6 ms·

End of the Line for Uber

49 points by ColinWright 5y ago

dredmorbius 5y ago
Dupe: 7 days ago, 311 comments: https://news.ycombinator.com/item?id=28132830 https://news.ycombinator.com/item?id=28132830 Yesterday, 41 comments: https://news.ycombinator.com/item?id=28197691 https://news.ycombinator.com/item?id=28197691
- beckman466 5y ago
  Did you flag this thread? I find this idea so strange, that there can't be multiple conversations about the same topic on here. You do realize readership of online forums is global right? Some might have missed earlier threads or will miss this one. Your idea of 'dupe' fails because for whom it is a dupe depends on many factors, and all you're doing by flagging is stifling opportunities for organic conversations because they don't suit your browsing/reading habits. It's pretty frustrating. Please stop flagging and just scroll past next time, ok? It's ok if you don't wanna discuss this topic.
  - dredmorbius 5y ago
    See the site guidelines: Are reposts ok? If a story has not had significant attention in the last year or so, a small number of reposts is ok. Otherwise we bury reposts as duplicates. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html HN moderator dang has made clear that stories which are submitted but don't get traction can be resubmitted after a day or so. This particular item has seen ample discussion. https://news.ycombinator.com/item?id=8315602 https://news.ycombinator.com/item?id=8315602 HN has an excellent search functionality, through Algolia. If you're interested in a specific topic, you can look to see if it's been discussed, whether recently or in the deep mists of time. There's also the "front page" view which allows looking at the top stories of any given day, through history. I use this to catch up on top items from the recent past frequently: https://news.ycombinator.com/front https://news.ycombinator.com/front Traction and front-page status are a highly-variable lottery at best. This particular story's landed at least three times in the past week, though it's been repeats of the original item each time. I do try hard to encourage what I see as worthwhile and substantive discussions. This includes frequently submitting nominations for "second chance queue" stories. A few of those have spawned rich discussions.
poizan42 5y ago
Discussion from last week: https://news.ycombinator.com/item?id=28132830 https://news.ycombinator.com/item?id=28132830
siliconlotus 5y ago
Uber didn’t invent adjusted EBITDA fwiw… it’s a standard practice for businesses to present GAAP and non-GAAP (pro-forma) earnings that they believe better represent the business. Also, any investor can simply look at Uber’s regular SEC-filed statement of cash flows if they would like to get a clearer view of Uber’s cash flows without those accrual accounting nuances
- alex_young 5y ago
  Non-GAAP is an amusing idea. GAAP stands for Generally Accepted Accounting Practices right? Doesn’t this mean that non-GAAP is pretty shaky since it’s not accepted by the rest of the industry?
  - whall6 5y ago
    Non-GAAP is understood to be biased. It’s the company’s version of their financials. This is not the same version that is audited and required to be submitted on a quarterly basis.
tiahura 5y ago
Having done work for a few cab company owners, Uber never made sense. Many of these guys, the owners, probably make $75k in a great year - and Uber’s genius path to billions was to undercut them? Just image search “cab company owner” and see if you can find the billions.
- sokoloff 5y ago
  If a medallion owner can earn $75K per medallion per year, it seems there's a lot of possible value in trying to take $5-10K/year times the number of full-time medallion equivalents while avoiding the cost of buying the medallion and car [and maintaining the car] in the first place.
  - JohnJamesRambo 5y ago
    They are talking about the owner of the whole cab company making 75k.
    - prepend 5y ago
      No, I don’t think so. That’s earnings for a single medallion. Cab companies might own hundreds if not thousands of medallions. For example, a single private equity firm owns about 4,000 New York medallions [0]. Most medallions are owned in pools by private firms. [0] https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private-equity-firm-is-the-city-s-biggest-taxi-medallion-player https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private...
      - michaelt 5y ago
        Medallions sound like a truly bizarre and unfair system. And if Uber operated exclusively in New York, we could accept they had a profitable-sounding business model: bypassing that system. But given that Uber has expanded into many other cities and countries, 99% of which don't have medallions, it's pretty clear that merely bypassing the medallion system isn't their business model.
- 5y ago
gpt5 5y ago
This is not a thought Guo analysis but a one sided bashing of some of uber’s practices and negative effects. Uber is here to stay, and the voting on prop 22 has shown how much the population wants it to. Uber is also more than ride sharing and food delivery, with a successful logistics/trucking matching service.
CogitoCogito 5y ago
Given the numbers of this article, we should expect Uber to go bankrupt within the next two years or so. I'm fairly cynical and find it a reasonable prediction, but even if you don't agree with me, please play along. My question then is, when Uber goes bankrupt, what happens then? Would it spook the market? There are after all many other companies that have floated on investor capital. Would this sort of event be enough to cause a big market reckoning? Of course this is all the sort of speculation that's impossible to predict, but it's just something I've been thinking for a while. Uber failing would be a pretty big failure.
- laurent92 5y ago
  Grab is already leader in Asia, Uber is lacking in Indonesia. The difference? You have the choice between paying through the app or not (like a prepaid regular taxi). Uber designed its system to look as if drivers were employees, so they will die with the concept of HR fraud they created, but prepaid transport apps will remain.
  - azth 5y ago
    In some countries, you can pay Uber with cash.
- prepend 5y ago
  I’ve wondered this because I’ve “just not understood how they can lose money.” I suppose during bankruptcy someone can buy their matchmaking tech and IP and relaunch without all that debt and overhead. Seems like a good target for someone to just run and pump cash out of as there should be a way to make money out of “market rate” * 15% fee for matchmaking. I mean taxis were profitable and this is just a better taxi algorithm since the automate the multiple drivers sharing a cab process.
  - beckman466 5y ago
    > I suppose during bankruptcy someone can buy their matchmaking tech and IP and relaunch without all that debt and overhead. Seems like a good target for someone to just run and pump cash out of as there should be a way to make money out of “market rate” * 15% fee for matchmaking. I don't see that happening but do you have examples where that strategy has worked (in tech)?
KaiserPro 5y ago
I dislike uber, but given that they have meant to gone bankrupt a number of times already, I'm not keen to bet against them anytime soon. Yes, they should have disappeared in a normal world, but uber didn't because its backed by people with a fucktonne of cash, enough might to distort lots of things about it that should have really killed it years ago. But then again, in a normal world, Tesla's stock price should be 5% of what it is now, given how much money they loose on making cars. But we are where we are. I expect uber will thrash about for a number of years yet. However I suspect that if/when uber goes pop, it'll bring lots of tech stocks down with it.
- whall6 5y ago
  This is where I stand. Just because their current trajectory puts them in the ground, doesn’t necessarily mean that in 6 months they actually will fail. Considering every startup ever has had a runway (i.e. how many months until we fail), the fact that even some have survived should remove complete confidence that Uber _will_ fail.
mabbo 5y ago
While I quite like this post and agree with many of it's points, hasn't this been posted here 2+ times already? And made the front-page each time? We've had this discussion about this exact text already. Let's agree or disagree with it and move on. Time will tell if Doctorow is right or not, and we can all feel smug when we're proven right then.
- deleted 5y ago
  [deleted]
dionidium 5y ago
There's a kind of dance that happens in arguments about the post office where somebody points out that the USPS is actually profitable, absent its pension obligations, and then somebody else responds that, yeah, but they actually do have those pension obligations, so you can't erase them from the profitability calculation, but then somebody else argues that, sure, but the point is that it's not critical to the functioning of a mail delivery service that they have so many pension obligations and the point is that such a service could very well be profitable, so it's a little silly to say, "the USPS can't be profitable" when what you mean is that any organization similarly saddled with historical pension obligations couldn't be profitable. You're not really saying anything interesting about mail delivery, in other words. I feel like there's something similar happening here. It seems fairly clear that Uber's currently structured around burning a bunch of money, but...burning that money isn't critical to the functioning of a rideshare business. People are just kind of talking past one another on this, I think.
- brightball 5y ago
  There's a lot of major interests out there that have essentially been at war with Uber from day 1. The cab driver's unions in different cities primarily. All of these interests want nothing more than to see Uber fail and will amplify any projections like these. My simple question...if Yellow Cab can be profitable, what makes it so hard for Uber or Lyft to be profitable?
  - OldHand2018 5y ago
    Yellow Cab doesn't have to pay hundreds of millions of dollars in executive compensation, nor does it need to hire thousands of developers. Yellow Cab's annual expenses are probably less than 1 month of Uber's AWS bill.
thehappypm 5y ago
I find it fascinating that the gig economy makes sense. Business 101 is to find economies of scale. In the taxi business, cars are purchased in blocks, maintenance is centralized (and easy since the cars are all the same), gas prices are negotiated, insurance is negotiated. The gig economy pushes all those costs to the driver, who has to buy market rate gas, pay a high market rate for individual insurance, pay Joe the Scammer for repairs...
- lallysingh 5y ago
  Push all your business risk to the least sophisticated party. Simple.
- dredmorbius 5y ago
  There are a few variants of the gig economy concept. Most seem to be inherently flawed and oppressive. https://www.newyorker.com/culture/infinite-scroll/what-the-creator-economy-promises-and-what-it-actually-does https://www.newyorker.com/culture/infinite-scroll/what-the-c... (a current HN submission: https://news.ycombinator.com/item?id=28209323 https://news.ycombinator.com/item?id=28209323) Onlyfans average earnings: https://xsrus.com/the-economics-of-onlyfans https://xsrus.com/the-economics-of-onlyfans (discussion 9 days ago: https://news.ycombinator.com/item?id=28105011 https://news.ycombinator.com/item?id=28105011)
sergiotapia 5y ago
Why was this flagged?
- ColinWright 5y ago
  I expect because it was submitted and discussed a week ago: https://news.ycombinator.com/item?id=28209449 https://news.ycombinator.com/item?id=28209449 See that comment and replies to it for more information.

49 points by ColinWright 5y ago

Dupe: 7 days ago, 311 comments: https://news.ycombinator.com/item?id=28132830 https://news.ycombinator.com/item?id=28132830 Yesterday, 41 comments: https://news.ycombinator.com/item?id=28197691 https://news.ycombinator.com/item?id=28197691

beckman466 5y ago
Did you flag this thread? I find this idea so strange, that there can't be multiple conversations about the same topic on here. You do realize readership of online forums is global right? Some might have missed earlier threads or will miss this one. Your idea of 'dupe' fails because for whom it is a dupe depends on many factors, and all you're doing by flagging is stifling opportunities for organic conversations because they don't suit your browsing/reading habits. It's pretty frustrating. Please stop flagging and just scroll past next time, ok? It's ok if you don't wanna discuss this topic.
- dredmorbius 5y ago
  See the site guidelines: Are reposts ok? If a story has not had significant attention in the last year or so, a small number of reposts is ok. Otherwise we bury reposts as duplicates. https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html HN moderator dang has made clear that stories which are submitted but don't get traction can be resubmitted after a day or so. This particular item has seen ample discussion. https://news.ycombinator.com/item?id=8315602 https://news.ycombinator.com/item?id=8315602 HN has an excellent search functionality, through Algolia. If you're interested in a specific topic, you can look to see if it's been discussed, whether recently or in the deep mists of time. There's also the "front page" view which allows looking at the top stories of any given day, through history. I use this to catch up on top items from the recent past frequently: https://news.ycombinator.com/front https://news.ycombinator.com/front Traction and front-page status are a highly-variable lottery at best. This particular story's landed at least three times in the past week, though it's been repeats of the original item each time. I do try hard to encourage what I see as worthwhile and substantive discussions. This includes frequently submitting nominations for "second chance queue" stories. A few of those have spawned rich discussions.

poizan42 5y ago

Discussion from last week: https://news.ycombinator.com/item?id=28132830 https://news.ycombinator.com/item?id=28132830

siliconlotus 5y ago

Uber didn’t invent adjusted EBITDA fwiw… it’s a standard practice for businesses to present GAAP and non-GAAP (pro-forma) earnings that they believe better represent the business. Also, any investor can simply look at Uber’s regular SEC-filed statement of cash flows if they would like to get a clearer view of Uber’s cash flows without those accrual accounting nuances

alex_young 5y ago
Non-GAAP is an amusing idea. GAAP stands for Generally Accepted Accounting Practices right? Doesn’t this mean that non-GAAP is pretty shaky since it’s not accepted by the rest of the industry?
- whall6 5y ago
  Non-GAAP is understood to be biased. It’s the company’s version of their financials. This is not the same version that is audited and required to be submitted on a quarterly basis.

tiahura 5y ago

Having done work for a few cab company owners, Uber never made sense. Many of these guys, the owners, probably make $75k in a great year - and Uber’s genius path to billions was to undercut them? Just image search “cab company owner” and see if you can find the billions.

sokoloff 5y ago
If a medallion owner can earn $75K per medallion per year, it seems there's a lot of possible value in trying to take $5-10K/year times the number of full-time medallion equivalents while avoiding the cost of buying the medallion and car [and maintaining the car] in the first place.
- JohnJamesRambo 5y ago
  They are talking about the owner of the whole cab company making 75k.
  - prepend 5y ago
    No, I don’t think so. That’s earnings for a single medallion. Cab companies might own hundreds if not thousands of medallions. For example, a single private equity firm owns about 4,000 New York medallions [0]. Most medallions are owned in pools by private firms. [0] https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private-equity-firm-is-the-city-s-biggest-taxi-medallion-player https://www.ny1.com/nyc/all-boroughs/news/2021/04/01/private...
    - michaelt 5y ago
      Medallions sound like a truly bizarre and unfair system. And if Uber operated exclusively in New York, we could accept they had a profitable-sounding business model: bypassing that system. But given that Uber has expanded into many other cities and countries, 99% of which don't have medallions, it's pretty clear that merely bypassing the medallion system isn't their business model.
5y ago

gpt5 5y ago

This is not a thought Guo analysis but a one sided bashing of some of uber’s practices and negative effects. Uber is here to stay, and the voting on prop 22 has shown how much the population wants it to. Uber is also more than ride sharing and food delivery, with a successful logistics/trucking matching service.

CogitoCogito 5y ago

Given the numbers of this article, we should expect Uber to go bankrupt within the next two years or so. I'm fairly cynical and find it a reasonable prediction, but even if you don't agree with me, please play along. My question then is, when Uber goes bankrupt, what happens then? Would it spook the market? There are after all many other companies that have floated on investor capital. Would this sort of event be enough to cause a big market reckoning? Of course this is all the sort of speculation that's impossible to predict, but it's just something I've been thinking for a while. Uber failing would be a pretty big failure.

laurent92 5y ago
Grab is already leader in Asia, Uber is lacking in Indonesia. The difference? You have the choice between paying through the app or not (like a prepaid regular taxi). Uber designed its system to look as if drivers were employees, so they will die with the concept of HR fraud they created, but prepaid transport apps will remain.
- azth 5y ago
  In some countries, you can pay Uber with cash.
prepend 5y ago
I’ve wondered this because I’ve “just not understood how they can lose money.” I suppose during bankruptcy someone can buy their matchmaking tech and IP and relaunch without all that debt and overhead. Seems like a good target for someone to just run and pump cash out of as there should be a way to make money out of “market rate” * 15% fee for matchmaking. I mean taxis were profitable and this is just a better taxi algorithm since the automate the multiple drivers sharing a cab process.
- beckman466 5y ago
  > I suppose during bankruptcy someone can buy their matchmaking tech and IP and relaunch without all that debt and overhead. Seems like a good target for someone to just run and pump cash out of as there should be a way to make money out of “market rate” * 15% fee for matchmaking. I don't see that happening but do you have examples where that strategy has worked (in tech)?

KaiserPro 5y ago

I dislike uber, but given that they have meant to gone bankrupt a number of times already, I'm not keen to bet against them anytime soon. Yes, they should have disappeared in a normal world, but uber didn't because its backed by people with a fucktonne of cash, enough might to distort lots of things about it that should have really killed it years ago. But then again, in a normal world, Tesla's stock price should be 5% of what it is now, given how much money they loose on making cars. But we are where we are. I expect uber will thrash about for a number of years yet. However I suspect that if/when uber goes pop, it'll bring lots of tech stocks down with it.

whall6 5y ago
This is where I stand. Just because their current trajectory puts them in the ground, doesn’t necessarily mean that in 6 months they actually will fail. Considering every startup ever has had a runway (i.e. how many months until we fail), the fact that even some have survived should remove complete confidence that Uber _will_ fail.

mabbo 5y ago

While I quite like this post and agree with many of it's points, hasn't this been posted here 2+ times already? And made the front-page each time? We've had this discussion about this exact text already. Let's agree or disagree with it and move on. Time will tell if Doctorow is right or not, and we can all feel smug when we're proven right then.

deleted 5y ago
[deleted]

dionidium 5y ago

There's a kind of dance that happens in arguments about the post office where somebody points out that the USPS is actually profitable, absent its pension obligations, and then somebody else responds that, yeah, but they actually do have those pension obligations, so you can't erase them from the profitability calculation, but then somebody else argues that, sure, but the point is that it's not critical to the functioning of a mail delivery service that they have so many pension obligations and the point is that such a service could very well be profitable, so it's a little silly to say, "the USPS can't be profitable" when what you mean is that any organization similarly saddled with historical pension obligations couldn't be profitable. You're not really saying anything interesting about mail delivery, in other words. I feel like there's something similar happening here. It seems fairly clear that Uber's currently structured around burning a bunch of money, but...burning that money isn't critical to the functioning of a rideshare business. People are just kind of talking past one another on this, I think.

brightball 5y ago
There's a lot of major interests out there that have essentially been at war with Uber from day 1. The cab driver's unions in different cities primarily. All of these interests want nothing more than to see Uber fail and will amplify any projections like these. My simple question...if Yellow Cab can be profitable, what makes it so hard for Uber or Lyft to be profitable?
- OldHand2018 5y ago
  Yellow Cab doesn't have to pay hundreds of millions of dollars in executive compensation, nor does it need to hire thousands of developers. Yellow Cab's annual expenses are probably less than 1 month of Uber's AWS bill.

thehappypm 5y ago

I find it fascinating that the gig economy makes sense. Business 101 is to find economies of scale. In the taxi business, cars are purchased in blocks, maintenance is centralized (and easy since the cars are all the same), gas prices are negotiated, insurance is negotiated. The gig economy pushes all those costs to the driver, who has to buy market rate gas, pay a high market rate for individual insurance, pay Joe the Scammer for repairs...

lallysingh 5y ago
Push all your business risk to the least sophisticated party. Simple.
dredmorbius 5y ago
There are a few variants of the gig economy concept. Most seem to be inherently flawed and oppressive. https://www.newyorker.com/culture/infinite-scroll/what-the-creator-economy-promises-and-what-it-actually-does https://www.newyorker.com/culture/infinite-scroll/what-the-c... (a current HN submission: https://news.ycombinator.com/item?id=28209323 https://news.ycombinator.com/item?id=28209323) Onlyfans average earnings: https://xsrus.com/the-economics-of-onlyfans https://xsrus.com/the-economics-of-onlyfans (discussion 9 days ago: https://news.ycombinator.com/item?id=28105011 https://news.ycombinator.com/item?id=28105011)

sergiotapia 5y ago

Why was this flagged?

ColinWright 5y ago
I expect because it was submitted and discussed a week ago: https://news.ycombinator.com/item?id=28209449 https://news.ycombinator.com/item?id=28209449 See that comment and replies to it for more information.