12 ms·

Uber Explanation, since this is being downvoted. Uber might not have lied about their business, but it surely looks like investors never cared about the busin

Uber Explanation, since this is being downvoted. Uber might not have lied about their business, but it surely looks like investors never cared about the businesses viability and rather only cared about being able to turn a profit on their investment (which was the point being made by the gp). To this day, it is still not clear if Uber’s business model is viable. Also not to mention the original CEO/founder’s reputation and attitude, which the investors also didn’t care about until it became too big of a scandal. Additionally, the investors didn’t even care that Uber was technically illegal (same as Airbnb btw). Some references: https://techcrunch.com/2021/02/12/will-ride-hailing-profits-ever-come/ https://techcrunch.com/2021/02/12/will-ride-hailing-profits-... https://www.marketwatch.com/story/uber-and-lyft-are-staging-a-ridiculous-race-for-fake-profits-11628205337 https://www.marketwatch.com/story/uber-and-lyft-are-staging-... https://www.businessinsider.com/uber-company-scandals-and-controversies-2017-11#january-2012-uber-gets-slammed-in-its-first-major-surge-pricing-backlash-2 https://www.businessinsider.com/uber-company-scandals-and-co...

eli 5y ago
A dishonest company in other ways too. They sent drivers and riders misleading information about any local attempts to regulate them in the slightest. When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.
Alex3917 5y ago
> which the investors also didn’t care about until it became too big of a scandal More like investors didn't care until they needed liquidity.
supperburg 5y ago
The idea that Uber is not profitable is a myth isn’t it? I remember they posted some financial documents a while back that showed them in the red. But when I looked at the papers there were literal billions in advertising and expansion. Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.
- ta1234567890 5y ago
  > The idea that Uber is not profitable is a myth isn’t it? No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company. Having a business model (which is what you are describing), doesn’t make it profitable. Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
- dogman144 5y ago
  Collecting enough money to pay staff/run servers != profitable. You're asking a cash flow vs. a income statement question. With enough cash flow, yes, can achieve any sort of operational expense that you're referring to. Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-fake-profit-1847716786 https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
- junon 5y ago
  > The idea that Uber is not profitable is a myth isn’t it? I worked on the long-term forecasting team while I was there. At least 5-6 years ago, Uber was very, very far from profitable. I can't imagine much has changed enough for it to make them profitable. Maybe with the new CEO things changed but I'm doubtful. That company had a slew of issues.
  - supperburg 5y ago
    Right, but would they be profitable if you took out the advertising and expansion costs? From the document I saw, yes. Can you please explain where are these enormous costs that are necessary to run the business? Is it SV salaries? Are their servers costing too much money? It doesn’t make sense. It’s like saying that the concept of dispatching taxis with a computer is not capable of being profitable. It simply isn’t true. It’s like people who said Amazon and Tesla were vapor ware because they were unprofitable. Everyone in the media and most people on HN couldn’t fathom the concept of subtracting R&D.
edot 5y ago
Agreed. EBITDA in general is hot garbage, but that is egregious.
codegeek 5y ago
"Uber might not have lied about their business" Yea that is what we discussing about Theranos. Theranos was an outright fraud. You cannot say the same about Uber whether they inflated or lied about their profits etc. Uber provides a real service and honestly a good one for people. Theranos on the other hand, played with people's lives by lying about their entire business model and product which never worked. Big difference.
- MrGando 5y ago
  I think you're somewhat making an argument that the "means" are justified if the end is noble. I think the whole discussion revolts around the several issues with that "system" or "philosophy" here in the Valley. I personally don't think it's the right way to do things. Big fraud, small lies (fraud), it's all pretty bad.
  - codegeek 5y ago
    To some extent, aren't startups supposed to be doing things to challenge the status quo which sometimes can mean that they are breaking rules ? Uber overall has been a net positive in my humble opinion so I definitely think that to an extent, the means are justified if the end is noble.
    - MrGando 5y ago
      If we're going to restraint to personal opinions, my strong personal opinion is that startups have to operate in the context of truth, rule of law and business ethics. That would be my hope. I think it's totally possible to succeed and still work through that lens. I think thinking otherwise, is actually a fallacy perpetuated by certain groups here in the Valley. I strongly believe that you can challenge the status quo and abide by honesty and rule of law.

eli 5y ago

A dishonest company in other ways too. They sent drivers and riders misleading information about any local attempts to regulate them in the slightest. When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.

Alex3917 5y ago

> which the investors also didn’t care about until it became too big of a scandal More like investors didn't care until they needed liquidity.

supperburg 5y ago

The idea that Uber is not profitable is a myth isn’t it? I remember they posted some financial documents a while back that showed them in the red. But when I looked at the papers there were literal billions in advertising and expansion. Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.

ta1234567890 5y ago
> The idea that Uber is not profitable is a myth isn’t it? No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company. Having a business model (which is what you are describing), doesn’t make it profitable. Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
dogman144 5y ago
Collecting enough money to pay staff/run servers != profitable. You're asking a cash flow vs. a income statement question. With enough cash flow, yes, can achieve any sort of operational expense that you're referring to. Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-fake-profit-1847716786 https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
junon 5y ago
> The idea that Uber is not profitable is a myth isn’t it? I worked on the long-term forecasting team while I was there. At least 5-6 years ago, Uber was very, very far from profitable. I can't imagine much has changed enough for it to make them profitable. Maybe with the new CEO things changed but I'm doubtful. That company had a slew of issues.
- supperburg 5y ago
  Right, but would they be profitable if you took out the advertising and expansion costs? From the document I saw, yes. Can you please explain where are these enormous costs that are necessary to run the business? Is it SV salaries? Are their servers costing too much money? It doesn’t make sense. It’s like saying that the concept of dispatching taxis with a computer is not capable of being profitable. It simply isn’t true. It’s like people who said Amazon and Tesla were vapor ware because they were unprofitable. Everyone in the media and most people on HN couldn’t fathom the concept of subtracting R&D.

edot 5y ago

Agreed. EBITDA in general is hot garbage, but that is egregious.

codegeek 5y ago

"Uber might not have lied about their business" Yea that is what we discussing about Theranos. Theranos was an outright fraud. You cannot say the same about Uber whether they inflated or lied about their profits etc. Uber provides a real service and honestly a good one for people. Theranos on the other hand, played with people's lives by lying about their entire business model and product which never worked. Big difference.

MrGando 5y ago
I think you're somewhat making an argument that the "means" are justified if the end is noble. I think the whole discussion revolts around the several issues with that "system" or "philosophy" here in the Valley. I personally don't think it's the right way to do things. Big fraud, small lies (fraud), it's all pretty bad.
- codegeek 5y ago
  To some extent, aren't startups supposed to be doing things to challenge the status quo which sometimes can mean that they are breaking rules ? Uber overall has been a net positive in my humble opinion so I definitely think that to an extent, the means are justified if the end is noble.
  - MrGando 5y ago
    If we're going to restraint to personal opinions, my strong personal opinion is that startups have to operate in the context of truth, rule of law and business ethics. That would be my hope. I think it's totally possible to succeed and still work through that lens. I think thinking otherwise, is actually a fallacy perpetuated by certain groups here in the Valley. I strongly believe that you can challenge the status quo and abide by honesty and rule of law.