8 ms·

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a si

"Taxi services" was never going to be a silicon valley style success, because it just can't scale that way. "Food delivery services" was never going to be a silicon valley style success, because it just can't scale that way.

Ensorceled 3y ago
Good point, those companies are also going to collapse.
hackernewds 3y ago
They still aren't in a high rate environment
im3w1l 3y ago
I think those are different, because they are frequent small transactions where having a smooth flow is essential. Renting an office is a longer term relationship so a marginal improvement in transaction cost doesn't really move the needle in the same way.
- ghaff 3y ago
  Those businesses have some shared infrastructure and brand--maybe more than WeWork--but they're still largely city-by-city labor-intensive retail businesses that still can't clearly profitably operate at scale, at least at their current cost structure.
ape4 3y ago
Those services don't own their taxis or bikes.
- Ensorceled 3y ago
  WeWork doesn't own much of it's property, it leases and rerents.
LudwigNagasena 3y ago
They have different models. WeWork gets a long-term lease for a property, refurbishes it and subleases it to tenants. Neo taxi and food delivery companies are just matching apps that connect sellers with buyers and, in case of taxis, set prices. Adding or removing a new service provider doesn’t have as much sunk costs as leasing a giant office space for several years.
scarface74 3y ago
You realize that in both of your examples, the companies are losing billions?
deleted 3y ago
[deleted]
AndrewDucker 3y ago
Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ https://fourweekmba.com/uber-losses-by-year/ Deliveroo, likewise: https://www.businessofapps.com/data/deliveroo-statistics/ https://www.businessofapps.com/data/deliveroo-statistics/ These are not successful companies, except insofar as they are very successful at handing out investor money.
- IshKebab 3y ago
  I feel like Uber's losses are deliberate at this point, like Amazon's lack of profit. If you look up their losses per journey it's something completely trivial like 50c. Uber's customers are not that price sensitive so if they really did want to make a profit they could probably just raise their prices a little bit.
  - pclmulqdq 3y ago
    With Amazon, you could point to what they were spending the money on. With Uber, it's a lot less clear what they are doing other than gaining market share with discounts. They are going to lose a lot of that market share when the discounts go away.
  - helsinkiandrew 3y ago
    It's actually profitable https://www.sec.gov/Archives/edgar/data/1543151/000154315123000013/uberq123earningspressrelea.htm https://www.sec.gov/Archives/edgar/data/1543151/000154315123... But I think the consensus is that (unlike Amazon) there is no more scale for them to reach which would make their business model profitable enough to justify the valuation - their only route to large profits is to destroy the rest of the competition and raise prices. "On Monday morning, an Uber from Manhattan to JFK Airport was $100—nearly double the fixed yellow cab rate. But good luck finding a yellow cab" https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-rides.html https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r...
    - epolanski 3y ago
tourmalinetaco 3y ago
Twitter and YouTube don’t make profits, yet are still wildly successful. With a high enough amounts of hype, stock price, and money, a company can stave off reality in seeming perpetuity.
- deleted 3y ago
  [deleted]
- hef19898 3y ago
  Wasn't Twitter mostly profitable, except for some hugebsttlement with the FCC (?)? Until recently that is.
  - fundad 3y ago
    [flagged]
  - leetharris 3y ago
    Elon said that when he acquired Twitter it was burning $4 million per day.
    - detaro 3y ago
      Afaik the number was after the acquisition, and thus with Twitter on the hook for $1.2 billion of yearly debt repayment from the acquisition loans?
    - hef19898 3y ago
      If your source would have been Twitters SEC filings, I woupd believe it. By now, I wouldn't believe Elon tellong me it's raining while being soaked in rain, waiting for one the millions of Tesla's robot taxis to pick me up.
      - deleted 3y ago
        [deleted]
    - qwytw 3y ago
Marazan 3y ago
Yes, you are right on both of those.

Ensorceled 3y ago

Good point, those companies are also going to collapse.

hackernewds 3y ago

They still aren't in a high rate environment

im3w1l 3y ago

I think those are different, because they are frequent small transactions where having a smooth flow is essential. Renting an office is a longer term relationship so a marginal improvement in transaction cost doesn't really move the needle in the same way.

ghaff 3y ago
Those businesses have some shared infrastructure and brand--maybe more than WeWork--but they're still largely city-by-city labor-intensive retail businesses that still can't clearly profitably operate at scale, at least at their current cost structure.

ape4 3y ago

Those services don't own their taxis or bikes.

Ensorceled 3y ago
WeWork doesn't own much of it's property, it leases and rerents.

LudwigNagasena 3y ago

They have different models. WeWork gets a long-term lease for a property, refurbishes it and subleases it to tenants. Neo taxi and food delivery companies are just matching apps that connect sellers with buyers and, in case of taxis, set prices. Adding or removing a new service provider doesn’t have as much sunk costs as leasing a giant office space for several years.

scarface74 3y ago

You realize that in both of your examples, the companies are losing billions?

deleted 3y ago

[deleted]

AndrewDucker 3y ago

Uber has made losses every year, and only works because it is supported by VC money: https://fourweekmba.com/uber-losses-by-year/ https://fourweekmba.com/uber-losses-by-year/ Deliveroo, likewise: https://www.businessofapps.com/data/deliveroo-statistics/ https://www.businessofapps.com/data/deliveroo-statistics/ These are not successful companies, except insofar as they are very successful at handing out investor money.

IshKebab 3y ago
I feel like Uber's losses are deliberate at this point, like Amazon's lack of profit. If you look up their losses per journey it's something completely trivial like 50c. Uber's customers are not that price sensitive so if they really did want to make a profit they could probably just raise their prices a little bit.
- pclmulqdq 3y ago
  With Amazon, you could point to what they were spending the money on. With Uber, it's a lot less clear what they are doing other than gaining market share with discounts. They are going to lose a lot of that market share when the discounts go away.
- helsinkiandrew 3y ago
  It's actually profitable https://www.sec.gov/Archives/edgar/data/1543151/000154315123000013/uberq123earningspressrelea.htm https://www.sec.gov/Archives/edgar/data/1543151/000154315123... But I think the consensus is that (unlike Amazon) there is no more scale for them to reach which would make their business model profitable enough to justify the valuation - their only route to large profits is to destroy the rest of the competition and raise prices. "On Monday morning, an Uber from Manhattan to JFK Airport was $100—nearly double the fixed yellow cab rate. But good luck finding a yellow cab" https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-rides.html https://slate.com/business/2022/05/uber-subsidy-lyft-cheap-r...
  - epolanski 3y ago

tourmalinetaco 3y ago

Twitter and YouTube don’t make profits, yet are still wildly successful. With a high enough amounts of hype, stock price, and money, a company can stave off reality in seeming perpetuity.

deleted 3y ago
[deleted]
hef19898 3y ago
Wasn't Twitter mostly profitable, except for some hugebsttlement with the FCC (?)? Until recently that is.
- fundad 3y ago
  [flagged]
- leetharris 3y ago
  Elon said that when he acquired Twitter it was burning $4 million per day.
  - detaro 3y ago
    Afaik the number was after the acquisition, and thus with Twitter on the hook for $1.2 billion of yearly debt repayment from the acquisition loans?
  - hef19898 3y ago
    If your source would have been Twitters SEC filings, I woupd believe it. By now, I wouldn't believe Elon tellong me it's raining while being soaked in rain, waiting for one the millions of Tesla's robot taxis to pick me up.
    - deleted 3y ago
      [deleted]
  - qwytw 3y ago

Marazan 3y ago

Yes, you are right on both of those.