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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 lo

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.
  - hef19898 5y ago
    Excluding an integral part of the costs to say they are profitable is like saying you are cash flow positive, after including external funding. There is a reason why companies are running their books the way they are. Very good and valid ones!
    - supperburg 5y ago
      I don’t know if that’s a technical accounting term but “integral” is the key word there. Massive expansion is not integral to the normal operations of a business. R&D and literal billion dollar ad campaigns are tools to expand and grow into whatever space is open from lack of competition. Amazon filled their space, Tesla theirs and one of the computerized taxi companies will fill that space. Until they do, they will spend money on expansion. So that’s the key. It’s a temporary state. “Integral” is a completely incorrect term for the cost of that growth. The viability of a business is based on how much it costs them to actually carry out their core business. And maybe Uber has already gotten as big as they will get. It doesn’t change the fact that they don’t need one billion dollars in advertising. And also, what you are asserting is that it’s impossible for a computerized taxi company to exist. So do you think it would be cheaper to have a human dispatcher? Obviously you can run a profitable taxi company. It’s been a thing for a long time and the computers aren’t making it any worse or more expensive I can assure you.
      - 5y ago
KptMarchewa 5y ago
They hide tons of opex as "marketing".
- supperburg 5y ago
  There it is! The one person who actually answers my question!

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.
- hef19898 5y ago
  Excluding an integral part of the costs to say they are profitable is like saying you are cash flow positive, after including external funding. There is a reason why companies are running their books the way they are. Very good and valid ones!
  - supperburg 5y ago
    I don’t know if that’s a technical accounting term but “integral” is the key word there. Massive expansion is not integral to the normal operations of a business. R&D and literal billion dollar ad campaigns are tools to expand and grow into whatever space is open from lack of competition. Amazon filled their space, Tesla theirs and one of the computerized taxi companies will fill that space. Until they do, they will spend money on expansion. So that’s the key. It’s a temporary state. “Integral” is a completely incorrect term for the cost of that growth. The viability of a business is based on how much it costs them to actually carry out their core business. And maybe Uber has already gotten as big as they will get. It doesn’t change the fact that they don’t need one billion dollars in advertising. And also, what you are asserting is that it’s impossible for a computerized taxi company to exist. So do you think it would be cheaper to have a human dispatcher? Obviously you can run a profitable taxi company. It’s been a thing for a long time and the computers aren’t making it any worse or more expensive I can assure you.
    - 5y ago

KptMarchewa 5y ago

They hide tons of opex as "marketing".

supperburg 5y ago
There it is! The one person who actually answers my question!