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Split between drivers, this is $750,000/driver. I get that Uber has a massive footprint, but given that they've never turned a profit in their entire company h

by RIMR 8y ago

Split between drivers, this is $750,000/driver. I get that Uber has a massive footprint, but given that they've never turned a profit in their entire company history, I don't understand how they can be worth this much...

anonymous5133 8y ago
It is all about growth is why.
- brianwawok 8y ago
  That's true of a product company. But if your product is an app for taxi drivers to use... it's not a 750k per employee product. Perhaps if they had self driving taxis....
aeternus 8y ago
They are profitable in many cities, they basically just reinvest 100% of profits in geographic expansion. Amazon did the same thing, and investors said the same thing, and look how that turned out.
- Sohcahtoa82 8y ago
  Is there a term for costs that are purely associated with growth and not regular operations? For example, research and development on new products/features, expansion of manufacturing capabilities, building new offices, etc.? I frequently see people talk about X corporation not being profitable, but the claim is often extremely short-sighted as they ignore money being spent on growth and development. Ever dollar kept as "profit" is money not being spent on growth, which is huge when your company is still growing.
  - jannyfer 8y ago
    “Capital costs” are probably what you are looking for.
  - Dwolb 8y ago
    It’s tough to tell without guidance directly from the company. For sure internally they have some sort of calculation for “If we ceased all growth activities and maximized our pricing power and minimized our costs, how much cash could we bring in over the next x years?”
sr228822 8y ago
Not sure where you got those numbers from. These articles quote the number of active drivers at 1.5-3 million (end of 2017), which would come out to 40k-80k per driver http://www.businessofapps.com/data/uber-statistics/#3 http://www.businessofapps.com/data/uber-statistics/#3 https://therideshareguy.com/how-many-uber-drivers-are-there/ https://therideshareguy.com/how-many-uber-drivers-are-there/
- pessimizer 8y ago
  Depends on how you define "active driver." 3 million "active drivers" who drive 100 hours a year on average (instead of 2000) would come out to $750K per full-time driver.

by RIMR 8y ago

anonymous5133 8y ago

It is all about growth is why.

brianwawok 8y ago
That's true of a product company. But if your product is an app for taxi drivers to use... it's not a 750k per employee product. Perhaps if they had self driving taxis....

aeternus 8y ago

They are profitable in many cities, they basically just reinvest 100% of profits in geographic expansion. Amazon did the same thing, and investors said the same thing, and look how that turned out.

Sohcahtoa82 8y ago
Is there a term for costs that are purely associated with growth and not regular operations? For example, research and development on new products/features, expansion of manufacturing capabilities, building new offices, etc.? I frequently see people talk about X corporation not being profitable, but the claim is often extremely short-sighted as they ignore money being spent on growth and development. Ever dollar kept as "profit" is money not being spent on growth, which is huge when your company is still growing.
- jannyfer 8y ago
  “Capital costs” are probably what you are looking for.
- Dwolb 8y ago
  It’s tough to tell without guidance directly from the company. For sure internally they have some sort of calculation for “If we ceased all growth activities and maximized our pricing power and minimized our costs, how much cash could we bring in over the next x years?”

sr228822 8y ago

Not sure where you got those numbers from. These articles quote the number of active drivers at 1.5-3 million (end of 2017), which would come out to 40k-80k per driver http://www.businessofapps.com/data/uber-statistics/#3 http://www.businessofapps.com/data/uber-statistics/#3 https://therideshareguy.com/how-many-uber-drivers-are-there/ https://therideshareguy.com/how-many-uber-drivers-are-there/

pessimizer 8y ago
Depends on how you define "active driver." 3 million "active drivers" who drive 100 hours a year on average (instead of 2000) would come out to $750K per full-time driver.