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Is anyone really surprised? Years before the IPO we knew they were not profitable in the least. We knew VC cash was subsidizing rides. We knew that their fut

• tempsy 7y ago
  It's still a 45B company...still the largest and most successful company to come out of SF this decade.
  • swampthinker 7y ago
    It's the most successful cashout for investors and early employees, but let's not act like Uber isn't still running on borrowed time.
  • ProAm 7y ago
    It's not successful though. WeWork is still valued at 47B technically speaking today. They are a company that only loses money, has a horrid culture and does some morally reprehensible things. Their true value is their logistics software. If they would lease/sell that to other industries they would be rich beyond belief.
    • vkou 7y ago
      What morally reprehensible things are done by WeWork?
      • ProAm 7y ago
        I was referring to Uber
      • lm28469 7y ago
        Their business is sketchy and their CEO is double sketchy. Type "wework" or "adam neumann" in google and you'll find plenty of sources
    • tempsy 7y ago
      Private valuations are not the same as public ones, especially one post-earnings and post-lockup.
      • ProAm 7y ago
        Every private company tries to turn those private valuations into public ones at IPO.
  • throwaway_law 7y ago
    >still the largest and most successful company to come out of SF this decade. That's a lot less reflective of UBER and more reflective of the type of startups SV is trying to take public. Look at any other SV Unicorn that IPO'd...take Twitter that IPO'd in 2013, it turned a profit one year since going public.
    • tempsy 7y ago
      I'm using market cap as a proxy for success not profit... Twitter isn't really a shining example of success either - their share price has been sideways for 6 years.
      • devicetray0 7y ago
        > I'm using market cap as a proxy for success not profit... Market cap is not and has never been a good proxy for success.
        • tempsy 7y ago
          I think you're referring to private valuations
  • JohnFen 7y ago
    If Uber counts as a successful company by SV standards, that's a pretty strong condemnation of SV standards.
    • tempsy 7y ago
      It's not a SV company - it's an SF company.
      • celticninja 7y ago
        If we assume the meant SF instead of SV, does that negate his point somehow?
        • JohnFen 7y ago
          Yes, I meant SF. I do find it amusing that I was called out on this, though, since in the past I've been called out for not including SF as part of SV.
          • deleted 7y ago
            [deleted]
    • barry-cotter 7y ago
      If it’s worth one third of its current market cap it’s worth $15B. For a company that’s ten years old that’s incredible.
      • JohnFen 7y ago
        I think measuring whether or not a company is successful solely by that yardstick is very dubious.
      • ewb 7y ago
        Turning $10 billion into $45 billion over 10 years isn't really that incredible. That's less growth than Comcast has had over the same period. Which most would not consider a dynamic incredible stock.
• hodder 7y ago
  Sure, but the same could be said of Tesla. Horrible employer, constant exec churn, unbelievable cash burn, what appears to be structural losses.... But Tesla still has a 56B mcap today. Uber is 46B. These VC/equity issue cash furnaces can go on longer than most can fathom if a subset of investors believe in the long term vision.
  • deweller 7y ago
    Tesla has arguably a more clear path to a profitable future. Uber's path to profitability is arguably much more speculative and dependent on risky technology advances.
    • drannex 7y ago
      Agreed. Not only did Tesla have a clear path, but they had a product that could sell at much higher margins, better quality control, not-so dubious legal ways of selling them, paid their employees decent wages (Uber... does not), and they won't have technology that can be copied and repeated by a second year student at uni. Uber and Tesla are not anywhere close to directly comparable.
    • aplummer 7y ago
      I think very clearly, I’m not a Tesla fan but the solar roof and car are both unique and the core fan base is very strong.
    • toong 7y ago
      Additionally, Tesla is pushing hard on battery tech etc, ... As far as I understand, Uber does some autonomous vehicles R&D, but the required tech advances will probably not be developed by them ?
  • dd36 7y ago
    Tesla is building a product. Automated dispatch is not protectable.
    • aSplash0fDerp 7y ago
• hluska 7y ago
  This will sound very naive (because it is), but I thought that the free market would see through the bullshit and value them appropriately. That is happening, just far more slowly than I imagined.
  • zanny 7y ago
    The valuation was largely over the general hype for self-driving vehicles. Those who thought they were imminent must have just been ignorant to how slow regulation moves and how risk averse corporations are to the potential fallout of being "first to market" with a self driving car that ends up with someone dead regardless of fault. As the hype dies down so does Ubers market cap.
    • ghaff 7y ago
      You also had a bunch of execs/founders in SV particularly trying to outcompete each other in their claims about how soon autonomous vehicles were going to arrive. This combined with tech that got to the point where it at least demoed well and a lot of people who really wanted to believe they'd never have to drive a car fell for it hook, line, and sinker. There will certainly be regulatory and liability issues to work through but if the tech were really ready for prime time I actually don't believe those those are showstoppers.
  • asdf333 7y ago
    at least its happening. you could argue that uber's insane valuations before were due to deluded vcs (non-free-market) now that its a publicly traded company and its financials are transparent to investors, the free market is doing what it is supposed to do.
• naravara 7y ago
  >We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. Nah. Right now their business model relies on having their labor bring their own capital. I've always seriously doubted that cutting the labor out of the equation and replacing it with capital that Uber now has to furnish and maintain was going to save all THAT much money. The numbers are all over the place, but from what I've been told once you factor in mileage costs, gas, and maintenance + cleaning of the vehicles most rideshare drivers are only earning somewhere from $1.50 to $3.00 an hour. If Uber then has to internalize all those costs plus add all the software maintenance/development costs of their self-driving AI how much is that saving them really? Is it going to be enough to defray the billion and a half dollars they're bleeding every year? No, their long-term game was always going to be to undermine public transit and personal vehicle ownership through an artificially cheap business model and then once their monopoly (or oligopoly with Lyft) is firmly entrenched to boondoggle municipal governments into subsidizing rides for them instead of spending money on building out transit.
  • trhway 7y ago
    >Right now their business model relies on having their labor bring their own capital. That is really post-Marx. It is a new economy structure enabled by technological progress, and which couldn't have existed and hasn't been predicted until it was enabled by technology and was created by Uber and the likes. In marxism, ie. in classic capitalism the capital owner extracts added value which is created by the labor applied to the capital. In the post-marxism economy the birth of which we're witnessing today Uber, by the owning of the information network, manages to extracts the added value which labor creates by applying itself to the labor's own capital. Marxism economical theory naturally postulates socialism after capitalism with the socialism being the maximum entropy of capital ownership distribution, and that is what we've observed in the last 100 years. These days with the rise of technology that got the post-Marx economy enabled the future driven by that economy isn't socialism, its the new fundamental state of society - the network.
    • naravara 7y ago
      This is economically illiterate gibberish.
• Ididntdothis 7y ago
  ”self-driving car fleet ” Uber has zero competence in fleet management. Everything they do is to avoid investing in a fleet.i would argue that rental car companies or car dealers are positioned much better.
  • bloomer 7y ago
    Weird that this is being downvoted because Uber has shown no interest in acquiring and managing assets (self-driving cars or even their own cars) which is a completely different business than being a marketer for independent taxis. If self-driving cars become a business it seems like rental car companies would be ideally positioned to take advantage of them.
    • Ididntdothis 7y ago
      Uber is the ultimate middleman company. It would only work if people bought their own self driving cars and rented them out to Uber to make some extra money.
      • ghaff 7y ago
        And it's difficult to see how those ad hoc rentals can compete with a fleet management company that has economies of scale and optimizes for short-term rental. Car depreciation is more mileage-based than time-based so it's reasonable to assume that the rates people would get would tend to reach a point where they were pretty close to the cost--with perhaps an exception for times when there's extraordinary demand.
        • RantyDave 7y ago
          Yes and no. I can certainly agree on a theoretical basis, but the black cabs that have crawled around London since the 50's are privately owned and built to last.
      • Avshalom 7y ago
        At which point of course owners would shop for top dollar and riders would shop for rock bottom and they'd still be stuck lighting money on fire to subsidize rides.
• 0zymandias 7y ago
  Uber is a huge mess because the narrative is not credible. Dara is trying to tell a story about fast grow + profitability. The reality is that they have three types of businesses. 1. Businesses that are slowing down dramatically, e.g. Ride Share. As they raise price it may have negative growth. 2. Businesses that are growing by unsustainable subsidy, e.g. Eats, Freight. 3. New business that are purely speculative. Uber Money, Autonomous, Flying Taxis. They have no businesses that fit the fast growth + profitability. Dara is trying to balance the three categories above to pretend that it is happening.
• dehrmann 7y ago
  This reads like the usual Uber criticism and doesn't touch on the lockup. The market knew the lockup was ending, so it should have been priced in. Dropping when the lockup ends should mean that markets underestimated how many insiders wanted to cash out, and employee sentiment is worse than market sentiment.
  • dragontamer 7y ago
    > Dropping when the lockup ends should mean that markets underestimated how many insiders wanted to cash out, and employee sentiment is worse than market sentiment. Uber's volume is 700% compared to last week. With volume-swings like that, there really isn't much you can do.
    • deleted 7y ago
      [deleted]
    • cik 7y ago
      Of course there is. You can short, it's pretty profitable.
      • dragontamer 7y ago
        You can only short if you can find someone willing to lend you shares. Shorts can "run out of shares to borrow" in practice. Similarly, you can buy put-options (or sell call options) on the shares, but only if you can find a counterparty to accept the "other side" (that is, a short-put or a long-call) of your bet. Run out of counterparties, and it becomes impossible to trade. Reality becomes evident at times like this when volume is way, way, way higher than anybody expects. -------- I admit that I don't know what happened today with Uber, but we can't just assume "invisible hand / market is always perfectly efficient". Reality simply doesn't work like that.
        • Domenic_S 7y ago
          I'm not sure what value your comment is adding - look at uber's option chain, there's plenty of volume everywhere: https://www.nasdaq.com/market-activity/stocks/uber/option-chain https://www.nasdaq.com/market-activity/stocks/uber/option-ch...
• paulcole 7y ago
  > We knew that their future was purely dependent on a self-driving car fleet This is by far Uber's best trick. Convincing people that there is an end game they can win. I see no way that self-driving saves them. Either they'll have to buy/lease/maintain a massive fleet of cars or they'll have to rent self-driving cars from the owners. Either way, in the near future, how much cheaper can it be than paying humans peanuts?
• tzs 7y ago
  > We knew that their future was purely dependent on a self-driving car fleet where they could ditch drivers (and their pay) completely. I've never really understood this. Their drivers do more than just drive, don't they? They also supply the cars, and deal with maintenance of those cars. If Uber switches to a self-driving fleet and ditches human drivers, who will own the cars? If Uber owns or leases the cars, Uber will have to be dealing with maintenance. I suppose they could go to a model where people who have bought self-driving cars can let Uber use them when the owner does not need them, but then Uber has just replaced paying a zillion drivers with paying a zillion self-driving car owners. So, assuming they go with the model where Uber is the one handling maintenance so they don't have to have a zillion pseudo-employees I don't see what would stop other companies from doing this better. If Waymo wanted to go for that market, for instance, they have better self-driving technology, and could probably get integrated with the Google Maps app that is already on everyone's phone so they wouldn't have to convince people to download anything. Sure, Waymo doesn't currently have, as far as I know, anything set up for managing and maintaining a large fleet of cars...but neither does Uber. Or what about the car makers? Many of them are working on self-driving, too. I could see some of them deploying self-driving taxi fleets, with maintenance handled through their dealers. This could become a new sales channel for them--new car to their taxi fleet for a couple years, then sold off as a used car which the buyer can be assured was well maintained and still has a good warranty. Imagine your self-driving Audi/BMW/Mercedes/etc taxi dropping you off at home at the end of the day, and then presenting you with a report showing how much you used the service over the last year, how much it cost you, and how it would have been cheaper for you to have your own private self-driving car, and offering to sell you that very car. If you accept, the car drives back to the dealer, gets cleaned, inspected, tuned up, and drives back to your place to be waiting for you to take ownership the next morning. In summary, owning and operating a fleet of self-driving taxis is sufficiently different from what Uber does now that I'm not sure that Uber has any particular advantage over anyone else who might want to do so, and might even be at a disadvantage, so I'm skeptical that this is their future.
  • Konnstann 7y ago
    The maintenance cost of 1000 cars owned by one company are most likely going to be less than those of 1000 cars owned by 1000 owners, just through negotiation and bulk maintenance pricing. Uber is banking on people not switching to whatever other self-driving service comes out, due to being a household name. I don't think very many people outside of SV know what Waymo even is, everyone has taken an Uber though.
• scarface74 7y ago
  No everyone on HN didn’t know that. Posters on HN are routinely making excuses for money losing tech companies and consider a “success” another rounding of funding at an increased valuation and being able to pawn off bad businesses to the public markets.
• smabie 7y ago
  I mean, if no one was surprised the stock price wouldn't have moved a lot when the lockup ended. Clearly most everyone was surprised (including you), otherwise you and everyone else would have shorted Uber or bought some puts before the lockup ended therefore neutralizing any price movement.