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No one is driving around, other than Uber Eats and deliveries, there is nowhere for people to go. There's no one flying, so no airport traffic. There's no sport
by rswail 7y ago
No one is driving around, other than Uber Eats and deliveries, there is nowhere for people to go. There's no one flying, so no airport traffic. There's no sports events, there's no entertainment districts active.
If anything, Uber will save money by not operating. Their cashburn should be substantially lowered if they are not subsidizing rides.
- komali2 7y agoMaybe on San Francisco. Houston for example is opening right back up, grandma's health be damned. Traffic is heavy on i45 again. All those people are driving somewhere.
- tinyhouse 7y agoWell, that's true for where you live right now, which I assume it's the US. Many places around the world start reopening. US is probably 1-2 months behind, at least some states like NY and MA. But obv things won't go back to normal immediately.
- karthikb 7y agoThis is older analysis [1] but Uber is profitable on each ride in their biggest markets until you deduct the OPEX of the main co. The burn of sales, marketing, engineering, support, their rider safety team, the driver inspection and on boarding centers, leases, etc all continue on with or without riders. [1] https://benjamintseng.com/2019/04/lyft-vs-uber-a-tale-of-two-s-1s/ https://benjamintseng.com/2019/04/lyft-vs-uber-a-tale-of-two...
- jbn 7y agoisn't it the case that they could decrease their burn rate by downsizing sales, marketing, etc.. ? At the same time, this time presents a unique opportunity for their engineering: how often does the market give you several months to breathe? Isn't this the time to polish the product, to finally fix all that tech debt you accumulated?
- karthikb 7y agoYes. That’s why they’re laying people off, and why Uber stock is up in after hours trading. Because of these layoffs, their margins have actually improved. Doesn’t make things any better for the people who find themselves without a job, though.
- alexeichemenda 7y agoThere is a misconception that Uber loses money on every ride. If you look at their SEC filing, it's not how they actually work (I won't have time to do that search for you now but will try to edit my post later). TL;DR of their SEC filings: They're not losing money on every ride, they just have such a high baseline of fixed costs (payroll being one) that they haven't started being profitable. Doing fewer rides right now is actually killing their profitability.
- xfitm3 7y agoTraffic is heavy in my area.