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What exactly does it need to execute on? It's valued at $60B and is losing money with every. single. fricking. ride. It doesn't need someone to "execute" some

What exactly does it need to execute on? It's valued at $60B and is losing money with every. single. fricking. ride. It doesn't need someone to "execute" some sort of plan, it needs a miracle only innovation can provide.

QAPereo 9y ago
What it needs is a time machine to bring the necessary automotive tech back from 2050.
valuearb 9y ago
It needs to re-focus on it's core ride-sharing business and substantially reduce it's burn rate. There is little doubt that ride-sharing will be a massively profitable business, they get paid dollars per ride and their booking costs should only be pennies. The myth that their rides are unprofitable is because they spend money like drunken sailors in a whorehouse. Anyone analyzing their financials has no insight into whether ride sharing is profitable in the US, or other countries because the needed information is not broken out in those reports They have up to 100 side businesses like UberEats. They've spent a ton trying to design autonomous vehicles they don't need now and likely never will need (given they'll be freely available for purchase from Tesla, GM, etc when created). Lastly, they spend huge amounts opening new markets, basically paying drivers to sign up with such lucrative bonuses that Uber gets scammed constantly by them. The plan is pretty simple 1) Kill almost every side business, and do a substantial headcount reduction. 2) Dump the autonomous driving development group and cheaply settle the Waymo lawsuit. 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally. 4) Clean house in the HR department and of every remaining harasser. 5) Raise another round to ensure Uber's long term financial stability. Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO.
- jnwatson 9y ago
  Well put. I hope the new CEO reads this.
- ImSkeptical 9y ago
  If Uber just focuses on ride-sharing, without innovation, it's unclear to me how they could survive. They seem to scale in reverse. That is, an Uber that runs in the US and the UK will cost more to operate than an Uber that runs in just the US. An Uber that runs in one state will cost less than an Uber that runs in a whole country, and so on. The more diverse an area you serve, the more legislation and markets you have to deal with, more hours you'll have high customer support load, and the less well you will be able to analyze and react to trends in individual markets. What stops me, then, in an era where Uber isn't fueled by investor money every trip, from being a competitor with Uber? Raise a few million dollars, get a simple app together with a few friends, and then convince drivers to try (take a lot of short Uber rides and pitch good drivers) and riders to ride. I'd have less staff, less overhead, and therefore less costs. The savings could be passed on equally to the drivers and riders. I could give discounts on nights when there was a big game, I could advertise in local areas, I could poach good drivers from Uber, etc. It seems to me there is no way for Uber to be competitive if they aren't using investor to subsidize the price of rides. There is nothing, that I am aware of, that is impossible or expensive to replicate in their tech.
  - yeukhon 9y ago
    I think we need to make peace with the word innovation sometimes. Innovation should be realistic in the right timing. Surely autonomous car is a really interesting future, but Uber has plenty of organizational problems require urgent and decisive surgery. Abandon the auto project and UberEats (I don't even know if UberEats is even profitable or how many people actually use it) will allow the company to focus on core problems. How can you clean your house if your kids constantly go around the house making a mess? Let's get the house cleaned first then we worry about how to correct the kids' behaviors. Basically, do one thing well enough before moving to another. They really need to focus on growing in cities and countries where they face competitions but already have a strong root. I understand the awesomeness to be the bigges, but look at Uber China, Uber had to parnter with Di Di instead (Uber doesn't run its business in mainland China anymore). Uber also recently shut down its business in Marcu because the drivers were fined so much no one would work for Uber.
    - 9y ago
- codeisawesome 9y ago
  Not really disagreeing with the rest of this comment, but a couple of points: > given they'll be freely available for purchase from Tesla, GM, etc when created Tesla has a built-in "feature" in their cars, to make OTA updates to the software running the car. One part of the vision of buying a Tesla, is supposed to be the day when customers let their autonomous car "work" for them while they are not using it. I don't think it's a huge stretch of imagination for Tesla to come out with it's own version of the ride sharing parts of Uber when autonomous driving becomes a full reality with their cars. They could eat Uber at this point. > Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO. Points 3, 4 & 5 of the plan are likely going to be very difficult! Why? > 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally. I'm fairly certain there are very smart, well-paid people already trying to do each of things at Uber, not sure how reducing headcount will magically improve the state of affairs here. Mythical man month like arguments come to mind. > 4) Clean house in the HR department and of every remaining harasser. If the company was built on a foundation of sexist and abrasive culture, rooting every one out will take a long time, not to mention disruptive as it involves disentangling the fiefdoms built by these people (who may even be doing a "good job", causing damage to raw business metrics in removing them). I'm not saying this shouldn't be done, I'm just saying "birds of a feather flock together", so if I may dare say, wholesale pest removal might unfortunately be low on the priority of any new exec. They would be more focussed on other matters and just treat the symptoms. Human nature. > 5) Raise another round to ensure Uber's long term financial stability. If Points 1 & 2 are followed, without the silver-talk of "constant innovation" and projections of "taking over global transportation with our technology" - raising private funds might get extremely challenging and may not have the expected results. At that point, an IPO might provide better success as public investors are interested in "business that execute" as well, as opposed to the private investment folks who look for returns in the Order(s) of Magnitude scale.
  - valuearb 9y ago
    Let me address your points 1) It's possible Tesla could enter the ride-sharing market. And it's possible they could win. But I won't download a Tesla app until their service is as good a Ubers, and that's a huge barrier to overcome. Uber's advantage is their massive lead in installed apps and available drivers. If they lose that, then they'll be at risk. Some autonomous company may pull it off, but the far more likely route is that Uber adds autonomous fast enough that none can catch them. 3) I'm not arguing to add headcount to ride-share, I'm arguing to add focus to it. Having a CEO 100% focused on ride-share instead of CEO 50% focused on ride-share and 50% focused on autonomous/uberEats/100 other side hustles will trickled down through exec staff, directors, etc. 4) Starting over in HR is your first start. You can't have a culture where people were allowed to hide problems or protect bad employees. It starts in HR. 5) An IPO is fine. It's all about financing the business over the long term, so the new CEO will pick the best possible financing path. And reducing burn rate might be enough alone to do it, since Uber should still have billions left in the bank. Let's be fair, the $60B valuation was really dumb and won't be seen again for a long time if ever. You can't count on having investors as dumb as the Saudi's again.
- tedmiston 9y ago
  I hope they don't do all of this. UberEATS is best in class. Seriously an order of magnitude better experience than all of the other food delivery apps.
origami777 9y ago
How do you know it looses money on every ride (genuine question)? Is there proof? Could it be that there are profitable rides in some of its markets that inspire investors that it would eventually be able to make every ride profitable at some point?
- slouch 9y ago
  > Uber passengers were paying only 41% of the actual cost of their trips https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive...
  - valuearb 9y ago
    That analysis is speculative at best. It ignores all of the costs that aren't part of providing Uber ride-sharing, including a large number of side businesses, and it's massive investment in international growth. The financials simply don't provide detail to break down the actual costs of ride-sharing when it's mixed in with so many incidental operations and costs.
Spooky23 9y ago
Sure it does. Uber is like Dropbox for cars. WTF are they doing? If you fired 75% of the people, and focused on selling rides and selling cars to drivers, the company would probably coast and make money for years.

QAPereo 9y ago

What it needs is a time machine to bring the necessary automotive tech back from 2050.

valuearb 9y ago

It needs to re-focus on it's core ride-sharing business and substantially reduce it's burn rate. There is little doubt that ride-sharing will be a massively profitable business, they get paid dollars per ride and their booking costs should only be pennies. The myth that their rides are unprofitable is because they spend money like drunken sailors in a whorehouse. Anyone analyzing their financials has no insight into whether ride sharing is profitable in the US, or other countries because the needed information is not broken out in those reports They have up to 100 side businesses like UberEats. They've spent a ton trying to design autonomous vehicles they don't need now and likely never will need (given they'll be freely available for purchase from Tesla, GM, etc when created). Lastly, they spend huge amounts opening new markets, basically paying drivers to sign up with such lucrative bonuses that Uber gets scammed constantly by them. The plan is pretty simple 1) Kill almost every side business, and do a substantial headcount reduction. 2) Dump the autonomous driving development group and cheaply settle the Waymo lawsuit. 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally. 4) Clean house in the HR department and of every remaining harasser. 5) Raise another round to ensure Uber's long term financial stability. Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO.

jnwatson 9y ago
Well put. I hope the new CEO reads this.
ImSkeptical 9y ago
If Uber just focuses on ride-sharing, without innovation, it's unclear to me how they could survive. They seem to scale in reverse. That is, an Uber that runs in the US and the UK will cost more to operate than an Uber that runs in just the US. An Uber that runs in one state will cost less than an Uber that runs in a whole country, and so on. The more diverse an area you serve, the more legislation and markets you have to deal with, more hours you'll have high customer support load, and the less well you will be able to analyze and react to trends in individual markets. What stops me, then, in an era where Uber isn't fueled by investor money every trip, from being a competitor with Uber? Raise a few million dollars, get a simple app together with a few friends, and then convince drivers to try (take a lot of short Uber rides and pitch good drivers) and riders to ride. I'd have less staff, less overhead, and therefore less costs. The savings could be passed on equally to the drivers and riders. I could give discounts on nights when there was a big game, I could advertise in local areas, I could poach good drivers from Uber, etc. It seems to me there is no way for Uber to be competitive if they aren't using investor to subsidize the price of rides. There is nothing, that I am aware of, that is impossible or expensive to replicate in their tech.
- yeukhon 9y ago
  I think we need to make peace with the word innovation sometimes. Innovation should be realistic in the right timing. Surely autonomous car is a really interesting future, but Uber has plenty of organizational problems require urgent and decisive surgery. Abandon the auto project and UberEats (I don't even know if UberEats is even profitable or how many people actually use it) will allow the company to focus on core problems. How can you clean your house if your kids constantly go around the house making a mess? Let's get the house cleaned first then we worry about how to correct the kids' behaviors. Basically, do one thing well enough before moving to another. They really need to focus on growing in cities and countries where they face competitions but already have a strong root. I understand the awesomeness to be the bigges, but look at Uber China, Uber had to parnter with Di Di instead (Uber doesn't run its business in mainland China anymore). Uber also recently shut down its business in Marcu because the drivers were fined so much no one would work for Uber.
  - 9y ago
codeisawesome 9y ago
Not really disagreeing with the rest of this comment, but a couple of points: > given they'll be freely available for purchase from Tesla, GM, etc when created Tesla has a built-in "feature" in their cars, to make OTA updates to the software running the car. One part of the vision of buying a Tesla, is supposed to be the day when customers let their autonomous car "work" for them while they are not using it. I don't think it's a huge stretch of imagination for Tesla to come out with it's own version of the ride sharing parts of Uber when autonomous driving becomes a full reality with their cars. They could eat Uber at this point. > Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO. Points 3, 4 & 5 of the plan are likely going to be very difficult! Why? > 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally. I'm fairly certain there are very smart, well-paid people already trying to do each of things at Uber, not sure how reducing headcount will magically improve the state of affairs here. Mythical man month like arguments come to mind. > 4) Clean house in the HR department and of every remaining harasser. If the company was built on a foundation of sexist and abrasive culture, rooting every one out will take a long time, not to mention disruptive as it involves disentangling the fiefdoms built by these people (who may even be doing a "good job", causing damage to raw business metrics in removing them). I'm not saying this shouldn't be done, I'm just saying "birds of a feather flock together", so if I may dare say, wholesale pest removal might unfortunately be low on the priority of any new exec. They would be more focussed on other matters and just treat the symptoms. Human nature. > 5) Raise another round to ensure Uber's long term financial stability. If Points 1 & 2 are followed, without the silver-talk of "constant innovation" and projections of "taking over global transportation with our technology" - raising private funds might get extremely challenging and may not have the expected results. At that point, an IPO might provide better success as public investors are interested in "business that execute" as well, as opposed to the private investment folks who look for returns in the Order(s) of Magnitude scale.
- valuearb 9y ago
  Let me address your points 1) It's possible Tesla could enter the ride-sharing market. And it's possible they could win. But I won't download a Tesla app until their service is as good a Ubers, and that's a huge barrier to overcome. Uber's advantage is their massive lead in installed apps and available drivers. If they lose that, then they'll be at risk. Some autonomous company may pull it off, but the far more likely route is that Uber adds autonomous fast enough that none can catch them. 3) I'm not arguing to add headcount to ride-share, I'm arguing to add focus to it. Having a CEO 100% focused on ride-share instead of CEO 50% focused on ride-share and 50% focused on autonomous/uberEats/100 other side hustles will trickled down through exec staff, directors, etc. 4) Starting over in HR is your first start. You can't have a culture where people were allowed to hide problems or protect bad employees. It starts in HR. 5) An IPO is fine. It's all about financing the business over the long term, so the new CEO will pick the best possible financing path. And reducing burn rate might be enough alone to do it, since Uber should still have billions left in the bank. Let's be fair, the $60B valuation was really dumb and won't be seen again for a long time if ever. You can't count on having investors as dumb as the Saudi's again.
tedmiston 9y ago
I hope they don't do all of this. UberEATS is best in class. Seriously an order of magnitude better experience than all of the other food delivery apps.

origami777 9y ago

How do you know it looses money on every ride (genuine question)? Is there proof? Could it be that there are profitable rides in some of its markets that inspire investors that it would eventually be able to make every ride profitable at some point?

slouch 9y ago
> Uber passengers were paying only 41% of the actual cost of their trips https://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive...
- valuearb 9y ago
  That analysis is speculative at best. It ignores all of the costs that aren't part of providing Uber ride-sharing, including a large number of side businesses, and it's massive investment in international growth. The financials simply don't provide detail to break down the actual costs of ride-sharing when it's mixed in with so many incidental operations and costs.

Spooky23 9y ago

Sure it does. Uber is like Dropbox for cars. WTF are they doing? If you fired 75% of the people, and focused on selling rides and selling cars to drivers, the company would probably coast and make money for years.