices." Um, no. Fare counter regulations and checks just make sure that it shows distance/fare correctly, and as far as I know, there's no monopoly in this market -- it's much like scales regulation in grocery stores.
- habosa 9y agoA couple things to note: 1. This is new loss excluding 'employee stock compensation and other items'. Anecdotally I've heard that Uber offers, particularly for advanced technical positions, are extremely stock heavy. This could be a big exclusion. It's also a bit of a double standard since so much was made of Snap's recent losses which were largely stock based compensation driven. 2. Past discussions on HN have noted that Uber counts the full Pool fare as revenue but this is not the case for Uber X or Uber Black. So if Pool is a rising share of rides (I've heard it is) then Uber will show strong revenue growth without a proportional growth in net income. And a question: How long will Uber's investors tolerate the current situation? The company is losing money at a record setting pace, has a new scandal every day, and has seemingly no plans for a liquidity event. Even though the on-paper growth is fantastic people must want to get their money out. If this was a public company there would be a huge sell off.
- nocoder 9y agoI like how the WSJ headline tries to imply casualty between loss and leaving of finance head. Why cannot these guys simply share the news instead of trying to imply the cause.
- matt4077 9y ago"as, conjunction: used to indicate that something happens during the time when something else is taking place: Frank watched him as he ambled through the crowd | as she grew older, she kept more to herself." So they're just trying to mention both big news items in the same headline. The casualty[sic] is all in your head.
- nocoder 9y agoMaybe, but "as" also can be used in place of "because or since". Here is another headline from Reuters "Uber's finance head leaves; company's quarterly loss narrows". In my opinion, both the headlines provide a different slant to the same story. P.S:- We both misspelled "causality", what a "casualty" :)
- matt4077 9y agoThat use of "as" would require a comma: "they were free, as the case had not been proved." P.S.: I noticed the misspelling of causality, which is was the [sic] was trying to indicate.
- downandout 9y agoPaywall bypass: https://www.wsj.com/articles/uber-posts-708-million-loss-as-finance-head-leaves-1496272500 https://www.wsj.com/articles/uber-posts-708-million-loss-as-...
- pokoleo 9y agohttp://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
- patrickbolle 9y agoUber is great, but I've relocated to Bali and the competitors here are doing such a fantastic job at giving me reasons not to use Uber. Go-jek is cheaper, you can pay with cash, and they offer like 15 other services like... go-food, go-massage, go-cleaning, etc. It's incredible.
- code4tee 9y agoThey do not have a sustainable business. They're clearly pumping up revenue with subsidies (which is why they lose so much money). I do use Uber occasionally but when I do there's so many offers and deals that I never pay anything close to a break-even price. If you sell dollar bills for 85 cents it's easy to have lots of revenue.