5 ms·

How Uber Makes Money

19 points by kolbe 8y ago

abb1234etric 8y ago
Does anyone understand what goes into Ubers sales and marketing expense? It appears they are spending roughly 500mm a quarter on this line item which is enough to eat up most of their entire gross profit. Are their high Sales and marketing costs a function of their high driver churn?
- joecool1029 8y ago
  > Does anyone understand what goes into Ubers sales and marketing expense? I would guess free rides for new rider signups, promotions to get regular users (gotta boost dem revenue figures, drivership, and rideership numbers for the IPO) and driver cash incentives to sign-up and later drive during specific periods of time.
  - abb1234etric 8y ago
    Yeah if that is true then the business is inherently unprofitable and they are just playing accounting gimmicks to obscure this simple fact.
- yesenadam 8y ago
  The article talks in some detail about that. (To get more info I clicked "GET THE ENTIRE 57-PAGE REPORT" which however led to a page thanking me for signing up, apparently for a free trial etc. Uh..No thanks.)
  - throway_rit4e 8y ago
    https://www.cbinsights.com/reports/CB-Insights_How-Uber-Makes-Money.pdf https://www.cbinsights.com/reports/CB-Insights_How-Uber-Make...
    - yesenadam 8y ago
      Thanks. ..But it seems identical to the web page!
      - yesenadam 8y ago
        So.. that seems very dodgy - you want to read more info, so get roped into signing up for a free trial, and what you get is exactly what you've just read. That seems somewhere between totally misleading and blatant lying.
joecool1029 8y ago
They, uh.... don't make money. From the article: >Uber’s losses today are the stuff of startup legend. >In Q3’18, the company reported another quarter in the red. Revenues rose nearly 40% year-over-year to $2.95B, but the company still lost more than $1B on a GAAP basis.
yesenadam 8y ago
(I've managed to hardly read anything about Uber before on here, so excuse the naïvety) So it's virtually a pyramid scheme?! Sounds like the main benefit for drivers (apart from low wages) is a large bonus for referring other new drivers. Uber spends most money getting more drivers, and ever expanding. The early drivers got paid well (from bonuses), and so do those running the company, I assume. So when the global supply of new drivers runs out,..what?

19 points by kolbe 8y ago

Does anyone understand what goes into Ubers sales and marketing expense? It appears they are spending roughly 500mm a quarter on this line item which is enough to eat up most of their entire gross profit. Are their high Sales and marketing costs a function of their high driver churn?

joecool1029 8y ago
> Does anyone understand what goes into Ubers sales and marketing expense? I would guess free rides for new rider signups, promotions to get regular users (gotta boost dem revenue figures, drivership, and rideership numbers for the IPO) and driver cash incentives to sign-up and later drive during specific periods of time.
- abb1234etric 8y ago
  Yeah if that is true then the business is inherently unprofitable and they are just playing accounting gimmicks to obscure this simple fact.
yesenadam 8y ago
The article talks in some detail about that. (To get more info I clicked "GET THE ENTIRE 57-PAGE REPORT" which however led to a page thanking me for signing up, apparently for a free trial etc. Uh..No thanks.)
- throway_rit4e 8y ago
  https://www.cbinsights.com/reports/CB-Insights_How-Uber-Makes-Money.pdf https://www.cbinsights.com/reports/CB-Insights_How-Uber-Make...
  - yesenadam 8y ago
    Thanks. ..But it seems identical to the web page!
    - yesenadam 8y ago
      So.. that seems very dodgy - you want to read more info, so get roped into signing up for a free trial, and what you get is exactly what you've just read. That seems somewhere between totally misleading and blatant lying.

joecool1029 8y ago

They, uh.... don't make money. From the article: >Uber’s losses today are the stuff of startup legend. >In Q3’18, the company reported another quarter in the red. Revenues rose nearly 40% year-over-year to $2.95B, but the company still lost more than $1B on a GAAP basis.

yesenadam 8y ago

(I've managed to hardly read anything about Uber before on here, so excuse the naïvety) So it's virtually a pyramid scheme?! Sounds like the main benefit for drivers (apart from low wages) is a large bonus for referring other new drivers. Uber spends most money getting more drivers, and ever expanding. The early drivers got paid well (from bonuses), and so do those running the company, I assume. So when the global supply of new drivers runs out,..what?