12 ms·

I just do not understand how ridesharing cannot turn a profit. Let's look at unit economics: ~25% take rate on a ride ($15 average): $3.75 take Payment proces

I just do not understand how ridesharing cannot turn a profit. Let's look at unit economics: ~25% take rate on a ride ($15 average): $3.75 take Payment processing: 2.5% + 30c = $0.68 Servers / datacenters: $0.20 (for a margin-sensitive business, you should be colo'ing your own servers, or using cheap alternatives like OVH/Hertzner) Customer support: Automate as much as possible (auto refunds up to a certain point; for lost items, connect directly to driver); assume 1 in 50 rides require manual human support with a $3 cost = $0.06 support cost per ride Fraud/refunds: Assume a 2% fraud rate that cannot be reclaimed; thus $0.30 cost for fraud. Refunds for things like driver purposefully took a longer route can be clawed from the driver. Gross COGS: $1.24 Gross profit: $2.51 What am I missing?? Marketing? Fuck marketing when you can't turn a profit. Everyone knows about Uber or Lyft already, you need to turn a profit, not waste $30 per CAC.

seydor 4y ago
But then Uber wouldn't be a Tech Company, they would be another lowly profitable company.
tonyhb 4y ago
Uber's take can average ~45% depending on the day: https://missionlocal.org/2021/07/as-rideshare-prices-skyrocket-uber-and-lyft-take-a-bigger-bite-of-the-pie/ https://missionlocal.org/2021/07/as-rideshare-prices-skyrock... I agree and am not quite sure where it's going (other than software).
- throwoutway 4y ago
  They have nearly 30,000 employees, mostly SDEs from what I understand. Its been discussed (and rationalized) here, but I still don't understand how that many are necessary. I read somewhere else that their engineering tend to need to rewrite their software every two years to keep up with the scale, so maybe they need them? it still seems insane to me. Lyft only has 4500 employees
  - ProjectBarks 4y ago
    Uber has 3500 ish engineers. Then a huge amount of operations personal. Best source I could find: https://www.themuse.com/profiles/uber/team/engineering https://www.themuse.com/profiles/uber/team/engineering
    - mathgladiator 4y ago
      This blows my mind. I used to use Uber a bunch, and I built relationships with drivers such that I could just text them and get a ride at a certain time for a discount. Ultimately, I wonder if Uber is prime to be disrupted if drivers got together and funded a few engineers to build a city-scale service for the hailing and payment aspect.
      - nobody9999 4y ago
        >Ultimately, I wonder if Uber is prime to be disrupted if drivers got together and funded a few engineers to build a city-scale service for the hailing and payment aspect. Apparently a whole bunch of folks are trying to do just that. I was going to provide just one example, but a web search[0] shows a whole bunch of these efforts in a variety of locales. As such, I just provided the web search results here. [0] https://html.duckduckgo.com/html?q=ride%20share%20cooperatives https://html.duckduckgo.com/html?q=ride%20share%20cooperativ...
        noirbot 4y ago
        Austin had that for a while when they went and banned Uber/Lyft. They were... ok? The issue ends up being that it's hard to be a one-city service that's mostly used by people who don't live in the city. If I arrive in a random city, the last thing I want to do to get to where I need to go is have to search for which app I need to install and give my CC info to in order to get a cab. NYC used to have Juno, but it went bankrupt in 2019. I feel like if you can't run a single-city rideshare app in NYC, you're gonna have a hard time doing it anywhere else.
        4y ago
rzz3 4y ago
You’re missing the cost of engineering, for one thing. Also “host Uber at OVH” isn’t remotely realistic.
- HappyTypist 4y ago
  Okay, OVH is not realistic, but at Uber scale, you can certainly roll your own data-centres and get costs lower than, or similar to OVH, even when including the cost of sysadmin and maintenance. Yes, it means you won't get all the shiny quality of life services offered by cloud providers, but you're in a _margin sensitive business_. Deal with it. Optimize every cost. Also, you don't need expensive engineers re-inventing the most basic things (I know Uber had a huge not-invented-here syndrome). Use the boring tools for the job. Only reinvent what is necessary. You don't need engineers practicing resume-driven-development.
  - bthrn 4y ago
    Uber does use its own data centers.
- onlyrealcuzzo 4y ago
  For a simplified version of the app with arguably no worse user experience, it's not THAT farfetched. Uber has an absurd amount of logging & analytics. If the app was simply drop a pin, get a ride - it wouldn't be that crazy. Uber has 3.9M drivers world wide. There's probably very rarely more than 1M drivers active at any time. Probably less than 300k people looking for a ride at the vast majority of times. Assuming you can update the driver's location 1 time per minute - that's ~1.5B requests per day - less than 25k requests per second (including user bookings). That's like ~2TB of bandwidth per day. That's less than $200 per day. Almost everyone spends more than 5% of their cloud bill on bandwidth. Meaning, the rest of a drastically simplified (but nearly equally useful) Uber could run for ~$4000 per day in server expenses. That's a $1.4M / year data center. Uber has revenues of >$11B. They could be making a lot of money. They just aren't because they're spending AT LEAST 50x more on servers and product engineering than they NEED to. They paid for growth for a long time. They have a monopoly now. There's not a lot of growth left to get. At some point the axe will come down. Lyft is even worse. They're ~1/3rd the size.
rockarage 4y ago
It can turn a profit, but not the sort of profit the investors and top stake holders want i.e. Microsoft and Google type margins and profit.
paulcole 4y ago
> What am I missing? Don’t forget about lawyers, compliance, lobbying, lawsuits, etc., etc. It’s also likely your assumptions are very wrong. Just think about what will happen when people figure out you auto-refund everything below a certain point. > Fuck marketing Possibly the bravest thing ever said on HN.
- criddell 4y ago
  Uber has a compliance department?
  - tempest_ 4y ago
    Of course? How else would they know which laws in which locales are most profitable to skirt. I am sure AirBNB has one for the same reason.
dsr_ 4y ago
You're missing roughly 30,000 employees to run a service that, at steady state, probably needs about 30 software developers and a few hundred second or third level customer support folks, with first level being handled by outsourced local-language companies. And then there's Uber self-driving. Uber AI; Uber electric airplanes. Uber freight, Uber restaurant delivery, Uber grocery delivery, Uber this and Uber that. Oh, and Uber scooters.
- deeptote 4y ago
  - oldgregg 4y ago
    hope they disinfect between rentals
  - dang 4y ago
    Please don't do this here.
- polote 4y ago
  The Uber app alone would probably need much more than 30 developers, see here : https://news.ycombinator.com/item?id=25376346 https://news.ycombinator.com/item?id=25376346
  - michaelt 4y ago
    A lot of that is optional complexity, though. Uber eats? Scooter integration? Mass transit support? Scheduled rides? Commuter cards? If you were building the app with 30 developers you'd simply not bother with those features.
    - shukantpal 4y ago
      Why are you ignoring the regional differences & the other stuff listed above those points in that post?
boatsie 4y ago
You’re missing very large categories like G&A, R&D etc but just look at their most recent SEC 10K or 10Q filings and you can see where the money goes.
- hyperhopper 4y ago
  I don't think he's missing that. Why does an app to connect drivers to passengers that's been around for a decade need R&D? Now this is not about self driving or whatever else, it's about a ride hailing app. The point is there is no reason ride hailing can't be profitable. Now, using any company to prop up r&d and investor hype for a moonshot, that's a whole other idea...
tyingq 4y ago
From Uber's Q2/2022 report: Revenue 6854 Cost of Revenue 4026 Operations and Support 574 Sales and Marketing 1263 Research and Development 587 General and Administrative 632 Depreciation & Amortization 254 Total Costs 7336
- fishtoaster 4y ago
  I wonder (and am too lazy too try to find out) what portion of sales and marketing is driver-focused. One could maybe argue (as the grandparent did) that they should be spending less on rider marketing, but marketing to get drivers in the door seems pretty important. Dunno what their driver churn rate is, but keeping the pool of drivers large is critical for their service.
  - frankfrankfrank 4y ago
    From what I’ve come to understand you are right on the money. All these “sharing economy” models rely heavily on churn and burn like many other less than solid business models like MLM. I would love to see the breakdown of drivers and their immigration status, because from what I can gather, what is happening here is not any different than in the past of America’s history where the whole business model relies on the exploitation of “immigrant” labor that knows no better and is easily exploited, aka their unrealized labor value is converted into profit, or better states, benefits and riches for the executives.
    - bushbaba 4y ago
      I wouldn’t assume immigrants “knows no better”. More likely if they don’t have a better opportunity available. Especially if they are not on a visa.
  - jelling 4y ago
    Bingo. Andrew Chen, formerly of Uber, says exactly that in his excellent new book The Cold Start problem. The driver side is the hard side of the market and must be constantly tended.
thraway3837 4y ago
- christophilus 4y ago
  I’ve been in the industry for 20 years. Colo or even running your own datacenters. Makes sense at their size.
- dang 4y ago
  Please don't cross into personal attack in comments. Making substantive points without swipes is essential to the kind of forum we're hoping to have here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- astrange 4y ago
  Uber doesn’t make money. The bigger their enterprise is the less money they make. They should be firing anyone who says they need more complicated systems to scale when the idea could run on a PC under their desk.
hackernewds 4y ago
driver cost is a lot more than $3.75. you think really drivers are working for 75% of a $10 ride per active hour? they're publicly measured to make 4x that
- hyperhopper 4y ago
  He said Uber is taking 3.75. that means the driver is getting 11.25. You flipped the values. The driver is making a bunch, and that's per ride, not per hour
rdxm 4y ago
Barrin92 4y ago
>What am I missing?? Competition. Part of Uber's biggest expenses is "driver and customer incentives" which is corporate speak for bribing people to stay on the app. We know from economics that competition drives down profits and rid hailing services are a dime a dozen.
robbiemitchell 4y ago
Legal, finance, HR, R&D, facilities, comms, support, endless vendors for all of the above… And no, you can’t just automate support. Refunds are not the only issue.
uh_actually 4y ago
You're missing insurance costs, which dwarf payment processing, fraud, and support.
oneoff786 4y ago
Are these numbers made up? Everyone is pointing out the indirect costs but I suspect that’s only a piece of it. A big chunk of that $15 goes to driver incentive promotions. Not the steady state cost, but the sign bonuses and what not. Given high driver churn, this is always a big line item. Google first result says just 3% of drivers drive for them for more than a year.
eden-alpha 4y ago
Insurance?
bushbaba 4y ago
Colo of servers might not be cheaper. Either way the server cost should and could be minimal per ride.
thawaya3113 4y ago
The 25% take is likely only in their best markets. Most of their markets are terrible markets.
briandear 4y ago
> Marketing? Fuck Marketing Do you have an MBA or other similar business experience? Because you can’t “fuck marketing.” Without marketing you have no business. How are people going to find out about your product?
- jitix 4y ago
  Exactly! As a SWE pursuing MBA, I was surprised to learn how critical marketing is to the existence of a business, and that it's way more logical, quantitative and data driven than people realize. You can write a hugely popular app with great UX, and super scalable backend but if you don't align your marketing parameters you won't make ends meet.
  - DeathArrow 4y ago
    >Exactly! As a SWE pursuing MBA, I was surprised to learn how critical marketing is to the existence of a business And you are wondering that people who are in business to teach you something tell you how vital is what they are teaching you? All salesmen sell things that are vital for your success, health, well being if you trust what they are telling.
- DeathArrow 4y ago
  How did people find out about Google, YouTube, Facebook, Whatsapp, Waze, Instagram, when they have started? I think it was because they provided an unique service and word of mouth was enough. I remember when Gmail was in beta. There was no marketing. I was fortunate to receive an invite and once I get 5 invites, friends were begging me to send them one.
quickthrower2 4y ago
Marketing. At first people needed to know about Uber. Then they needed to trust Uber. But now they need to carry on using Uber instead of the competitors. I think if the tech investment bubble bursts (if it is a bubble) then this makes it easier for Uber in terms of competition as ride prices will tend towards the original "Taxi" prices and people will have to get used to that. And then Uber can make their profit (and also the drivers can make a reasonable living).
- DeathArrow 4y ago
  In my country Uber is more expensive than taxis. Sometimes much more expensive during rush hours or busy days or holidays. A lady I know payd 10x the price for a taxi ride because it was new Years Eve.
obblekk 4y ago
You've missed the following: Take rate ~40% = $6 - payments -0.7 (correct) - servers -0.2 (correct) - refunds -1 (driver is indemnified, not in cabs) - shared rides -1 (on avg, not in cabs) - insurance -1 (drivers and riders get generous insurance, not in cabs) now we have $2.5 per ride to pay fixed costs, not including marketing. in reality, they also give out generous marketing coupons to riders which cabs did not do. $1 per ride on avg discount drops us to $1.5 per ride. it's probably true that 100 engineers could sustain uber in the US without any new features. 100 * 500k payroll cost = $50M/yr = 33M rides per year. Lyft alone did >300M rides per year. Uber and lyft combined would be a solid company able to sustain and be profitable. This company would provide a way higher quality service (and safer, and more insured) than it replaced, without monopoly profits being captured by rich medallion holding families. However, uber and lyft are still pouring money into product development. Shared rides as an example, still hold the potential to improve everything in cities massively. Lower cost than taxi, faster than bus, less congesting than private car. Both also seem to be expanding outside of ride share, which should be viewed like amazon expanding to aws 15 years ago. if it works, there could be hugely positive impact. if it doesn't, then it's a massive waste of shareholder capital. ¯\_(ツ)_/¯
- arrosenberg 4y ago
  > without monopoly profits being captured by rich medallion holding families. Then we'd have a(n) (inter)national tech monopoly. Soooo much better.
StillBored 4y ago
The uber/swift rewrite thread from a couple years ago is highly informative of the company "engineering" culture. The kinds of decisions taken for granted by the hacker news thread/etc are the kinds of decisions that could sink a self funded company, starting with the fact that they are basically writing multiple copies of the application for each platform (ios vs android) and going from there. This is maybe the problem with VC funded companies (like government contracts) the money just keeps flowing independent of all the bad decisions being made. Also, having enough engineers that whole teams can be split off to rewrite the application for no appreciable benefit except to peoples resume's is itself an upper mgmt problem. If the goal was a single unified application I might see how something like that could be justified, but they choose technology stacks that are to native for that to work.
- puranjay 4y ago
  What happens when VC money stops flowing in? Do all these unprofitable companies collapse?

seydor 4y ago

But then Uber wouldn't be a Tech Company, they would be another lowly profitable company.

tonyhb 4y ago

Uber's take can average ~45% depending on the day: https://missionlocal.org/2021/07/as-rideshare-prices-skyrocket-uber-and-lyft-take-a-bigger-bite-of-the-pie/ https://missionlocal.org/2021/07/as-rideshare-prices-skyrock... I agree and am not quite sure where it's going (other than software).

throwoutway 4y ago
They have nearly 30,000 employees, mostly SDEs from what I understand. Its been discussed (and rationalized) here, but I still don't understand how that many are necessary. I read somewhere else that their engineering tend to need to rewrite their software every two years to keep up with the scale, so maybe they need them? it still seems insane to me. Lyft only has 4500 employees
- ProjectBarks 4y ago
  Uber has 3500 ish engineers. Then a huge amount of operations personal. Best source I could find: https://www.themuse.com/profiles/uber/team/engineering https://www.themuse.com/profiles/uber/team/engineering
  - mathgladiator 4y ago
    This blows my mind. I used to use Uber a bunch, and I built relationships with drivers such that I could just text them and get a ride at a certain time for a discount. Ultimately, I wonder if Uber is prime to be disrupted if drivers got together and funded a few engineers to build a city-scale service for the hailing and payment aspect.
    - nobody9999 4y ago
      >Ultimately, I wonder if Uber is prime to be disrupted if drivers got together and funded a few engineers to build a city-scale service for the hailing and payment aspect. Apparently a whole bunch of folks are trying to do just that. I was going to provide just one example, but a web search[0] shows a whole bunch of these efforts in a variety of locales. As such, I just provided the web search results here. [0] https://html.duckduckgo.com/html?q=ride%20share%20cooperatives https://html.duckduckgo.com/html?q=ride%20share%20cooperativ...
      - noirbot 4y ago
        Austin had that for a while when they went and banned Uber/Lyft. They were... ok? The issue ends up being that it's hard to be a one-city service that's mostly used by people who don't live in the city. If I arrive in a random city, the last thing I want to do to get to where I need to go is have to search for which app I need to install and give my CC info to in order to get a cab. NYC used to have Juno, but it went bankrupt in 2019. I feel like if you can't run a single-city rideshare app in NYC, you're gonna have a hard time doing it anywhere else.
        4y ago

rzz3 4y ago

You’re missing the cost of engineering, for one thing. Also “host Uber at OVH” isn’t remotely realistic.

HappyTypist 4y ago
Okay, OVH is not realistic, but at Uber scale, you can certainly roll your own data-centres and get costs lower than, or similar to OVH, even when including the cost of sysadmin and maintenance. Yes, it means you won't get all the shiny quality of life services offered by cloud providers, but you're in a _margin sensitive business_. Deal with it. Optimize every cost. Also, you don't need expensive engineers re-inventing the most basic things (I know Uber had a huge not-invented-here syndrome). Use the boring tools for the job. Only reinvent what is necessary. You don't need engineers practicing resume-driven-development.
- bthrn 4y ago
  Uber does use its own data centers.
onlyrealcuzzo 4y ago
For a simplified version of the app with arguably no worse user experience, it's not THAT farfetched. Uber has an absurd amount of logging & analytics. If the app was simply drop a pin, get a ride - it wouldn't be that crazy. Uber has 3.9M drivers world wide. There's probably very rarely more than 1M drivers active at any time. Probably less than 300k people looking for a ride at the vast majority of times. Assuming you can update the driver's location 1 time per minute - that's ~1.5B requests per day - less than 25k requests per second (including user bookings). That's like ~2TB of bandwidth per day. That's less than $200 per day. Almost everyone spends more than 5% of their cloud bill on bandwidth. Meaning, the rest of a drastically simplified (but nearly equally useful) Uber could run for ~$4000 per day in server expenses. That's a $1.4M / year data center. Uber has revenues of >$11B. They could be making a lot of money. They just aren't because they're spending AT LEAST 50x more on servers and product engineering than they NEED to. They paid for growth for a long time. They have a monopoly now. There's not a lot of growth left to get. At some point the axe will come down. Lyft is even worse. They're ~1/3rd the size.

rockarage 4y ago

It can turn a profit, but not the sort of profit the investors and top stake holders want i.e. Microsoft and Google type margins and profit.

paulcole 4y ago

> What am I missing? Don’t forget about lawyers, compliance, lobbying, lawsuits, etc., etc. It’s also likely your assumptions are very wrong. Just think about what will happen when people figure out you auto-refund everything below a certain point. > Fuck marketing Possibly the bravest thing ever said on HN.

criddell 4y ago
Uber has a compliance department?
- tempest_ 4y ago
  Of course? How else would they know which laws in which locales are most profitable to skirt. I am sure AirBNB has one for the same reason.

dsr_ 4y ago

You're missing roughly 30,000 employees to run a service that, at steady state, probably needs about 30 software developers and a few hundred second or third level customer support folks, with first level being handled by outsourced local-language companies. And then there's Uber self-driving. Uber AI; Uber electric airplanes. Uber freight, Uber restaurant delivery, Uber grocery delivery, Uber this and Uber that. Oh, and Uber scooters.

deeptote 4y ago
- oldgregg 4y ago
  hope they disinfect between rentals
- dang 4y ago
  Please don't do this here.
polote 4y ago
The Uber app alone would probably need much more than 30 developers, see here : https://news.ycombinator.com/item?id=25376346 https://news.ycombinator.com/item?id=25376346
- michaelt 4y ago
  A lot of that is optional complexity, though. Uber eats? Scooter integration? Mass transit support? Scheduled rides? Commuter cards? If you were building the app with 30 developers you'd simply not bother with those features.
  - shukantpal 4y ago
    Why are you ignoring the regional differences & the other stuff listed above those points in that post?

boatsie 4y ago

You’re missing very large categories like G&A, R&D etc but just look at their most recent SEC 10K or 10Q filings and you can see where the money goes.

hyperhopper 4y ago
I don't think he's missing that. Why does an app to connect drivers to passengers that's been around for a decade need R&D? Now this is not about self driving or whatever else, it's about a ride hailing app. The point is there is no reason ride hailing can't be profitable. Now, using any company to prop up r&d and investor hype for a moonshot, that's a whole other idea...

tyingq 4y ago

From Uber's Q2/2022 report: Revenue 6854 Cost of Revenue 4026 Operations and Support 574 Sales and Marketing 1263 Research and Development 587 General and Administrative 632 Depreciation & Amortization 254 Total Costs 7336

fishtoaster 4y ago
I wonder (and am too lazy too try to find out) what portion of sales and marketing is driver-focused. One could maybe argue (as the grandparent did) that they should be spending less on rider marketing, but marketing to get drivers in the door seems pretty important. Dunno what their driver churn rate is, but keeping the pool of drivers large is critical for their service.
- frankfrankfrank 4y ago
  From what I’ve come to understand you are right on the money. All these “sharing economy” models rely heavily on churn and burn like many other less than solid business models like MLM. I would love to see the breakdown of drivers and their immigration status, because from what I can gather, what is happening here is not any different than in the past of America’s history where the whole business model relies on the exploitation of “immigrant” labor that knows no better and is easily exploited, aka their unrealized labor value is converted into profit, or better states, benefits and riches for the executives.
  - bushbaba 4y ago
    I wouldn’t assume immigrants “knows no better”. More likely if they don’t have a better opportunity available. Especially if they are not on a visa.
- jelling 4y ago
  Bingo. Andrew Chen, formerly of Uber, says exactly that in his excellent new book The Cold Start problem. The driver side is the hard side of the market and must be constantly tended.

thraway3837 4y ago

christophilus 4y ago
I’ve been in the industry for 20 years. Colo or even running your own datacenters. Makes sense at their size.
dang 4y ago
Please don't cross into personal attack in comments. Making substantive points without swipes is essential to the kind of forum we're hoping to have here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
astrange 4y ago
Uber doesn’t make money. The bigger their enterprise is the less money they make. They should be firing anyone who says they need more complicated systems to scale when the idea could run on a PC under their desk.

hackernewds 4y ago

driver cost is a lot more than $3.75. you think really drivers are working for 75% of a $10 ride per active hour? they're publicly measured to make 4x that

hyperhopper 4y ago
He said Uber is taking 3.75. that means the driver is getting 11.25. You flipped the values. The driver is making a bunch, and that's per ride, not per hour

rdxm 4y ago

Barrin92 4y ago

>What am I missing?? Competition. Part of Uber's biggest expenses is "driver and customer incentives" which is corporate speak for bribing people to stay on the app. We know from economics that competition drives down profits and rid hailing services are a dime a dozen.

robbiemitchell 4y ago

Legal, finance, HR, R&D, facilities, comms, support, endless vendors for all of the above… And no, you can’t just automate support. Refunds are not the only issue.

uh_actually 4y ago

You're missing insurance costs, which dwarf payment processing, fraud, and support.

oneoff786 4y ago

Are these numbers made up? Everyone is pointing out the indirect costs but I suspect that’s only a piece of it. A big chunk of that $15 goes to driver incentive promotions. Not the steady state cost, but the sign bonuses and what not. Given high driver churn, this is always a big line item. Google first result says just 3% of drivers drive for them for more than a year.

eden-alpha 4y ago

Insurance?

bushbaba 4y ago

Colo of servers might not be cheaper. Either way the server cost should and could be minimal per ride.

thawaya3113 4y ago

The 25% take is likely only in their best markets. Most of their markets are terrible markets.

briandear 4y ago

> Marketing? Fuck Marketing Do you have an MBA or other similar business experience? Because you can’t “fuck marketing.” Without marketing you have no business. How are people going to find out about your product?

jitix 4y ago
Exactly! As a SWE pursuing MBA, I was surprised to learn how critical marketing is to the existence of a business, and that it's way more logical, quantitative and data driven than people realize. You can write a hugely popular app with great UX, and super scalable backend but if you don't align your marketing parameters you won't make ends meet.
- DeathArrow 4y ago
  >Exactly! As a SWE pursuing MBA, I was surprised to learn how critical marketing is to the existence of a business And you are wondering that people who are in business to teach you something tell you how vital is what they are teaching you? All salesmen sell things that are vital for your success, health, well being if you trust what they are telling.
DeathArrow 4y ago
How did people find out about Google, YouTube, Facebook, Whatsapp, Waze, Instagram, when they have started? I think it was because they provided an unique service and word of mouth was enough. I remember when Gmail was in beta. There was no marketing. I was fortunate to receive an invite and once I get 5 invites, friends were begging me to send them one.

quickthrower2 4y ago

Marketing. At first people needed to know about Uber. Then they needed to trust Uber. But now they need to carry on using Uber instead of the competitors. I think if the tech investment bubble bursts (if it is a bubble) then this makes it easier for Uber in terms of competition as ride prices will tend towards the original "Taxi" prices and people will have to get used to that. And then Uber can make their profit (and also the drivers can make a reasonable living).

DeathArrow 4y ago
In my country Uber is more expensive than taxis. Sometimes much more expensive during rush hours or busy days or holidays. A lady I know payd 10x the price for a taxi ride because it was new Years Eve.

obblekk 4y ago

You've missed the following: Take rate ~40% = $6 - payments -0.7 (correct) - servers -0.2 (correct) - refunds -1 (driver is indemnified, not in cabs) - shared rides -1 (on avg, not in cabs) - insurance -1 (drivers and riders get generous insurance, not in cabs) now we have $2.5 per ride to pay fixed costs, not including marketing. in reality, they also give out generous marketing coupons to riders which cabs did not do. $1 per ride on avg discount drops us to $1.5 per ride. it's probably true that 100 engineers could sustain uber in the US without any new features. 100 * 500k payroll cost = $50M/yr = 33M rides per year. Lyft alone did >300M rides per year. Uber and lyft combined would be a solid company able to sustain and be profitable. This company would provide a way higher quality service (and safer, and more insured) than it replaced, without monopoly profits being captured by rich medallion holding families. However, uber and lyft are still pouring money into product development. Shared rides as an example, still hold the potential to improve everything in cities massively. Lower cost than taxi, faster than bus, less congesting than private car. Both also seem to be expanding outside of ride share, which should be viewed like amazon expanding to aws 15 years ago. if it works, there could be hugely positive impact. if it doesn't, then it's a massive waste of shareholder capital. ¯\_(ツ)_/¯

arrosenberg 4y ago
> without monopoly profits being captured by rich medallion holding families. Then we'd have a(n) (inter)national tech monopoly. Soooo much better.

StillBored 4y ago

The uber/swift rewrite thread from a couple years ago is highly informative of the company "engineering" culture. The kinds of decisions taken for granted by the hacker news thread/etc are the kinds of decisions that could sink a self funded company, starting with the fact that they are basically writing multiple copies of the application for each platform (ios vs android) and going from there. This is maybe the problem with VC funded companies (like government contracts) the money just keeps flowing independent of all the bad decisions being made. Also, having enough engineers that whole teams can be split off to rewrite the application for no appreciable benefit except to peoples resume's is itself an upper mgmt problem. If the goal was a single unified application I might see how something like that could be justified, but they choose technology stacks that are to native for that to work.

puranjay 4y ago
What happens when VC money stops flowing in? Do all these unprofitable companies collapse?