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Cool, let me know when either of them has a positive earnings per share. I'm still a bit surprised that we don't see more investor pressure for many of these c

Cool, let me know when either of them has a positive earnings per share. I'm still a bit surprised that we don't see more investor pressure for many of these companies to demonstrate that they actually can turn a profit. I get it, when Uber was just in SF, the argument was "don't worry about profit, just grow until you eat the entire industry... then you turn on the profit switch". But here we are, Uber has IPO'd, is in every city in the US and many countries around the world, and has only one major competitor which the WSJ claims is "eating their dust". When do you flip that profit switch if not now? The most obvious reason I can think for not flipping the switch is there is none. Still very curious when, if ever, the market will care.

makestuff 4y ago
Grab app works well enough for big cities for calling a yellow cab. Also several big cities have flat rates from the airport into the city center. Ex: JFK -> NYC is $75 flat rate. I rarely see an uber cheaper than that. Also the taxis are usually waiting so you don't have to track down a random car. All of that to say I don't think there is a profit switch. Uber doesn't really give any benefits over a taxi in large metros anymore which I assume is where most of their profit comes from.
- jen20 4y ago
  52 from JFK to Manhattan. Much better value than an Uber on average - no vehicle moves as fast as an NYC cab on that route.
mumblemumble 4y ago
I really don't think there is one. They have no competitive moat, and they know it. That's why we've seen so many antics around branching out into parallel and tangential business models over the past several years. If they knew how to make their core taxi service profitable, then I can't really see why they didn't just do that instead of faffing around with all these side hustles.
treis 4y ago
They're still building back from Covid. Lyft had 3.6 billion revenue in 2019. That dipped to 2.4 in 2020, and 3.1 in 2021. They only got back to their 2019 revenue in Q1 or Q2 of 2022.
standardUser 4y ago
Being a household name and having a presence in virtually every corner of the country is worth a lot.
- actionablefiber 4y ago
  It's not worth anything if they can't figure out how to turn a profit.
  - standardUser 4y ago
    According to the market it's worth a cool $50 billion or so.
    - actionablefiber 4y ago
      The market seems to have thought it was worth more than twice that not very long ago. Maybe the market isn't super great at valuing things in the short term, especially things that lose money.
      - standardUser 4y ago
        However we evaluate Uber, we're going to be way off the mark if we don't appreciate the immense value of brands.
        actionablefiber 4y ago
        Whatever value we assign to the brand name "Uber", how do we appreciate the immense negative value in aggressively losing money with no end in sight? Surely that should figure into their valuation somehow. I'm not sure their brand recognition can possibly get any better. It's been top-notch for years. All that's left is to make the unit economics work out. So, where are they on that?
        standardUser 4y ago
gtowey 4y ago
> The most obvious reason I can think for not flipping the switch is there is none. Still very curious when, if ever, the market will care. This is exactly correct. If they could have, it would be profitable by now. A lot of these large tech companies simply act as wealth transfer vehicles, enriching a few key players. When private, the insane valuations drive ever larger VC funding rounds with early investors cashing out with money from later rounds. Leadership teams take home millions in compensation and equity. All of them have a huge incentive to keep the fiction going. By the time the company goes public, the last rats leave the sinking ship with public money and the company is now a zombie. Everyone left is just scavenging the scraps leftover until a few unlucky souls are left holding the bag. The thing is I can't convince myself that this is meaningfully different than a classic ponzi scheme. I guess because they have a "product" and and a revenue stream. But their business is basically selling $1.00 for $0.90 -- no surprise that their volume is insane.
- SoftTalker 4y ago
  They aren't just scamming the investors, they are scamming the drivers. Most drivers barely break even (if even that) driving for these services, but they are starting to catch on. It's not worth it for drivers, so there aren't enough drivers, so the customer experience is getting worse. If they paid well enough to actually compensate for the wear and depreciation on the driver's car, and also compensate the driver for his labor, they would be even less profitable.
  - gtowey 4y ago
    > They aren't just scamming the investors, they are scamming the drivers. I agree. And this is one of the reasons that their path to profitability is impossible. Since they often cite their large customer and driver acquisition campaigns as the thing they can cut to start taking profits when they have scaled enough. The truth is that they can't stop that spending, they need a constant stream of new drivers (suckers) to keep things going. If they stop the spend, the drivers go away.
  - loufe 4y ago
    This is such a frustratingly common take. I want to believe it but I have met so many Uber drivers with 5000+ rides who, when I ask, say they enjoy the job. I really cannot imagine these people are these for the pleasure of driving. They're making money. Maybe, probably, likely, not lots, but they are certainly at the very least making ends meet. My last driver on vacation said he was on his 3rd vehicle over 7 years of driving with Uber. I imagine if he's still going, he's doing more than "breaking even".

makestuff 4y ago

Grab app works well enough for big cities for calling a yellow cab. Also several big cities have flat rates from the airport into the city center. Ex: JFK -> NYC is $75 flat rate. I rarely see an uber cheaper than that. Also the taxis are usually waiting so you don't have to track down a random car. All of that to say I don't think there is a profit switch. Uber doesn't really give any benefits over a taxi in large metros anymore which I assume is where most of their profit comes from.

jen20 4y ago
52 from JFK to Manhattan. Much better value than an Uber on average - no vehicle moves as fast as an NYC cab on that route.

mumblemumble 4y ago

I really don't think there is one. They have no competitive moat, and they know it. That's why we've seen so many antics around branching out into parallel and tangential business models over the past several years. If they knew how to make their core taxi service profitable, then I can't really see why they didn't just do that instead of faffing around with all these side hustles.

treis 4y ago

They're still building back from Covid. Lyft had 3.6 billion revenue in 2019. That dipped to 2.4 in 2020, and 3.1 in 2021. They only got back to their 2019 revenue in Q1 or Q2 of 2022.

standardUser 4y ago

Being a household name and having a presence in virtually every corner of the country is worth a lot.

actionablefiber 4y ago
It's not worth anything if they can't figure out how to turn a profit.
- standardUser 4y ago
  According to the market it's worth a cool $50 billion or so.
  - actionablefiber 4y ago
    The market seems to have thought it was worth more than twice that not very long ago. Maybe the market isn't super great at valuing things in the short term, especially things that lose money.
    - standardUser 4y ago
      However we evaluate Uber, we're going to be way off the mark if we don't appreciate the immense value of brands.
      - actionablefiber 4y ago
        Whatever value we assign to the brand name "Uber", how do we appreciate the immense negative value in aggressively losing money with no end in sight? Surely that should figure into their valuation somehow. I'm not sure their brand recognition can possibly get any better. It's been top-notch for years. All that's left is to make the unit economics work out. So, where are they on that?
        standardUser 4y ago

gtowey 4y ago

> The most obvious reason I can think for not flipping the switch is there is none. Still very curious when, if ever, the market will care. This is exactly correct. If they could have, it would be profitable by now. A lot of these large tech companies simply act as wealth transfer vehicles, enriching a few key players. When private, the insane valuations drive ever larger VC funding rounds with early investors cashing out with money from later rounds. Leadership teams take home millions in compensation and equity. All of them have a huge incentive to keep the fiction going. By the time the company goes public, the last rats leave the sinking ship with public money and the company is now a zombie. Everyone left is just scavenging the scraps leftover until a few unlucky souls are left holding the bag. The thing is I can't convince myself that this is meaningfully different than a classic ponzi scheme. I guess because they have a "product" and and a revenue stream. But their business is basically selling $1.00 for $0.90 -- no surprise that their volume is insane.

SoftTalker 4y ago
They aren't just scamming the investors, they are scamming the drivers. Most drivers barely break even (if even that) driving for these services, but they are starting to catch on. It's not worth it for drivers, so there aren't enough drivers, so the customer experience is getting worse. If they paid well enough to actually compensate for the wear and depreciation on the driver's car, and also compensate the driver for his labor, they would be even less profitable.
- gtowey 4y ago
  > They aren't just scamming the investors, they are scamming the drivers. I agree. And this is one of the reasons that their path to profitability is impossible. Since they often cite their large customer and driver acquisition campaigns as the thing they can cut to start taking profits when they have scaled enough. The truth is that they can't stop that spending, they need a constant stream of new drivers (suckers) to keep things going. If they stop the spend, the drivers go away.
- loufe 4y ago
  This is such a frustratingly common take. I want to believe it but I have met so many Uber drivers with 5000+ rides who, when I ask, say they enjoy the job. I really cannot imagine these people are these for the pleasure of driving. They're making money. Maybe, probably, likely, not lots, but they are certainly at the very least making ends meet. My last driver on vacation said he was on his 3rd vehicle over 7 years of driving with Uber. I imagine if he's still going, he's doing more than "breaking even".