23 ms·

Can Uber ever make money?

287 points by prostoalex 8y ago

uptown 8y ago
Outline Link: https://outline.com/endjbs https://outline.com/endjbs
- dymk 8y ago
  If someone else might own the copyright to it, don't submit it. Outline is for reading pages that: 1) you own the rights to, 2) is in the public domain, 3) constitutes fair use, or 4) you have consent of the copyright holder.
wintorez 8y ago
Uber is not making money? How? Why?
- micael_dias 8y ago
  Their expenses are higher than their revenue.
  - askafriend 8y ago
    If I bought 10 McDonald's franchises today, my expenses would be higher than my revenue for probably the entire first year if not more. If things are going well, and I make another bet by buying 10 more, my expenses would continue being higher than my revenue (even if the first 10 stores become profitable). If I keep doing this, I may not show a profit on my balance sheet for a long time. This example illustrates why "expenses are higher than revenue" doesn't reveal anything and that such a simplistic picture of a business is useless.
    - scarface74 8y ago
      What would it reveal if your marginal costs were greater than your marginal revenue? Has anyone done a cohort analysis?
- uptown 8y ago
  Here's two answers: https://twitter.com/neilanalien/status/627873374505562112?lang=en https://twitter.com/neilanalien/status/627873374505562112?la...
- jandrese 8y ago
  They're blowing a ton of money on R&D for autonomous cars. Also they are spending a fortune on lawyers to fight every municipal cab company in the world. Also, their business model is undercutting the existing competition, which makes big profits hard to come by.
dvh 8y ago
It seems like it it's the same with shared bikes. The only one making money are bikes manufacturer.
TruthSHIFT 8y ago
Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.
- rat9988 8y ago
  If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.
  - kiran-rao 8y ago
    Do Uber drivers make enough to cover complete vehicle costs? I remember reading that after total costs of ownership (depreciation, insurance, gas, maintenance, etc) Uber drivers really aren't making much.
    - britch 8y ago
      As of 2018 it was something like $8.55 an hour median in the US accounting for costs of upkeep. https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-wages-median-report https://www.theguardian.com/technology/2018/mar/01/uber-lyft...
    - slfnflctd 8y ago
      There are so many ways to slice and dice those numbers. Drivers who already own a car they aren't going to get rid of would be paying a lot of those costs anyway (other than wear & tear and fuel). Taxes are all over the place; some pay 30%+, others nothing. What it really comes down to is the ratio of cost of living for the driver to the amount they take home after buying gas. If I'm almost broke, want to buy more stuff than I can afford, and know I can get $100 worth of rides for $20 worth of gas in less than 2 days, the decision has already been made. As long as I have close to the same buying power, this will remain true. It's a delicate balance, though, and when you're competing against people in more dire straits who maybe aren't as good at math, at a certain point it could become unviable.
  - 8y ago
pbreit 8y ago
Uber prints money on non-pool rides in mature markets. The losses are all going to fund expansion and single-rider pools.
- opportune 8y ago
  I think they print money on pooled rides in certain cases too. Especially going to/from the airport.
- 0x262d 8y ago
  source?
  - pbreit 8y ago
    https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm https://www.sec.gov/Archives/edgar/data/1543151/000119312519... $940 million in Contribution Profit in 2018 and that does not net out new markets and non-pool rides. So, to re-affirm more emphatically, Uber prints money on non-pool rides in mature markets.
skywhopper 8y ago
There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor practices were also supposed to help, but that can't last once you become competitive with the establishment. Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. But even if it does, it won't be an exclusive technology. They won't be able to make any more profit from it. If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.
- prolepunk 8y ago
  If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else? * They have industrial facilities to build cars * They have dealership networks to repair cars * They have capital or can borrow easily to do it I can even argue that all that stops car manufacturers from operating this are government regulations -- taxi medallions as well as anti-monopoly laws. Once Uber, lyft and the like undercut those regulations, someone else can undercut them.
  - ghaff 8y ago
    The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.
    - Pamar 8y ago
      Car2Go is a subsidiary of Daimler, though. And I suppose that being able to produce a large number of cars (all identical models and setups, all the same colour etc.) is something that an automotive company can easily leverage.
govg 8y ago
I can only see them making money in three ways : - They scale up massively and capture a huge fraction of the ride sharing market, thus allowing them to offer low cost / low margin rides, but making up for it by volumes : At least in India, they are in a good position, but they seem to have conceded the other markets with high potential for growth like SE Asia and China. - They have a premium offering that is actually quite a trend-setter : Revive the Uber Black service and take it up a notch, target richer clientele which will be willing to pay a premium to ride in a much better car and with trained chauffeurs. - They push heavily in the pooling space - this allows them to use their vehicular inventory better as well as drive up margins per ride : This doesn't seem to be a huge focus for them as of now, but it could change. The other big change that could transform their fortunes is if they put out a viable self driving product. I do not think it'll be economically profitable, or even technologically viable in the near term.
- dcolkitt 8y ago
  Option 4: Uber uses the expertise, infrastructure, and brand it built in ridesharing to expand into the becoming the de facto standard for timely last mile delivery. This is why UberEats is such a major strategic focus for the company. It's proof of concept that they can do more than be a taxi. An efficient platform for quickly and cheaply ferrying around stuff around town is a way bigger market than ridesharing. We're not only talking about the obvious examples like residential packages, groceries, and laundry. But entirely new business models that didn't previously exist, because there's no efficient last-mile delivery solution. Cloud kitchen are an example of a nascent industry that could only emerge in a post-Uber world.
  - idlewords 8y ago
    Saying that we're going to work to dominate a low-margin sector at a staggering loss for years, so that we can enter an even lower-margin established industry and recoup our losses there, is a gutsy proposition.
    - dcolkitt 8y ago
Invictus0 8y ago
What is the point of this article? If you're going to ask a question, do some work to actually find an answer.
losvedir 8y ago
They have other lines of business. I think Uber Freight has a lot of potential to make money (and might already be doing so?). I'm a little skeptical of Uber Eats, though.
tjpaudio 8y ago
I'm not quite sure everyone discussing this, including the economist article author, is in the loop with why Lyft and Uber are getting valued the way they are. Wall Street is not paying for a taxi company, they are betting that Uber and Lyft are the best poised to first rollout driverless ride sharing, i.e. one of them will own and monopolize patentable tech that the mass public wants to use. The existing experience is a commodity business where profits go to zero, that's well known and old news.
- perfmode 8y ago
  Driverless ride sharing isn’t coming, in a meaningful way*, in the next ten years, I’m willing to bet my house on that. Meaningful such that it actually delivers monetarily
  - tjpaudio 8y ago
    While I would agree with you, driverless tech is in fact the reason behind the valuation and balance sheet deficit. No large investors at this point think they are going to get a dividend paying profitable commodity business. *edit for grammar
  - rand0mthought 8y ago
    Do you plan to short UBER on amount of your house cost?
    - idlewords 8y ago
      That would be a bet on both rational markets and lack of driverless technology. That's a very different bet.
    - deleted 8y ago
      [deleted]
  - leesec 8y ago
    We absolutely can make some bets if you are serious.
tw1010 8y ago
Theoretically, couldn't they just fire almost all non-maintenance engineers and continue running the app without building new features? Wouldn't that make them profitable instantly?
- ghaff 8y ago
  Stopping expanding would probably have a bigger impact. Are they really doing a lot of new features/incremental infrastructure development at this point? (Though I don't know how much they're still blowing on self-driving.)
viach 8y ago
My observation - Uber is starting to have hard times competing on local market. The quality of local competitors - their apps, fleet and service overall is growing and Uber seems trying to reduce costs in this situation, which probably won't help in a way, so to speak.
m_ke 8y ago
With all of the ride sharing companies burning money it seems like the real bet here is being the last one standing. If Lyft folds, Uber will have much more leverage to play with the margins.
- swarnie_ 8y ago
  This is basically it. I have a choice between 4 services in my city. I pick the cheapest one whenever i want to go somewhere (Thanks VC cash burn) Last man standing gets the monopoly.
rchaud 8y ago
Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every project/sale. If you aren't able to achieve this, your pricing, product-market fit, etc. have failed, because the all-knowing, all-equilibrium-izing market has spoken. Every politician out there shows reverence for the 'small businessperson' taking risks and bringing jobs and tax revenue into their communities. But once in office, the people they meet with are Travis Kalachian and others, people who cannot make a profit, but are excellent at convincing rich investors that they should make Travis a millionaire. The reality is that a VC-backed company can simply outprice any competitor, and if it's not enough, can lobby city hall to change the laws to favour them. And this cash spigot can stay on for years, as long as you can show you're gaining customers every quarter. If you're a big enough play, you can move your whole HQ to a low-tax friendly country and administer local operations from there. The jobs that are created by this are right around minimum-wage level, so how is this supposed to create wealth for anybody except the shareholders who got in early with cheap valuations?
- JimboOmega 8y ago
  The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start a company is one with huge barriers to entry that requires a ton of money to get started. Yet that seems to have done quite well recently. Squashing minimum wage service providers seems to be merely a side effect... these companies can't really make money EVEN WHEN they ignore regulations and exploit their not-technically-employees.
  - Traster 8y ago
    I think that's a really interesting concept. People think Uber will reach a scale where either it can use automation to reduce costs or jack up prices. It may well be the other way around - as it matures regulations catch up and the loopholes it was using to keep costs down disappear and their costs slowly increase instead.
chriselles 8y ago
It’s so very hard to find any ride share profit Signal within all the Noise of monetary policy and VC weaponisation of capital. Airlines at least have the possibility of temporarily defending margins on city pairs with mismatched supply/demand. Perhaps surge pricing on ride share is an analog to that. The accumulated debts of ride share players seems akin to picking up pennies on ground getting stickier and the steamrollers are accelerating. It will be interesting to see what happens if/when full spectrum subscription ride share options become available.
pochamago 8y ago
What's the point of these speculative pieces that just list pros and cons? Give me actual projections, explore what it would take for them to be profitable. Otherwise it's just not that interesting
- teej 8y ago
  Authors who write for the Economist are anonymous, so there’s little incentive for making a bold call because there’s no payoff for being right.
- basetop 8y ago
  Will the Patriots win the Superbowl? Will Brad and Angelia get back together? Will Biden beat Sanders? So much of the news is now just speculative junk where after you finish reading the article, you realize you got nowhere and just wasted your time. Sometimes I'm embarrassed at how much time I've wasted on junk news. "Uber can't make money and here is why" is a factual claim and news. Those are the stories that the economist should be writing. "Can Uber ever make money" is pure speculation and a waste of time.
- umeshunni 8y ago
  The people writing these pieces have neither the depth, nor the insights to generate those projections. If they did, they wouldn't be writing blog posts for ads clicks.
klaudius 8y ago
No. Relevant article by an expert: https://www.nakedcapitalism.com/2019/04/hubert-horan-can-uber-ever-deliver-part-nineteen-ubers-ipo-prospectus-overstates-its-2018-profit-improvement-by-5-billion.html
m3kw9 8y ago
So UBER is just an more advanced cab company. You call a driver to drive you from A to B. It tries to under cut the traditional cab company significantly, and unfortunately that means a loss is needed until they can get rid of drivers using autonomous systems. At that time when it will also drive the cost down as they will Not be the only one with autonomous systems. It will look more like a commodity unless you are an monopoly
deleted 8y ago
[deleted]
temp99990 8y ago
I would love an all you can ride monthly subscription. I know Uber/Lyft have done limited trials but nothing truly an unlimited subscription.
- basementcat 8y ago
  I would totally Moviepass the crap out of this. Road trips across Utah and the Colorado Rockies, Pacific Coast Highway, etc. Amtrak used to have a similar pass arrangement.
  - temp99990 8y ago
    There would be limits for this to work, like a geofence
habosa 8y ago
I want to talk to someone who has invested in Lyft (or plans to do so for Uber) through the public markets and is in it for a long-term buy and hold. Like someone who really thinks the share price represents the net present value of all future cash streams for Lyft/Uber. I think I'd have a hard time finding someone like this. You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more.
- basementcat 8y ago
  > You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more. This is why people invest in gold and dogecoins.
- miguelmota 8y ago
  > you just have to believe you can sell your piece of the company to the next guy for more. Almost sounds like a Ponzi scheme
cs702 8y ago
Betteridge's law of headlines: "Any headline that ends in a question mark can be answered by the word no."[a] This opinion piece makes a compelling case that profitability will be hard to come by for Uber, Lyft, and their various smaller competitors. [a] https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...
3327 8y ago
Yes Uber can make money, once they have an EV that selfdrives.
rossdavidh 8y ago
No.
nsxwolf 8y ago
Uber might make sense as a public utility. If it's going to lose money no matter what, why not fund it like public transportation? Lots of taxes on the back end offset by user fees to take some of the sting off and mitigate overuse.
- arcticfox 8y ago
  > If it's going to lose money no matter what, why not fund it like public transportation? Why would we as a society care if Uber exists enough to socialize the cost of it? I kind of like using Uber, but probably not enough to justify footing the full bill for it (thank you VCs).
viburnum 8y ago
Whether or not it makes money, Uber is making cities more polluted and less safe already.
connorcodes 8y ago
Well, this may drive a crowd away, but maybe the best way for monetization is to make Uber a subscription based thing. Obviously, it would have to be cheap though.
- connorcodes 8y ago
  Or developing driverless cars and shoveling all the profits.
- xenospn 8y ago
  Moviepass tried do so the subscription thing on a very large scale and that didn't really work. Netflix pulls it off since they own most of the content and some of the distribution network.
  - toasterlovin 8y ago
    Netflix pulls it off because they have nearly 0% cost of goods sold, so it doesn't matter how much you use Netflix, nearly all of your subscription price contributes to profit. Not so with companies that sell physical goods and services.
  - scarface74 8y ago
    It didn’t work for Moviepass because they were trying to sell a subscription at a price that was less than one movie a month. AMC is doing it quite successfully. The difference? - they made a deal with the movie distributors to account for all shows to be sold for $8.99. AMC keeps 50-70%. Worse case, AMC pays $6.30 per movie. Movie Pass had to pay the full retail price. - AMC has crazy margins on concessions. Add to that the theatres with bars and full restaurants. - They make money on pre movie advertising.
carapace 8y ago
I always try to bring this up in re: Uber/Lyft et. al.: https://www.ianwelsh.net/the-market-fairy-will-not-solve-the-problems-of-uber-and-lyft/ https://www.ianwelsh.net/the-market-fairy-will-not-solve-the...? > Here is the thing about Uber and Lyft (and much of the “sharing economy”). > They don’t pay the cost of their capital. > The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human. > These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills.
mruts 8y ago
I would say.. no? The optimal solution would be an exchange that provided order books with bid/asks for each passanger and driver. Alternatively you could have a real-time auction to make it easier for the passanger. The exchange could take a 5-10% cut on each ride.
linuxftw 8y ago
I think Uber can easily make money if they function more as a marketplace and less as an opaque transportation company. Their job is to connect riders to potential taxi providers (which is what they are, since they're all 'contractors'). Contractors could have a rating that's viewable before accepting a ride offer from the driver. Fire almost all of their staff, just need a skeleton crew to keep the webstore and ride-match stuff up. Stop wasting money on self driving stuff, it's never going to happen. Take a flat rate per-ride, done.
crazygringo 8y ago
Uber isn't in the taxi business, it's in the self-driving car business. Taxis with drivers are just a stopgap, just like DVD's were a stopgap for Netflix. The Economist is right that there are few real network effects or moats around the taxi business. But Uber's valuation depends on it: - Developing the best driverless tech - Being able to roll driverless taxis out to an established customer base faster and at far larger scale than anyone else (main advantage over Waymo/Tesla) - Using a headstart in driverless tech, compared with huge data advantage from millions of Uber rides, to maintain the #1 position Of course all this depends on Uber being able to develop the best self-driving tech, and getting such a data+scale first-mover advantage to stay ahead of competitors. Skeptics will say Waymo will have the best tech, and expand/scale its taxi service effortlessly, and thus that Uber's existing customer base doesn't provide any advantage at all -- everyone will just jump ship from Uber to Waymo.
- natch 8y ago
  As a customer I would just use whatever is cheap, safe, and fun. Tesla M3P, no chatty-but-dull driver = cheap, 5+ star safety rating = safe, and performance = fun.
miguelmota 8y ago
Uber wants to be the Walmart of taxis where they start with super cheap pricing to hook in new customers and then turn the switch on once everyone is dependent on them. It'll be very hard or impossible for Uber to be a monopoly and having more competitors means the prices will have to compete to remain attractive to people. An unlikely idea for Uber becoming profitable is if they form a cartel with Lyft and other Uber-esque services to give all users no choice but to pay the high prices, but then they'll be competing with traditional taxi services once again.
tardismechanic 8y ago
Here’s the full article: https://outline.com/endjbs https://outline.com/endjbs
jtlienwis 8y ago
Re Competition Taxis or Uber are not always the cheapest way. One of my friends used to do a lot of travelling to Tokyo on work assignments. The others from the company always hailed a cab and ended up paying $100 for a trip from the airport to the downtown hotels. My friend would jump onto the Tokyo subway and was always there at the hotel to greet the rest of them when their cabs would arrive. He usually paid just a few bucks for the subway token. Myself, I would sometimes get rides in the day from people I just met on the plane. But then it was a more trusting time. But maybe there is an app there that pairs people arriving in the same town. Those that have their cars in the airport parking lot and are willing to share a ride and those that are willing to pay a few bucks.
gyre007 8y ago
I feel like there is a hidden metaphor for OSS companies hiding in this article: > Customers benefited, but no one else did Customers being the users of OSS, the ones not benefiting being the companies making it
thelock85 8y ago
Uber will eventually profit from long-term SAAS+Ops+robots contracts with municipalities and governments, assuming they can grow/operate for that long and out-lobby and out-execute Lyft, Ford, Tesla, Google et al.
aaron695 8y ago
There's is zero information in this article. Uber probably has 1 billion+ $ worth of IT structure and presumably 99 Billion worth of goodwill and other IP. A good start for a article that cares would be to estimate this more accurately. So if it's all the same how can someone break into this market? Who can go out and invest a $ billion + to see if they can crack the market knowing where ever they start Uber will smash them?
WheelsAtLarge 8y ago
No, in its current state, they can't be profitable. Other transportation options will become more desirable if Uber had to truly charge what it costs to transport a customer so for now and the near future they have to subsidize the rides which kills the possibility of profit. Autonomous cars will help but that won't happen for years, 5-10 maybe more. Additionally, if autonomy becomes a reality for Uber it will happen for other modes of transportation too so they will have to compete there too. That will be even harder since it's easier to get a bunch of cars working once the tech is available. Also Uber will not survive as it stands now. Regulations and public pressure will eventually force it to conform to something similar to a very large cab company. Every industry eventually gets hit by consolidation. A business of individual drivers can be even more profitable if it joins drivers into groups. They become more reliable, they cost less to maintain and they gain power that they can leverage against large industry actors. Maybe then, it will become profitable. But that won't happen until the industry matures.
- onlyrealcuzzo 8y ago
  I wonder if self-driving cars will be like Fusion, but instead of always being 20-40 years away, it's always 5-10 years away. I do really feel like Waymo will prove successful in specific environments THIS year and increment slowly, and eventually our transportation habits will change to better utilize a cheaper, safer form of transportation. But I wouldn't be surprised if I'm still saying that ten years from now.
myrandomcomment 8y ago
Yes, as soon as the car drives itself.
- everetm 8y ago
  Tesla rents out their ai customer owned fleet taxi service to Uber and Lyft
tjmehta 8y ago
Uber made 997 million in profit in 2018. Read the S1. ️ #fakenews
- foepys 8y ago
  Where do you get this from? They lost $3B in 2018. Uber's S1 clearly states as one of their risk factors to maybe never make a profit.
strathmeyer 8y ago
Uber's plan is to own every car once self-driving cars are realized.
bigend 8y ago
Is Uber yet selling the information on who took a ride, when, from where and to where? I expect them to monetize that. Privacy? Is that something edible?
bariswheel 8y ago
The mouse changed the way we work, and it got commoditized. Just because a company was first to adopt and make a business out of a disruptive technology doesn't mean it's going to corner the market with it. In fact, history shows that it's not the best approach to be the first adopter of a technology (Kodak, Altavista, etc..)
lpcam33 8y ago
If I was a car manufacturer I would invest heavily on Uber. The fact that people need to have a new car to work for Uber is one of the main factors that keep the auto industry out of recession.
- PhantomGremlin 8y ago
  people need to have a new car to work for Uber Quite the opposite. There have been complaints in this thread about how the cars are getting shittier and shittier. For Lyft for Oregon the car needs to be 2004 or newer for most of the smaller cities, 2009 or newer for Portland. https://www.lyft.com/driver-application-requirements/oregon https://www.lyft.com/driver-application-requirements/oregon Uber is much the same. 15 years old in rural areas, 10 years old in Portland. https://www.uber.com/drive/eastern-oregon/vehicle-requirements/ https://www.uber.com/drive/eastern-oregon/vehicle-requiremen... https://www.uber.com/drive/portland/vehicle-requirements/ https://www.uber.com/drive/portland/vehicle-requirements/ Realistically, a 10 year old car is closer to "junkyard" than "new".
Haga 8y ago
The same way Amazon can make shareholder money back. Stay out of reach of the law forever. In ueber case it bets on cutting out the trad taxicompetition- one way or another. Means ueber will want to be the market structure provider like Amazon for rides Haring and bets on becoming mandatory for all mobility related services. It really jars the mind- all those billions betted against trust busting.
deleted 8y ago
[deleted]
thkim 8y ago
Uber can't make money from taxi service. It's trying to mimic Amazon model where profit comes from subsidiary service. Uber is yet to find such thing. Without valid profit source I don't understand how SEC approves an IPO for a license to suck away average joe investment. Uber is walking a very thin line between being a hoax and a business.
la_fayette 8y ago
Why use uber? Just take a bicycle...
sjg007 8y ago
If there is enough demand. So if people stop buying cars and rely on Uber then maybe.
smartbit 8y ago
http://archive.is/LP5BL http://archive.is/LP5BL
olejorgenb 8y ago
This might be ignorant, but I've wondered about this for a while. Isn't Uber essentially a software company? The drivers doesn't get anything besides their share of the fares? According to the free part of the article they've lost 7.9 billion dollars since 2009. How expensive can it possible be to develop and operate their software? According to some sources uber takes a cut from 20-25% (although some claim much higher fractions in practice) http://www.businessofapps.com/data/uber-statistics/#6 http://www.businessofapps.com/data/uber-statistics/#6 claims ~10B _quarterly_ revenue for 2018, with net loss at close to 1B. (EDIT: seem the revenue is counted as full fare price - not ubers cut, so that brings "actual" revenue to ~2B/Q) How are they not making money..? Lots of normal taxi services have booking apps too. If they IPO it'll be interesting to see a more detailed breakdown of their costs. EDIT2: found the IPO prospectus including some numbers: https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm#toc647752_9 https://www.sec.gov/Archives/edgar/data/1543151/000119312519...
sunstone 8y ago
Tesla is in the best position to win in this arena. As the article points out it's cutthroat so the one with the lowest costs, acquisition and operation will win. Telsa makes it's own cars, the cars have super low operating costs: built for 1m miles, almost no ongoing maintenance, powered by electricity that is already much cheaper than gas and will continue to get cheaper. And finally no driver with self driving software. No one else has this combination attributes for the lowest cost operation. Though it could be Tesla after it's bought by Google.

287 points by prostoalex 8y ago

uptown 8y ago

Outline Link: https://outline.com/endjbs https://outline.com/endjbs

dymk 8y ago
If someone else might own the copyright to it, don't submit it. Outline is for reading pages that: 1) you own the rights to, 2) is in the public domain, 3) constitutes fair use, or 4) you have consent of the copyright holder.

wintorez 8y ago

Uber is not making money? How? Why?

micael_dias 8y ago
Their expenses are higher than their revenue.
- askafriend 8y ago
  If I bought 10 McDonald's franchises today, my expenses would be higher than my revenue for probably the entire first year if not more. If things are going well, and I make another bet by buying 10 more, my expenses would continue being higher than my revenue (even if the first 10 stores become profitable). If I keep doing this, I may not show a profit on my balance sheet for a long time. This example illustrates why "expenses are higher than revenue" doesn't reveal anything and that such a simplistic picture of a business is useless.
  - scarface74 8y ago
    What would it reveal if your marginal costs were greater than your marginal revenue? Has anyone done a cohort analysis?
uptown 8y ago
Here's two answers: https://twitter.com/neilanalien/status/627873374505562112?lang=en https://twitter.com/neilanalien/status/627873374505562112?la...
jandrese 8y ago
They're blowing a ton of money on R&D for autonomous cars. Also they are spending a fortune on lawyers to fight every municipal cab company in the world. Also, their business model is undercutting the existing competition, which makes big profits hard to come by.

dvh 8y ago

It seems like it it's the same with shared bikes. The only one making money are bikes manufacturer.

TruthSHIFT 8y ago

Keep in mind that this may not change when driverless cars become widely available. Maintaining a fleet thousands of driverless cars may prove to be more expensive than crowdsourcing a vehicle fleet.

rat9988 8y ago
If uber drivers make enough to make their cars a worthwile investment, then I'd assume a fleet of driverless cars are profitable.
- kiran-rao 8y ago
  Do Uber drivers make enough to cover complete vehicle costs? I remember reading that after total costs of ownership (depreciation, insurance, gas, maintenance, etc) Uber drivers really aren't making much.
  - britch 8y ago
    As of 2018 it was something like $8.55 an hour median in the US accounting for costs of upkeep. https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-wages-median-report https://www.theguardian.com/technology/2018/mar/01/uber-lyft...
  - slfnflctd 8y ago
    There are so many ways to slice and dice those numbers. Drivers who already own a car they aren't going to get rid of would be paying a lot of those costs anyway (other than wear & tear and fuel). Taxes are all over the place; some pay 30%+, others nothing. What it really comes down to is the ratio of cost of living for the driver to the amount they take home after buying gas. If I'm almost broke, want to buy more stuff than I can afford, and know I can get $100 worth of rides for $20 worth of gas in less than 2 days, the decision has already been made. As long as I have close to the same buying power, this will remain true. It's a delicate balance, though, and when you're competing against people in more dire straits who maybe aren't as good at math, at a certain point it could become unviable.
- 8y ago

pbreit 8y ago

Uber prints money on non-pool rides in mature markets. The losses are all going to fund expansion and single-rider pools.

opportune 8y ago
I think they print money on pooled rides in certain cases too. Especially going to/from the airport.
0x262d 8y ago
source?
- pbreit 8y ago
  https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm https://www.sec.gov/Archives/edgar/data/1543151/000119312519... $940 million in Contribution Profit in 2018 and that does not net out new markets and non-pool rides. So, to re-affirm more emphatically, Uber prints money on non-pool rides in mature markets.

skywhopper 8y ago

There is literally no way for a mass-market taxi service to make money unless they have a monopoly, or some unexpected disruptive technology comes along that gives one company an unassailable advantage in lowering costs. The Uber app was the original innovation, but it's not particularly innovative anymore. Besides Lyft, traditional taxi companies have similar apps in some markets. Skirting regulation and good labor practices were also supposed to help, but that can't last once you become competitive with the establishment. Self-driving cars were supposed to lower labor costs, but that's not going to be a thing for decades if it ever works. But even if it does, it won't be an exclusive technology. They won't be able to make any more profit from it. If their costs go down, so will everyone else's and they won't be able to undercut the competition without continuing to lose money.

prolepunk 8y ago
If self-driving technology is mature enough to be used and there are several implementations to choose from, what stops care manufacturers to go after that market directly and undercutting everyone else? * They have industrial facilities to build cars * They have dealership networks to repair cars * They have capital or can borrow easily to do it I can even argue that all that stops car manufacturers from operating this are government regulations -- taxi medallions as well as anti-monopoly laws. Once Uber, lyft and the like undercut those regulations, someone else can undercut them.
- ghaff 8y ago
  The same thing that largely keeps them from operating dealers (yes, now there are laws and contracts, but it was the manufacturers who wanted dealers in the first place) and rental car companies. Although there are legal impediments, companies often want to focus on a specific part of the value chain rather than having to own the whole thing.
  - Pamar 8y ago
    Car2Go is a subsidiary of Daimler, though. And I suppose that being able to produce a large number of cars (all identical models and setups, all the same colour etc.) is something that an automotive company can easily leverage.

govg 8y ago

I can only see them making money in three ways : - They scale up massively and capture a huge fraction of the ride sharing market, thus allowing them to offer low cost / low margin rides, but making up for it by volumes : At least in India, they are in a good position, but they seem to have conceded the other markets with high potential for growth like SE Asia and China. - They have a premium offering that is actually quite a trend-setter : Revive the Uber Black service and take it up a notch, target richer clientele which will be willing to pay a premium to ride in a much better car and with trained chauffeurs. - They push heavily in the pooling space - this allows them to use their vehicular inventory better as well as drive up margins per ride : This doesn't seem to be a huge focus for them as of now, but it could change. The other big change that could transform their fortunes is if they put out a viable self driving product. I do not think it'll be economically profitable, or even technologically viable in the near term.

dcolkitt 8y ago
Option 4: Uber uses the expertise, infrastructure, and brand it built in ridesharing to expand into the becoming the de facto standard for timely last mile delivery. This is why UberEats is such a major strategic focus for the company. It's proof of concept that they can do more than be a taxi. An efficient platform for quickly and cheaply ferrying around stuff around town is a way bigger market than ridesharing. We're not only talking about the obvious examples like residential packages, groceries, and laundry. But entirely new business models that didn't previously exist, because there's no efficient last-mile delivery solution. Cloud kitchen are an example of a nascent industry that could only emerge in a post-Uber world.
- idlewords 8y ago
  Saying that we're going to work to dominate a low-margin sector at a staggering loss for years, so that we can enter an even lower-margin established industry and recoup our losses there, is a gutsy proposition.
  - dcolkitt 8y ago

Invictus0 8y ago

What is the point of this article? If you're going to ask a question, do some work to actually find an answer.

losvedir 8y ago

They have other lines of business. I think Uber Freight has a lot of potential to make money (and might already be doing so?). I'm a little skeptical of Uber Eats, though.

tjpaudio 8y ago

I'm not quite sure everyone discussing this, including the economist article author, is in the loop with why Lyft and Uber are getting valued the way they are. Wall Street is not paying for a taxi company, they are betting that Uber and Lyft are the best poised to first rollout driverless ride sharing, i.e. one of them will own and monopolize patentable tech that the mass public wants to use. The existing experience is a commodity business where profits go to zero, that's well known and old news.

perfmode 8y ago
Driverless ride sharing isn’t coming, in a meaningful way*, in the next ten years, I’m willing to bet my house on that. Meaningful such that it actually delivers monetarily
- tjpaudio 8y ago
  While I would agree with you, driverless tech is in fact the reason behind the valuation and balance sheet deficit. No large investors at this point think they are going to get a dividend paying profitable commodity business. *edit for grammar
- rand0mthought 8y ago
  Do you plan to short UBER on amount of your house cost?
  - idlewords 8y ago
    That would be a bet on both rational markets and lack of driverless technology. That's a very different bet.
  - deleted 8y ago
    [deleted]
- leesec 8y ago
  We absolutely can make some bets if you are serious.

tw1010 8y ago

Theoretically, couldn't they just fire almost all non-maintenance engineers and continue running the app without building new features? Wouldn't that make them profitable instantly?

ghaff 8y ago
Stopping expanding would probably have a bigger impact. Are they really doing a lot of new features/incremental infrastructure development at this point? (Though I don't know how much they're still blowing on self-driving.)

viach 8y ago

My observation - Uber is starting to have hard times competing on local market. The quality of local competitors - their apps, fleet and service overall is growing and Uber seems trying to reduce costs in this situation, which probably won't help in a way, so to speak.

m_ke 8y ago

With all of the ride sharing companies burning money it seems like the real bet here is being the last one standing. If Lyft folds, Uber will have much more leverage to play with the margins.

swarnie_ 8y ago
This is basically it. I have a choice between 4 services in my city. I pick the cheapest one whenever i want to go somewhere (Thanks VC cash burn) Last man standing gets the monopoly.

rchaud 8y ago

Looking at Uber, WeWork, JustEat etc., I get the feeling there's a growing gap between what we were brought up to believe about entrepreneurship and innovation vs. what the reality is. We're all familiar with the '>50% of small businesses fail' stat (not the real number) and that we should be toiling and not taking a salary for years until we break even, i.e. reach a point where we're no longer losing money on every project/sale. If you aren't able to achieve this, your pricing, product-market fit, etc. have failed, because the all-knowing, all-equilibrium-izing market has spoken. Every politician out there shows reverence for the 'small businessperson' taking risks and bringing jobs and tax revenue into their communities. But once in office, the people they meet with are Travis Kalachian and others, people who cannot make a profit, but are excellent at convincing rich investors that they should make Travis a millionaire. The reality is that a VC-backed company can simply outprice any competitor, and if it's not enough, can lobby city hall to change the laws to favour them. And this cash spigot can stay on for years, as long as you can show you're gaining customers every quarter. If you're a big enough play, you can move your whole HQ to a low-tax friendly country and administer local operations from there. The jobs that are created by this are right around minimum-wage level, so how is this supposed to create wealth for anybody except the shareholders who got in early with cheap valuations?

JimboOmega 8y ago
The question (with Uber in particular) is that if this business model really covers up a huge ponzi scheme. Before the last decade (or even 5 years?) the amount of money some of these companies have been raising would have been unheard of and required an IPO. But if you can keep finding ever bigger investors to give you ever more money... It's a really weird reality, because typically the worst kind of place to start a company is one with huge barriers to entry that requires a ton of money to get started. Yet that seems to have done quite well recently. Squashing minimum wage service providers seems to be merely a side effect... these companies can't really make money EVEN WHEN they ignore regulations and exploit their not-technically-employees.
- Traster 8y ago
  I think that's a really interesting concept. People think Uber will reach a scale where either it can use automation to reduce costs or jack up prices. It may well be the other way around - as it matures regulations catch up and the loopholes it was using to keep costs down disappear and their costs slowly increase instead.

chriselles 8y ago

It’s so very hard to find any ride share profit Signal within all the Noise of monetary policy and VC weaponisation of capital. Airlines at least have the possibility of temporarily defending margins on city pairs with mismatched supply/demand. Perhaps surge pricing on ride share is an analog to that. The accumulated debts of ride share players seems akin to picking up pennies on ground getting stickier and the steamrollers are accelerating. It will be interesting to see what happens if/when full spectrum subscription ride share options become available.

pochamago 8y ago

What's the point of these speculative pieces that just list pros and cons? Give me actual projections, explore what it would take for them to be profitable. Otherwise it's just not that interesting

teej 8y ago
Authors who write for the Economist are anonymous, so there’s little incentive for making a bold call because there’s no payoff for being right.
basetop 8y ago
Will the Patriots win the Superbowl? Will Brad and Angelia get back together? Will Biden beat Sanders? So much of the news is now just speculative junk where after you finish reading the article, you realize you got nowhere and just wasted your time. Sometimes I'm embarrassed at how much time I've wasted on junk news. "Uber can't make money and here is why" is a factual claim and news. Those are the stories that the economist should be writing. "Can Uber ever make money" is pure speculation and a waste of time.
umeshunni 8y ago
The people writing these pieces have neither the depth, nor the insights to generate those projections. If they did, they wouldn't be writing blog posts for ads clicks.

klaudius 8y ago

No. Relevant article by an expert: https://www.nakedcapitalism.com/2019/04/hubert-horan-can-uber-ever-deliver-part-nineteen-ubers-ipo-prospectus-overstates-its-2018-profit-improvement-by-5-billion.html

m3kw9 8y ago

So UBER is just an more advanced cab company. You call a driver to drive you from A to B. It tries to under cut the traditional cab company significantly, and unfortunately that means a loss is needed until they can get rid of drivers using autonomous systems. At that time when it will also drive the cost down as they will Not be the only one with autonomous systems. It will look more like a commodity unless you are an monopoly

deleted 8y ago

[deleted]

temp99990 8y ago

I would love an all you can ride monthly subscription. I know Uber/Lyft have done limited trials but nothing truly an unlimited subscription.

basementcat 8y ago
I would totally Moviepass the crap out of this. Road trips across Utah and the Colorado Rockies, Pacific Coast Highway, etc. Amtrak used to have a similar pass arrangement.
- temp99990 8y ago
  There would be limits for this to work, like a geofence

habosa 8y ago

I want to talk to someone who has invested in Lyft (or plans to do so for Uber) through the public markets and is in it for a long-term buy and hold. Like someone who really thinks the share price represents the net present value of all future cash streams for Lyft/Uber. I think I'd have a hard time finding someone like this. You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more.

basementcat 8y ago
> You don't have to believe the company will make money, you just have to believe you can sell your piece of the company to the next guy for more. This is why people invest in gold and dogecoins.
miguelmota 8y ago
> you just have to believe you can sell your piece of the company to the next guy for more. Almost sounds like a Ponzi scheme

cs702 8y ago

Betteridge's law of headlines: "Any headline that ends in a question mark can be answered by the word no."[a] This opinion piece makes a compelling case that profitability will be hard to come by for Uber, Lyft, and their various smaller competitors. [a] https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headlines https://en.wikipedia.org/wiki/Betteridge%27s_law_of_headline...

3327 8y ago

Yes Uber can make money, once they have an EV that selfdrives.

rossdavidh 8y ago

No.

nsxwolf 8y ago

Uber might make sense as a public utility. If it's going to lose money no matter what, why not fund it like public transportation? Lots of taxes on the back end offset by user fees to take some of the sting off and mitigate overuse.

arcticfox 8y ago
> If it's going to lose money no matter what, why not fund it like public transportation? Why would we as a society care if Uber exists enough to socialize the cost of it? I kind of like using Uber, but probably not enough to justify footing the full bill for it (thank you VCs).

viburnum 8y ago

Whether or not it makes money, Uber is making cities more polluted and less safe already.

connorcodes 8y ago

Well, this may drive a crowd away, but maybe the best way for monetization is to make Uber a subscription based thing. Obviously, it would have to be cheap though.

connorcodes 8y ago
Or developing driverless cars and shoveling all the profits.
xenospn 8y ago
Moviepass tried do so the subscription thing on a very large scale and that didn't really work. Netflix pulls it off since they own most of the content and some of the distribution network.
- toasterlovin 8y ago
  Netflix pulls it off because they have nearly 0% cost of goods sold, so it doesn't matter how much you use Netflix, nearly all of your subscription price contributes to profit. Not so with companies that sell physical goods and services.
- scarface74 8y ago
  It didn’t work for Moviepass because they were trying to sell a subscription at a price that was less than one movie a month. AMC is doing it quite successfully. The difference? - they made a deal with the movie distributors to account for all shows to be sold for $8.99. AMC keeps 50-70%. Worse case, AMC pays $6.30 per movie. Movie Pass had to pay the full retail price. - AMC has crazy margins on concessions. Add to that the theatres with bars and full restaurants. - They make money on pre movie advertising.

carapace 8y ago

I always try to bring this up in re: Uber/Lyft et. al.: https://www.ianwelsh.net/the-market-fairy-will-not-solve-the-problems-of-uber-and-lyft/ https://www.ianwelsh.net/the-market-fairy-will-not-solve-the...? > Here is the thing about Uber and Lyft (and much of the “sharing economy”). > They don’t pay the cost of their capital. > The wages they pay to their drivers are less than the depreciation of the cars and the expense of keeping the drivers fed, housed, and healthy. They pay less than minimum wage in most markets, and, in most markets, that is not enough to pay the costs of a car plus a human. > These business models are ways of draining capital from the economy and putting them into the hands of a few investors and executives. They prey on desperate people who need money now, even if the money is insufficient to pay their total costs. Drivers are draining their own reserves to get cash now, but, hey, they gotta eat and pay the bills.

mruts 8y ago

I would say.. no? The optimal solution would be an exchange that provided order books with bid/asks for each passanger and driver. Alternatively you could have a real-time auction to make it easier for the passanger. The exchange could take a 5-10% cut on each ride.

linuxftw 8y ago

I think Uber can easily make money if they function more as a marketplace and less as an opaque transportation company. Their job is to connect riders to potential taxi providers (which is what they are, since they're all 'contractors'). Contractors could have a rating that's viewable before accepting a ride offer from the driver. Fire almost all of their staff, just need a skeleton crew to keep the webstore and ride-match stuff up. Stop wasting money on self driving stuff, it's never going to happen. Take a flat rate per-ride, done.

crazygringo 8y ago

Uber isn't in the taxi business, it's in the self-driving car business. Taxis with drivers are just a stopgap, just like DVD's were a stopgap for Netflix. The Economist is right that there are few real network effects or moats around the taxi business. But Uber's valuation depends on it: - Developing the best driverless tech - Being able to roll driverless taxis out to an established customer base faster and at far larger scale than anyone else (main advantage over Waymo/Tesla) - Using a headstart in driverless tech, compared with huge data advantage from millions of Uber rides, to maintain the #1 position Of course all this depends on Uber being able to develop the best self-driving tech, and getting such a data+scale first-mover advantage to stay ahead of competitors. Skeptics will say Waymo will have the best tech, and expand/scale its taxi service effortlessly, and thus that Uber's existing customer base doesn't provide any advantage at all -- everyone will just jump ship from Uber to Waymo.

natch 8y ago
As a customer I would just use whatever is cheap, safe, and fun. Tesla M3P, no chatty-but-dull driver = cheap, 5+ star safety rating = safe, and performance = fun.

miguelmota 8y ago

Uber wants to be the Walmart of taxis where they start with super cheap pricing to hook in new customers and then turn the switch on once everyone is dependent on them. It'll be very hard or impossible for Uber to be a monopoly and having more competitors means the prices will have to compete to remain attractive to people. An unlikely idea for Uber becoming profitable is if they form a cartel with Lyft and other Uber-esque services to give all users no choice but to pay the high prices, but then they'll be competing with traditional taxi services once again.

tardismechanic 8y ago

Here’s the full article: https://outline.com/endjbs https://outline.com/endjbs

jtlienwis 8y ago

Re Competition Taxis or Uber are not always the cheapest way. One of my friends used to do a lot of travelling to Tokyo on work assignments. The others from the company always hailed a cab and ended up paying $100 for a trip from the airport to the downtown hotels. My friend would jump onto the Tokyo subway and was always there at the hotel to greet the rest of them when their cabs would arrive. He usually paid just a few bucks for the subway token. Myself, I would sometimes get rides in the day from people I just met on the plane. But then it was a more trusting time. But maybe there is an app there that pairs people arriving in the same town. Those that have their cars in the airport parking lot and are willing to share a ride and those that are willing to pay a few bucks.

gyre007 8y ago

I feel like there is a hidden metaphor for OSS companies hiding in this article: > Customers benefited, but no one else did Customers being the users of OSS, the ones not benefiting being the companies making it

thelock85 8y ago

Uber will eventually profit from long-term SAAS+Ops+robots contracts with municipalities and governments, assuming they can grow/operate for that long and out-lobby and out-execute Lyft, Ford, Tesla, Google et al.

aaron695 8y ago

There's is zero information in this article. Uber probably has 1 billion+ $ worth of IT structure and presumably 99 Billion worth of goodwill and other IP. A good start for a article that cares would be to estimate this more accurately. So if it's all the same how can someone break into this market? Who can go out and invest a $ billion + to see if they can crack the market knowing where ever they start Uber will smash them?

WheelsAtLarge 8y ago

No, in its current state, they can't be profitable. Other transportation options will become more desirable if Uber had to truly charge what it costs to transport a customer so for now and the near future they have to subsidize the rides which kills the possibility of profit. Autonomous cars will help but that won't happen for years, 5-10 maybe more. Additionally, if autonomy becomes a reality for Uber it will happen for other modes of transportation too so they will have to compete there too. That will be even harder since it's easier to get a bunch of cars working once the tech is available. Also Uber will not survive as it stands now. Regulations and public pressure will eventually force it to conform to something similar to a very large cab company. Every industry eventually gets hit by consolidation. A business of individual drivers can be even more profitable if it joins drivers into groups. They become more reliable, they cost less to maintain and they gain power that they can leverage against large industry actors. Maybe then, it will become profitable. But that won't happen until the industry matures.

onlyrealcuzzo 8y ago
I wonder if self-driving cars will be like Fusion, but instead of always being 20-40 years away, it's always 5-10 years away. I do really feel like Waymo will prove successful in specific environments THIS year and increment slowly, and eventually our transportation habits will change to better utilize a cheaper, safer form of transportation. But I wouldn't be surprised if I'm still saying that ten years from now.

myrandomcomment 8y ago

Yes, as soon as the car drives itself.

everetm 8y ago
Tesla rents out their ai customer owned fleet taxi service to Uber and Lyft

tjmehta 8y ago

Uber made 997 million in profit in 2018. Read the S1. ️ #fakenews

foepys 8y ago
Where do you get this from? They lost $3B in 2018. Uber's S1 clearly states as one of their risk factors to maybe never make a profit.

strathmeyer 8y ago

Uber's plan is to own every car once self-driving cars are realized.

bigend 8y ago

Is Uber yet selling the information on who took a ride, when, from where and to where? I expect them to monetize that. Privacy? Is that something edible?

bariswheel 8y ago

The mouse changed the way we work, and it got commoditized. Just because a company was first to adopt and make a business out of a disruptive technology doesn't mean it's going to corner the market with it. In fact, history shows that it's not the best approach to be the first adopter of a technology (Kodak, Altavista, etc..)

lpcam33 8y ago

If I was a car manufacturer I would invest heavily on Uber. The fact that people need to have a new car to work for Uber is one of the main factors that keep the auto industry out of recession.

PhantomGremlin 8y ago
people need to have a new car to work for Uber Quite the opposite. There have been complaints in this thread about how the cars are getting shittier and shittier. For Lyft for Oregon the car needs to be 2004 or newer for most of the smaller cities, 2009 or newer for Portland. https://www.lyft.com/driver-application-requirements/oregon https://www.lyft.com/driver-application-requirements/oregon Uber is much the same. 15 years old in rural areas, 10 years old in Portland. https://www.uber.com/drive/eastern-oregon/vehicle-requirements/ https://www.uber.com/drive/eastern-oregon/vehicle-requiremen... https://www.uber.com/drive/portland/vehicle-requirements/ https://www.uber.com/drive/portland/vehicle-requirements/ Realistically, a 10 year old car is closer to "junkyard" than "new".

Haga 8y ago

The same way Amazon can make shareholder money back. Stay out of reach of the law forever. In ueber case it bets on cutting out the trad taxicompetition- one way or another. Means ueber will want to be the market structure provider like Amazon for rides Haring and bets on becoming mandatory for all mobility related services. It really jars the mind- all those billions betted against trust busting.

deleted 8y ago

[deleted]

thkim 8y ago

Uber can't make money from taxi service. It's trying to mimic Amazon model where profit comes from subsidiary service. Uber is yet to find such thing. Without valid profit source I don't understand how SEC approves an IPO for a license to suck away average joe investment. Uber is walking a very thin line between being a hoax and a business.

la_fayette 8y ago

Why use uber? Just take a bicycle...

sjg007 8y ago

If there is enough demand. So if people stop buying cars and rely on Uber then maybe.

smartbit 8y ago

http://archive.is/LP5BL http://archive.is/LP5BL

olejorgenb 8y ago

This might be ignorant, but I've wondered about this for a while. Isn't Uber essentially a software company? The drivers doesn't get anything besides their share of the fares? According to the free part of the article they've lost 7.9 billion dollars since 2009. How expensive can it possible be to develop and operate their software? According to some sources uber takes a cut from 20-25% (although some claim much higher fractions in practice) http://www.businessofapps.com/data/uber-statistics/#6 http://www.businessofapps.com/data/uber-statistics/#6 claims ~10B _quarterly_ revenue for 2018, with net loss at close to 1B. (EDIT: seem the revenue is counted as full fare price - not ubers cut, so that brings "actual" revenue to ~2B/Q) How are they not making money..? Lots of normal taxi services have booking apps too. If they IPO it'll be interesting to see a more detailed breakdown of their costs. EDIT2: found the IPO prospectus including some numbers: https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm#toc647752_9 https://www.sec.gov/Archives/edgar/data/1543151/000119312519...

sunstone 8y ago

Tesla is in the best position to win in this arena. As the article points out it's cutthroat so the one with the lowest costs, acquisition and operation will win. Telsa makes it's own cars, the cars have super low operating costs: built for 1m miles, almost no ongoing maintenance, powered by electricity that is already much cheaper than gas and will continue to get cheaper. And finally no driver with self driving software. No one else has this combination attributes for the lowest cost operation. Though it could be Tesla after it's bought by Google.