4 ms·

Eats? I don't think so. I heard it's one of the fastest growing verticals at Uber.

by lhorie 8y ago

valuearb 8y ago
It is, and it's huge. It's 10% of their revenues now. Which means it's burning more cash than any other vertical at Uber by far. Why does Uber need to fund this "business" for years to come? How does it benefit them to keep throwing money at it? Answer: It really doesn't. It's a huge distraction that might never be profitable.
- seibelj 8y ago
  Wouldn’t using drivers who are already on the road, who drive to point A to pick up a person and drop them off at point B, make perfect sense to pick up food at point A and drop it off at point B? And considering food doesn’t take a pool spot, they could do everything simultaneously while picking up people. It makes perfect sense to me.
  - valuearb 8y ago
    You have $6B left. Building out ride sharing will cost more than $6B. So will building out Uber Eats. What'll it be, ride sharing, eats, or more dilution? Oh, and one of these business you are the clear #1 in, and the other, you have a chance to be #2.
- ghein 8y ago
  It comes down to this question: are they Viaweb or are they Amazon? If they're Viaweb then they should only do "taxi-like" stuff and should throw away all the automation and other businesses. If they're Amazon then they are in transportation. Eats acts as a flywheel - more pay for drivers, more demand for drivers, more supply of drivers, more loyal customers, more revenue from customers. They should do automation, be involved in trucking, eats, scooters... add more flywheels. What's the right strategy? We'll know in 5 years and all proclaim that it was obvious!
  - valuearb 8y ago
    It's nothing like amazon. Amazon had positive cash flow from early days and has mostly kept positive cash flow ever since (even though they don't report profits, they generated cash). Because of that they've rarely raised debt or equity, and only when they want to on their terms, never when forced to. Because of that discipline they could work on leveraging into new businesses that had synergies with their current business. But they never tried to do them all at once. Again they were disciplined. At first it was books only. Then they moved into new products bit by bit, and established each as a good business for them before moving into new ones.
  - eric_h 8y ago
    In NYC I get uber eats delivered by a car approximately 1 in 30 orders. Most Uber eats deliver by foot or by bicycle.
- probe 8y ago
  GrubHub, a direct publicly traded competitor, is profitable and has a market cap of 11.6B (and is growing tremendously). Considering that Uber Eats already has a gross sales run rate larger than GrubHub, I do imagine it's a pretty good bet. There are also a lot of horizontal synergies between the business models.
  - valuearb 8y ago
    That's a very good counter argument, but the real question is whether Uber Eats is profitable or close to being profitable. If it is, you are right and I'm totally wrong and they should kill every side project (including probably driverless car technologies) and keep Eats and Ride Sharing. If Uber Eats isn't close to profitability it means they are far behind GrubHub despite their advantage of their massive synergy, and have little hope to catch up (in profitability, even if Uber Eats can give away enough services to outgrow Grubhub in revenues that would be a pyrrhic victory).
- deleted 8y ago
  [deleted]

Eats? I don't think so. I heard it's one of the fastest growing verticals at Uber.

by lhorie 8y ago

Eats? I don't think so. I heard it's one of the fastest growing verticals at Uber.

It is, and it's huge. It's 10% of their revenues now. Which means it's burning more cash than any other vertical at Uber by far. Why does Uber need to fund this "business" for years to come? How does it benefit them to keep throwing money at it? Answer: It really doesn't. It's a huge distraction that might never be profitable.

seibelj 8y ago
Wouldn’t using drivers who are already on the road, who drive to point A to pick up a person and drop them off at point B, make perfect sense to pick up food at point A and drop it off at point B? And considering food doesn’t take a pool spot, they could do everything simultaneously while picking up people. It makes perfect sense to me.
- valuearb 8y ago
  You have $6B left. Building out ride sharing will cost more than $6B. So will building out Uber Eats. What'll it be, ride sharing, eats, or more dilution? Oh, and one of these business you are the clear #1 in, and the other, you have a chance to be #2.
ghein 8y ago
It comes down to this question: are they Viaweb or are they Amazon? If they're Viaweb then they should only do "taxi-like" stuff and should throw away all the automation and other businesses. If they're Amazon then they are in transportation. Eats acts as a flywheel - more pay for drivers, more demand for drivers, more supply of drivers, more loyal customers, more revenue from customers. They should do automation, be involved in trucking, eats, scooters... add more flywheels. What's the right strategy? We'll know in 5 years and all proclaim that it was obvious!
- valuearb 8y ago
  It's nothing like amazon. Amazon had positive cash flow from early days and has mostly kept positive cash flow ever since (even though they don't report profits, they generated cash). Because of that they've rarely raised debt or equity, and only when they want to on their terms, never when forced to. Because of that discipline they could work on leveraging into new businesses that had synergies with their current business. But they never tried to do them all at once. Again they were disciplined. At first it was books only. Then they moved into new products bit by bit, and established each as a good business for them before moving into new ones.
- eric_h 8y ago
  In NYC I get uber eats delivered by a car approximately 1 in 30 orders. Most Uber eats deliver by foot or by bicycle.
probe 8y ago
GrubHub, a direct publicly traded competitor, is profitable and has a market cap of 11.6B (and is growing tremendously). Considering that Uber Eats already has a gross sales run rate larger than GrubHub, I do imagine it's a pretty good bet. There are also a lot of horizontal synergies between the business models.
- valuearb 8y ago
  That's a very good counter argument, but the real question is whether Uber Eats is profitable or close to being profitable. If it is, you are right and I'm totally wrong and they should kill every side project (including probably driverless car technologies) and keep Eats and Ride Sharing. If Uber Eats isn't close to profitability it means they are far behind GrubHub despite their advantage of their massive synergy, and have little hope to catch up (in profitability, even if Uber Eats can give away enough services to outgrow Grubhub in revenues that would be a pyrrhic victory).
deleted 8y ago
[deleted]