22 ms·

Uber posts first quarterly net profit

219 points by boeingUH60 3y ago

draw_down 3y ago
[dead]
disgruntledphd2 3y ago
Wow, I've been a consistent Uber-bear since 2016, so am pretty surprised by this. Only another 30 years or so of profits like this to repay their accumulated loss!
- BillyTheKing 3y ago
  That's not too bad - they only have to bring that down to 4-7 years to get in sync with their valuation!
- treis 3y ago
  As a Uber-bull I'm grateful that I no longer have to point out that "Uber subsidizes rides" isn't true and hasn't been for years.
  - styren 3y ago
    What exactly would "subsidize" mean in this context? If they're charging way less than they need to break even isn't that technically a subsidized ride?
  - twelve40 3y ago
    > "Uber subsidizes rides" isn't true and hasn't been for years given that they have full control and zero transparency over price of every trip, how can you be so certain?
    - treis 3y ago
      They're a public company and have to report financials. You can look at them and see that net margin on a ride is positive.
      - minsc_and_boo 3y ago
        That doesn't mean they're not subsidizing individual markets to remain competitive though. It just means the average is marginal. IIRC Uber lost $2B on the Chinese marketing simply because of subsidies.
        V-eHGsd_ 3y ago
        > IIRC Uber lost $2B on the Chinese marketing simply because of subsidies. uber pulled out of china in 2016 ...
        minsc_and_boo 3y ago
        Because it was a loss leader. It's proof that Uber subsidizes individual markets differently.
        V-eHGsd_ 3y ago
        it's proof they subsidized, past-test, 7 years ago. its really weird to point to what uber did more than 7 years ago as non public company with no public reporting requirements, and try to use that to refute publicly reported numbers from today.
      - twelve40 3y ago
        They have lost $31.5B since 2014 and turned a profit just now. Where did that money go? That one Beyonce party, or it still might have had something to do with their main thing, the rides?
- Analemma_ 3y ago
  Don't forget it also has to repay not just the cash losses but the opportunity cost from the money you could've made by just parking it in an index fund instead of investing in Uber. When you factor that in, it's probably more like 50 years before Uber actually becomes "a good investment".
  - wskinner 3y ago
    Uber was a good investment for all of their private investors until SoftBank. For many of those investors, it was the best investment they ever made (see Benchmark, for example). For very late stage private investors who entered when the company was valued around $50B, it's more complicated and depends on the entry and exit timing. But rest assured that the returns to all investors who bought their stake before 2015 greatly exceeded their opportunity cost.
- mighmi 3y ago
  It's only a profit because of a gain in their equity holdings. > recognized a $386 million unrealized pre-tax gain related to the revaluation of our equity investments
- deleted 3y ago
  [deleted]
jjar 3y ago
https://archive.is/9D6yR https://archive.is/9D6yR
- linusg789 3y ago
  https://ghostarchive.org/archive/hhx0x https://ghostarchive.org/archive/hhx0x
agentofoblivion 3y ago
I remember reading plenty of thought pieces a few years ago saying this was impossible, and that Uber was a house of cards gaining market share by subsidizing rides with investor money. That there were no economies of scale to bring costs down, etc., etc. I would love to see a "what we got wrong, and what we still have right" post from one of these people, but I won't hold my breath.
- smcl 3y ago
  Is a profit of $394m one quarter sufficient indication that this kind of criticism was wrong? As far as I recall, Uber lost quite a bit more money than this each year since 2016 so they'd have to repeat this a few times if we're to believe this is them hitting long-term profitability. Also my memory of Uber critiques weren't that they'd never be profitable, but that as a business they aren't quite as unique and untouchable as their valuation suggested (which, given the number of competing companies that operate in my city, is correct).
- mjburgess 3y ago
  I don't think the claim would be about quarterly profits. It has had profitable quaters before. Consider, eg, >Uber on Tuesday posted a profit of $394 million during the second quarter, compared with a loss of $2.60 billion a year earlier This really doesn't answer or refute any questions around their business model. The final question is: what's the moat? It's trivial to create these "automate contract labour" apps, and many now exist. It seems an industry designed to reach, at its height, tiny profit margins. I suspect regulation is heading in the direction of making it easier for people to move their data between apps too -- if that happens, the "social-data" moats of these bizes will disappear. They'll be left with IP that teens could compete with
  - mi_lk 3y ago
    > It's trivial to create these "automate contract labour" apps Just another HN Tuesday I see. It’s so easy that it’s still duopoly in US since the inception of the market.
booleandilemma 3y ago
"Thank you, we couldn't have done it without the incompetency of the New York City subway system!"
- crazygringo 3y ago
  Did you mean to say the New York City taxicab racket? Uber has taken a big bite out of the yellow cab industry, thankfully. Not the subway system to any appreciable degree.
harg 3y ago
A few years ago it seemed everyone in London used Uber the whole time to get around. It was pretty cheap and convenient. Nowadays very few people I know seem to use Uber (and the equivalents) on even an occasional basis. It's a lot more expensive than it used to be and you just can't rely on it any more. I tried to get one last month for the first time in ages (from a not particularly out-of-way location) and no driver was around to accept my booking. It took over an hour of trying and I eventually managed to get a Bolt. It was a painful experience. In a way it's a good thing - I don't think it's sustainable to have everyone be driven around in private. vehicles in European cities, especially when there's often very good public transit available. There was a point when Uber usage was simply a lazy habit for people. Although I accept that for some people and situations it is the best option (disabled, lots of luggage etc)
- t0mas88 3y ago
  I had the same experience. It used to be quite convenient, but not anymore. A few weeks ago I tried to get from Shoreditch to Canary Wharf during a normal workday. Used both Bolt and Uber, took half an hour to get a car while both promised pickup within 3 minutes...
  - curiousgal 3y ago
    Overground to Whitechapel and then Elizabeth Line. I gave up on Uber in London.
- evgen 3y ago
  I was never a huge Uber fan but would use them occasionally, especially when I needed to take a trip that did not start or end in zone 1. These days? I ended up nuking the app from my phone because the service had become useless. Back to black cabs (and tube/bus) for me.
- a2tech 3y ago
  Last time I was in London I had the worst time with Uber--I could always get a car, but they could never find me then they'd call me and it was always a mess trying to find one another. I eventually just switched to using the black cabs and that worked a lot better
xyzzy_plugh 3y ago
As a long time and heavy Uber user, I don't find this surprising. The service has gone completely down hill for me the last few months. The app is the buggiest it has ever been. I've been overcharged more time than I can count, and customer service is practically impossible to actually get in touch with. Even when I do get in touch with customer service, I can usually only extract an automatic token refund. The quality of rides, both vehicles and drivers, has drastically declined in my area. I frequently speak with drivers and they seem, anecdotally, the least happy with Uber that I've observed thus far. With UberEATS, hidden fees and markup have gotten so big that most orders are > 2x the cost at the actual restaurant (for example a pickup order) and this is constant with order size. For example, a $25 order ends up costing over $50 on UberEATS, and this is before any tip. A dark pattern I frequently encounter is a "buy one get one free" or other promotion that adds extra stuff to your cart, and does indeed discount the item, but still charges you fees on the cost of that item. For example, a "free" $10 item can easily add more than $10 to the bill (especially if you tip). This is obviously better than a $10 item costing you $20, but it's a dark pattern nonetheless. And of course, the tips and fees are always calculated "before discounts" which makes the default tip bananas, especially when I'm redeeming credit from customer service. The priority delivery fee is basically mandatory if you want warm food, otherwise your order always gets delayed until another order can be delivered alongside it. Delivery drivers frequently drive for multiple apps at the same time, meaning delivery estimates are frequently missed due to the driver going way out of their way to do some other task, before or after picking up your food. All in all, I can feel where the corners are being cut, where the customers and drivers and restaurants are being squeezed, and so I'm not surprised to see them post a profit. Is this sustainable? I sincerely doubt it. It's a race to the bottom. It always was.
- ajaimk 3y ago
  The priority delivery fee is a hot mess for me. Every time I use it, the food actually takes more time to get to me cause they wait longer for a driver to come pick it up.
- spaceman_2020 3y ago
  at least here in India, Uber's service has become downright hostile. Drivers will cancel if the destination isn't to their liking. At airports, they refuse to even arrive if you don't pay them extra in cash. The only people who still use Uber are the ones who have no options or don't know about the options available. The worst part is that they've driven out all the existing private cab operators from many airports through their earlier aggressive pricing. So now you literally have no option but to take an Uber from some airports, except that the Uber driver will be hostile and charge extra in cash. I really want this company to crash and burn. From drivers to customers, no one has a good thing to say about them here.
mamonster 3y ago
The one annoying part about the Uber quarterly report is that there is a huge amount of variability coming from the "other income" part, which is basically where it accounts for it's investments in Didi, Zomato, Grab and other ride hailers. I really hate this trend of divesting operations by taking an equity stake(remember the Shopify logistics sale to flexport for equity ?Many other examples) in the buyer. You haven't gotten rid of the unprofitable operation, you have just given it to another company for an ownershipstake instead of cold hard cash, so now the variability/loss from operations gets moved to other income, and instead of loosing actual money you are holding unrealized losses on your stock investments.
- Tillgg 3y ago
  These equity stakes also present potential upside. For Uber, the equity stakes in Didi, Zomato, Grab and others provide them with exposure to these markets without bearing the operational risks and costs. If these companies thrive, Uber will profit from the increase in value of its stake. Strategic partnerships can bring in additional benefits. Still, I agree that this trend does complicate the analysis of reports. It also raises questions about the transparency and predictability of future earnings, as these are tied to the performance of other companies that investors may not fully understand or have visibility into. As always, it's a delicate balance between potential upside and added complexity.
rvz 3y ago
Made possible only by layoffs, selling self-driving division(s) and off-shoring engineering to outside of the US. (India)
virtualritz 3y ago
Uber is being killed by Bolt in many European cities, it seems. Bolt subsidizes rides with up to 40% promos all the time during weekdays. I just opened the app now (I'm in Berlin) and I have a 30% promo. I.e. they are so much cheaper than Uber that you have no sane choice. And on weekends you then choose Bolt out of habit. Also drivers seem to prefer Bolt, from the few conversations I had.
- tokai 3y ago
  The most popular ride "sharing" app will always be the one currently with the most VC funds to burn off.
- sealeck 3y ago
  Bolt is also European, and it's always nice to see a European company fighting back against the American incumbents. See also Adyen and Stripe.
  - quelltext 3y ago
    Adyen is several years older than Stripe. Hardly a fighting back against incumbents situation.
- ks2048 3y ago
  So, now we need another app that we can open when in a new country to show us all the local options and compare them.
- tacker2000 3y ago
  I exclusively use Bolt now, since Uber has become a total shitshow with drivers constantly cancelling or driving in circles and waiting for you to cancel. Im more happy to pay a few euros more to get a reliable and decent service. Uber was good in the beginning but since 2-3 yrs its a disaster. I cant see how it can survive here in Europe in the long run unless they fix a lot of issues. At least it has made the taxi companies wake up and embrace app based rides.
habosa 3y ago
Seems like Uber Eats really did save the company. Not with the original plan (leveraging idle capacity in the existing driver network) but instead by just discovering that urban customers are willing to be insane premiums (50%ish) to get food brought to them and that restaurants are too desperate for business to say no. Covid was probably the best thing that ever happened to Uber here, that’s when most people I know got addicted to food delivery. I really wonder if that will continue or if there will be a change in consumer attitudes towards food delivery.
- deleted 3y ago
  [deleted]
- hn_throwaway_99 3y ago
  Anecdote of 1, but with inflation, even though I could technically afford it, I just can't bring myself to pay it anymore - it's just too insane. With delivery fees, up charges, taxes and tips, it's easy to pay like $40 bucks for a pretty simple meal where I live. Especially since all I need to do is the teeniest amount of planning ahead, e.g. I'll just call ahead for pickup somewhere and plan it around times when I'm driving anyway.
  - nekoashide 3y ago
    Spending more time ordering, waiting, getting with customer support when things go south? I can go get my food without the extra cost and headache and that's what happened to our house. We stopped ordering food once it got to be more of an inconvenience than picking it up.
  - njovin 3y ago
    Anecdote++ Myself and most of my social circle happily used UberEats heavily before and during the pandemic. It was great to pay a little extra for delivery. The pricing dark patterns and inflation have put a sharp end to that. We now only use it when in a real pinch (late-night revelers getting hangry) and when we do, it's almost guaranteed that the order will be messed up and late. Delivery from our favorite local Chinese restaurant is more than double what it costs for takeout. It's absolutely not worth it anymore.
_ea1k 3y ago
Connect buyer and seller of taxi services and take a fraction off the top of the transaction. Who knew that this could actually be profitable, other than everyone?
- moduspol 3y ago
  Not virtually every commenter on every Uber-related thread on HN for the past few years? It was kind of repeated ad-nauseum that VC cash was just being burned to prop up this infeasible business model.
  - _ea1k 3y ago
    I know. And you'd get shouted down for saying otherwise too. It was really weird.
Patrol8394 3y ago
I stopped using Uber since they started ramping up prices.
eutropia 3y ago
I was there when room temperature superconductors existed before Uber’s first profitable quarter.
paulpauper 3y ago
Uber keeps defying expectations and media media predictions of its demise, as far back as 2010. uber pivoted successfully to food delivery, and has survived anything thrown at it, including lawsuits, regulation and no shortage of bad media coverage.
turnsout 3y ago
Uber and Lyft have gotten so expensive I've started hailing cabs from the Curb app, which is only marginally functional.
Gasp0de 3y ago
I am very glad that Uber was deemed illegal in Germany from the get go. All these gig-economy startups are running the same scam: Skip on employer costs such as taxes, health insurance and social security payments by not officially employing people put solely "brokering a deal between two individuals". In Germany, every employee gets paid sick leave. Uber/Foodora/Flink? Not so much. I'll gladly pay a bit extra for an actual cab driver that is properly insured and employed :)
- asah 3y ago
  Bolt, uber, etc are all legal in Berlin today fyi.
  - tyree731 3y ago
    With those services in Germany, all Uber, Bolt and others are doing are connecting you to a driver at a German company, a driver who is paid a living wage and has all of those benefits AFAIK. Those services notify you of this arrangement with every booking.
- nforgerit 3y ago
  I used to think the exact same, however have a more mixed attitude towards gig economy nowadays. - I have talked to many workers who are die-hard fans of their jobs. They highly appreciated the easy non-bureaucratic way of earning as much money as they wanted to. - Uber et all are also about disrupting antiquated oligopolies of old businesses. Esp in Germany you see a lot of gatekeeper business models who are managing their comfort zone lobbying for bureaucracy in their favor. Those are often not in favor of workers or customers.
- granzymes 3y ago
  I have used Uber in Germany before, so I’m not sure why you think it is illegal there.
  - Gasp0de 3y ago
    I stand corrected, apparently Uber can now connect you to licensed cab drivers. However, random people can not just drive you somewhere in their car.
d136o 3y ago
Perhaps a silly question: If there were previously no profits does that mean they had previously paid no taxes and now will?
- skizm 3y ago
  You can roll losses forward for 3 years I think. So they could not pay any taxes for the next 3 years depending on how much they make in profit. It is why Amazon wasn’t paying any taxes for a few years after they decided to start taking profits.
- jy1 3y ago
  They don't pay corporate income taxes without a profit but they still pay plenty of tax: 1. Sales Taxes 2. Payroll Taxes 3. Property Taxes etc
aaa_aaa 3y ago
No matter what, I say go Uber! Uber-like services are desperately needed in countries like Turkey. Taxi monopoly has an impossible to break grip on the state. Many state officials own medallions that were granted more than 30 years ago and owners still obtaining substantial money from taxi drivers. They block Uber like systems immediately. They are above law. It is so ridiculous you have to live there to comprehend the scale of this utter BS.
- pier25 3y ago
  In Mexico there are areas where taxi drivers are violent towards Uber cars and their passengers. It's a very common occurence in Cancún for example where taxi drivers are a mafia (literally, they are known to work with the narcos). It's so common, that in some cases taxi drivers have attacked non Uber cars by mistake. This is from a couple of days ago (in Spanish): https://www.infobae.com/mexico/2023/07/28/terminaron-detenidos-taxistas-agreden-a-conductor-porque-pensaron-que-era-uber-en-cancun/ https://www.infobae.com/mexico/2023/07/28/terminaron-detenid...
woeirua 3y ago
Pretty much just an accounting trick. From their prepared statement: > During Q2, we recognized a $386 million unrealized pre-tax gain related to the revaluation of our equity investments. Our GAAP net income may continue to see swings from quarter-to-quarter due to the large size of equity stakes on our balance sheet Take out the swing in equity valuation and their net income for the quarter was <$10 million.
gopher2000 3y ago
I'm curious where this goes long term. Right now, in many areas, the money earned as an Uber driver is low. Consequently, the notion of being an Uber driver has shifted from "viable full time job with lots of flexibility" to "something you can do for extra money but cannot rely on to pay bills". As customers I'd expect us to continue to see the prices and quality of ride share to down - and many of us will revert back to traditional taxis.
- derealized 3y ago
  > many of us will revert back to traditional taxis. When hell freezes maybe? Why would I do business with the local taxi mafia when these are the same cars, same drivers, poor or nonexistent app and terrible customer service? Sorry, they screwed this too much.
  - gopher2000 3y ago
    Because I can jump in one right as I exit the airport and get to my hotel cheaper than it costs to get an Uber that I have to wait X minutes for - and in LAX' case take a bus to get to. Just as an example.
    - derealized 3y ago
      Airports and taxis here have agreements where the airport gives them a fixed location in front of the exit. Just makes my point about the taxi mafia. But then, does that happen anywhere else but airports and maybe some places downtown where the taxi mafia colluded with city officials as well?
  - adeelk93 3y ago
    Taxis tend to cost half as much as Uber; if I see a taxi, I’ll take one to save some money
    - derealized 3y ago
      Not here. A ride that costs me 18-20 with Uber will be a 40-50 taxi ride.
jy1 3y ago
Incredibly bearish stance from HN here. Uber creates major consumer surplus for both riders and drivers.
aquaphile 3y ago
Despite operating for 14 years (1) and $51,488,000,000 of effective capital investment (2) Uber STILL loses money. The quarterly operating profit they reported is not GAAP net income. (1) Founded in 2009 (2) $40,550,000,000 of paid-in capital and $10,938,000,000 of long-term debt, from 12/31/2022 balance sheet
- s1artibartfast 3y ago
  where do you get 51B investment? I see 25B including the debt on CrunchBase?
  - aquaphile 3y ago
    Look at the balance sheet 10K and 10Q filings. Additional Paid-In Capital is basically all the accumulated equity investment. Add in the current long-term debt. That gives you an approximate number for the investment capital to date (though it doesn't include any long-term debt that was repaid).
tristor 3y ago
I despise Uber Eats, but almost exclusively use Uber when traveling. I have noticed a major degradation in service in every city I've been to since the pandemic, but I continue using Uber because it's the only service available that provides a similar user experience in every city I go to, even internationally, with the ability to integrate with the expense system at my company on business trips. That said, it's /very/ obvious that drivers are being squeezed and in return are becoming hostile towards riders/customers. I never put up with it, because among other things my company will not re-imburse me for paying extra cash to a driver for them to do their job out of the app. In the US, I have Lyft as a backup, but local options are so fragmented globally that I am often stuck w/ Uber, or I just order a taxi. Europe is getting doable with taxis, but outside the US/Europe, I just have to wait them out. It's really disappointing how many drivers essentially try to extort drivers through Uber now, when this was unheard of in the past. The reason I started using Uber in the first place is that it was less likely to result in driver extortion like local taxis.
- arijun 3y ago
  What happens? Do they call you and ask for more money before they pick you up? Why don't they get 0-starred after that?
  - tristor 3y ago
    It's commonplace for drivers to text you /through the app/ demanding you cancel if they don't want to take the ride after they accepted it (they get penalized if they don't accept riders when they're set to accept rides). Outside the US, they act like they don't understand English and if you start writing in the local language they curse at you. If they do show up, they demand extra money in cash or they won't drive off. Once they get marked in app as having arrived, /you/ as a rider get penalized if you take too long to get in the car and start the ride. Inside the US, drivers will just tell you to cancel and they'll stay parked in the cell phone lot at the airport until you cancel. They often actively enjoy /not/ taking the ride, because as long as the app thinks they're in transit and you as a rider cancel, they don't get penalized and don't have to do more work. Had one driver literally call me and tell me they were on their lunch break and would come get me in an hour and if I didn't want to wait I needed to cancel. Uber changed their policies and app and now a rider cancellation automatically charges a $5 fee /as soon/ as the ride is accepted, regardless of circumstances, and the fee is partially paid to the driver. So drivers literally get paid to fuck with you. Uber support is also useless, because when you get credited in the app, the credits don't get automatically used and there's no clear way to apply them when scheduling the ride. I have ~$200 in credits that continue to build until they eventually expire and have never been able to successfully use them. Since I mostly travel for work and Uber is tied into our company expense system, at some level I don't care. I'll use what the company tells me to and what they pay for, but if I travel personally I have stopped using Uber in favor of Lyft in the US, and local options/taxis elsewhere. Oh, if the ride is cancelled by either party, you can't rate the driver. So good luck 0-starring all the extorters.
wiradikusuma 3y ago
I don't understand the dichotomy between Uber/app and Taxis, why not have both and get the worst of both! In my country, Gojek (duopoly with Grab) partners with a taxi company. Until recently, when you order Gojek, they always try to match you with a taxi first. The problem is, the taxi drivers don't feel like they care about the rating system, so most of the time they reject you or ignore you. I can go through a dozen(!!!) rejections before getting one (non-taxi).
throwaway290 3y ago
Uber must have found better ways to monetize precise location of all its users. It's got to be the main thing, right?
swozey 3y ago
I'm not here to defend UE at all but some of the comments about its use are kind of going in the direction of how any discussion of UE/Doordash/etc on reddit goes where people may seem to forget that something easy for them isn't as easy as it might be for someone else. Most of the convos turn into "I can't believe anyone is stupid enough and so lazy as to waste their money on these apps when you can just drive to the place and pick it up and save $5-15+. Why are people so stupid? Make these apps run out of business!! Stop supporting them! Go get it yourself!" hundreds of times over and people are just absolutely bewildered that they're used vs someone picking up orders themselves. Sometimes you'll see a comment or three about people who genuinely need the service, like the disabled, those without transportation, etc. I use UE a LOT. 5-10+ times a week maybe. I live in the middle of downtown in a major city (USA) and all of my UE deliveries are 10-25 minute drop-offs. I won't order anything that takes 30+ unless I'm having a serious craving. I do NOT live in a part of town with a good selection of restaurants, it's about a 5-20 block walk in either direction. Now a lot of people would go "10-25 minutes? how lazy are you?" That's 10-25 minutes for someone who is ALREADY out cruising around and near the restaurant to pick up and drop off my order. If I were to drive to get it it'd take me ~5+ just to pull out of my garage and head that direction. Then I'm crossing through downtown traffic and probably have to find some parallel parking and often pay a meter. It'll easily take me 40-1hr to get back with food and I just had the displeasure of dealing with a lot more stress than backing my car out of a suburban driveway. Just as an example that I deal with all the time, I'm in a food/pharmacy desert. The nearest Pharmacy is 3 miles away. That sounds pretty close but this being downtown that's a 20-25 minute drive minimum not including getting to the car, parking, etc. It takes me about 1 hour every month of just driving back and forth to get medications I can't get shipped. I take a 2 hour lunch break to deal with it. If you're driving 30 mph it would take about 6 minutes to go 3 miles with no interruptions. It takes me ~25. If I walked it would be a 10 minute walk to the rail, a 5-15 minute ride on the train, a 5-10+ minute walk to the restaurant then reverse everything. I'm uncomfortable biking around this city so while that would be the perfect method I just won't do it. Bike theft is absolutely rampant and the infra just isn't great. I won't leave my bike outside for a second unattended. I'm 100% paying for convenience and a stress-free experience (99% of the time). It's not cheap and sometimes an order is messed up or missing something but that's honestly pretty rare in my experience. I will happily add the price of a beer or two onto my order to not deal with everything I mentioned above. I hate having to do my pharmacy trip and I'm lucky enough to own a vehicle. I feel so bad for my neighbors who don't and have to spend hours bussing around.

219 points by boeingUH60 3y ago

[dead]

Wow, I've been a consistent Uber-bear since 2016, so am pretty surprised by this. Only another 30 years or so of profits like this to repay their accumulated loss!

BillyTheKing 3y ago
That's not too bad - they only have to bring that down to 4-7 years to get in sync with their valuation!
treis 3y ago
As a Uber-bull I'm grateful that I no longer have to point out that "Uber subsidizes rides" isn't true and hasn't been for years.
- styren 3y ago
  What exactly would "subsidize" mean in this context? If they're charging way less than they need to break even isn't that technically a subsidized ride?
- twelve40 3y ago
  > "Uber subsidizes rides" isn't true and hasn't been for years given that they have full control and zero transparency over price of every trip, how can you be so certain?
  - treis 3y ago
    They're a public company and have to report financials. You can look at them and see that net margin on a ride is positive.
    - minsc_and_boo 3y ago
      That doesn't mean they're not subsidizing individual markets to remain competitive though. It just means the average is marginal. IIRC Uber lost $2B on the Chinese marketing simply because of subsidies.
      - V-eHGsd_ 3y ago
        > IIRC Uber lost $2B on the Chinese marketing simply because of subsidies. uber pulled out of china in 2016 ...
        minsc_and_boo 3y ago
        Because it was a loss leader. It's proof that Uber subsidizes individual markets differently.
        V-eHGsd_ 3y ago
        it's proof they subsidized, past-test, 7 years ago. its really weird to point to what uber did more than 7 years ago as non public company with no public reporting requirements, and try to use that to refute publicly reported numbers from today.
    - twelve40 3y ago
      They have lost $31.5B since 2014 and turned a profit just now. Where did that money go? That one Beyonce party, or it still might have had something to do with their main thing, the rides?
Analemma_ 3y ago
Don't forget it also has to repay not just the cash losses but the opportunity cost from the money you could've made by just parking it in an index fund instead of investing in Uber. When you factor that in, it's probably more like 50 years before Uber actually becomes "a good investment".
- wskinner 3y ago
  Uber was a good investment for all of their private investors until SoftBank. For many of those investors, it was the best investment they ever made (see Benchmark, for example). For very late stage private investors who entered when the company was valued around $50B, it's more complicated and depends on the entry and exit timing. But rest assured that the returns to all investors who bought their stake before 2015 greatly exceeded their opportunity cost.
mighmi 3y ago
It's only a profit because of a gain in their equity holdings. > recognized a $386 million unrealized pre-tax gain related to the revaluation of our equity investments
deleted 3y ago
[deleted]

jjar 3y ago

https://archive.is/9D6yR https://archive.is/9D6yR

linusg789 3y ago
https://ghostarchive.org/archive/hhx0x https://ghostarchive.org/archive/hhx0x

agentofoblivion 3y ago

I remember reading plenty of thought pieces a few years ago saying this was impossible, and that Uber was a house of cards gaining market share by subsidizing rides with investor money. That there were no economies of scale to bring costs down, etc., etc. I would love to see a "what we got wrong, and what we still have right" post from one of these people, but I won't hold my breath.

smcl 3y ago
Is a profit of $394m one quarter sufficient indication that this kind of criticism was wrong? As far as I recall, Uber lost quite a bit more money than this each year since 2016 so they'd have to repeat this a few times if we're to believe this is them hitting long-term profitability. Also my memory of Uber critiques weren't that they'd never be profitable, but that as a business they aren't quite as unique and untouchable as their valuation suggested (which, given the number of competing companies that operate in my city, is correct).
mjburgess 3y ago
I don't think the claim would be about quarterly profits. It has had profitable quaters before. Consider, eg, >Uber on Tuesday posted a profit of $394 million during the second quarter, compared with a loss of $2.60 billion a year earlier This really doesn't answer or refute any questions around their business model. The final question is: what's the moat? It's trivial to create these "automate contract labour" apps, and many now exist. It seems an industry designed to reach, at its height, tiny profit margins. I suspect regulation is heading in the direction of making it easier for people to move their data between apps too -- if that happens, the "social-data" moats of these bizes will disappear. They'll be left with IP that teens could compete with
- mi_lk 3y ago
  > It's trivial to create these "automate contract labour" apps Just another HN Tuesday I see. It’s so easy that it’s still duopoly in US since the inception of the market.

booleandilemma 3y ago

"Thank you, we couldn't have done it without the incompetency of the New York City subway system!"

crazygringo 3y ago
Did you mean to say the New York City taxicab racket? Uber has taken a big bite out of the yellow cab industry, thankfully. Not the subway system to any appreciable degree.

harg 3y ago

A few years ago it seemed everyone in London used Uber the whole time to get around. It was pretty cheap and convenient. Nowadays very few people I know seem to use Uber (and the equivalents) on even an occasional basis. It's a lot more expensive than it used to be and you just can't rely on it any more. I tried to get one last month for the first time in ages (from a not particularly out-of-way location) and no driver was around to accept my booking. It took over an hour of trying and I eventually managed to get a Bolt. It was a painful experience. In a way it's a good thing - I don't think it's sustainable to have everyone be driven around in private. vehicles in European cities, especially when there's often very good public transit available. There was a point when Uber usage was simply a lazy habit for people. Although I accept that for some people and situations it is the best option (disabled, lots of luggage etc)

t0mas88 3y ago
I had the same experience. It used to be quite convenient, but not anymore. A few weeks ago I tried to get from Shoreditch to Canary Wharf during a normal workday. Used both Bolt and Uber, took half an hour to get a car while both promised pickup within 3 minutes...
- curiousgal 3y ago
  Overground to Whitechapel and then Elizabeth Line. I gave up on Uber in London.
evgen 3y ago
I was never a huge Uber fan but would use them occasionally, especially when I needed to take a trip that did not start or end in zone 1. These days? I ended up nuking the app from my phone because the service had become useless. Back to black cabs (and tube/bus) for me.
a2tech 3y ago
Last time I was in London I had the worst time with Uber--I could always get a car, but they could never find me then they'd call me and it was always a mess trying to find one another. I eventually just switched to using the black cabs and that worked a lot better

xyzzy_plugh 3y ago

As a long time and heavy Uber user, I don't find this surprising. The service has gone completely down hill for me the last few months. The app is the buggiest it has ever been. I've been overcharged more time than I can count, and customer service is practically impossible to actually get in touch with. Even when I do get in touch with customer service, I can usually only extract an automatic token refund. The quality of rides, both vehicles and drivers, has drastically declined in my area. I frequently speak with drivers and they seem, anecdotally, the least happy with Uber that I've observed thus far. With UberEATS, hidden fees and markup have gotten so big that most orders are > 2x the cost at the actual restaurant (for example a pickup order) and this is constant with order size. For example, a $25 order ends up costing over $50 on UberEATS, and this is before any tip. A dark pattern I frequently encounter is a "buy one get one free" or other promotion that adds extra stuff to your cart, and does indeed discount the item, but still charges you fees on the cost of that item. For example, a "free" $10 item can easily add more than $10 to the bill (especially if you tip). This is obviously better than a $10 item costing you $20, but it's a dark pattern nonetheless. And of course, the tips and fees are always calculated "before discounts" which makes the default tip bananas, especially when I'm redeeming credit from customer service. The priority delivery fee is basically mandatory if you want warm food, otherwise your order always gets delayed until another order can be delivered alongside it. Delivery drivers frequently drive for multiple apps at the same time, meaning delivery estimates are frequently missed due to the driver going way out of their way to do some other task, before or after picking up your food. All in all, I can feel where the corners are being cut, where the customers and drivers and restaurants are being squeezed, and so I'm not surprised to see them post a profit. Is this sustainable? I sincerely doubt it. It's a race to the bottom. It always was.

ajaimk 3y ago
The priority delivery fee is a hot mess for me. Every time I use it, the food actually takes more time to get to me cause they wait longer for a driver to come pick it up.
spaceman_2020 3y ago
at least here in India, Uber's service has become downright hostile. Drivers will cancel if the destination isn't to their liking. At airports, they refuse to even arrive if you don't pay them extra in cash. The only people who still use Uber are the ones who have no options or don't know about the options available. The worst part is that they've driven out all the existing private cab operators from many airports through their earlier aggressive pricing. So now you literally have no option but to take an Uber from some airports, except that the Uber driver will be hostile and charge extra in cash. I really want this company to crash and burn. From drivers to customers, no one has a good thing to say about them here.

mamonster 3y ago

The one annoying part about the Uber quarterly report is that there is a huge amount of variability coming from the "other income" part, which is basically where it accounts for it's investments in Didi, Zomato, Grab and other ride hailers. I really hate this trend of divesting operations by taking an equity stake(remember the Shopify logistics sale to flexport for equity ?Many other examples) in the buyer. You haven't gotten rid of the unprofitable operation, you have just given it to another company for an ownershipstake instead of cold hard cash, so now the variability/loss from operations gets moved to other income, and instead of loosing actual money you are holding unrealized losses on your stock investments.

Tillgg 3y ago
These equity stakes also present potential upside. For Uber, the equity stakes in Didi, Zomato, Grab and others provide them with exposure to these markets without bearing the operational risks and costs. If these companies thrive, Uber will profit from the increase in value of its stake. Strategic partnerships can bring in additional benefits. Still, I agree that this trend does complicate the analysis of reports. It also raises questions about the transparency and predictability of future earnings, as these are tied to the performance of other companies that investors may not fully understand or have visibility into. As always, it's a delicate balance between potential upside and added complexity.

rvz 3y ago

Made possible only by layoffs, selling self-driving division(s) and off-shoring engineering to outside of the US. (India)

virtualritz 3y ago

Uber is being killed by Bolt in many European cities, it seems. Bolt subsidizes rides with up to 40% promos all the time during weekdays. I just opened the app now (I'm in Berlin) and I have a 30% promo. I.e. they are so much cheaper than Uber that you have no sane choice. And on weekends you then choose Bolt out of habit. Also drivers seem to prefer Bolt, from the few conversations I had.

tokai 3y ago
The most popular ride "sharing" app will always be the one currently with the most VC funds to burn off.
sealeck 3y ago
Bolt is also European, and it's always nice to see a European company fighting back against the American incumbents. See also Adyen and Stripe.
- quelltext 3y ago
  Adyen is several years older than Stripe. Hardly a fighting back against incumbents situation.
ks2048 3y ago
So, now we need another app that we can open when in a new country to show us all the local options and compare them.
tacker2000 3y ago
I exclusively use Bolt now, since Uber has become a total shitshow with drivers constantly cancelling or driving in circles and waiting for you to cancel. Im more happy to pay a few euros more to get a reliable and decent service. Uber was good in the beginning but since 2-3 yrs its a disaster. I cant see how it can survive here in Europe in the long run unless they fix a lot of issues. At least it has made the taxi companies wake up and embrace app based rides.

habosa 3y ago

Seems like Uber Eats really did save the company. Not with the original plan (leveraging idle capacity in the existing driver network) but instead by just discovering that urban customers are willing to be insane premiums (50%ish) to get food brought to them and that restaurants are too desperate for business to say no. Covid was probably the best thing that ever happened to Uber here, that’s when most people I know got addicted to food delivery. I really wonder if that will continue or if there will be a change in consumer attitudes towards food delivery.

deleted 3y ago
[deleted]
hn_throwaway_99 3y ago
Anecdote of 1, but with inflation, even though I could technically afford it, I just can't bring myself to pay it anymore - it's just too insane. With delivery fees, up charges, taxes and tips, it's easy to pay like $40 bucks for a pretty simple meal where I live. Especially since all I need to do is the teeniest amount of planning ahead, e.g. I'll just call ahead for pickup somewhere and plan it around times when I'm driving anyway.
- nekoashide 3y ago
  Spending more time ordering, waiting, getting with customer support when things go south? I can go get my food without the extra cost and headache and that's what happened to our house. We stopped ordering food once it got to be more of an inconvenience than picking it up.
- njovin 3y ago
  Anecdote++ Myself and most of my social circle happily used UberEats heavily before and during the pandemic. It was great to pay a little extra for delivery. The pricing dark patterns and inflation have put a sharp end to that. We now only use it when in a real pinch (late-night revelers getting hangry) and when we do, it's almost guaranteed that the order will be messed up and late. Delivery from our favorite local Chinese restaurant is more than double what it costs for takeout. It's absolutely not worth it anymore.

_ea1k 3y ago

Connect buyer and seller of taxi services and take a fraction off the top of the transaction. Who knew that this could actually be profitable, other than everyone?

moduspol 3y ago
Not virtually every commenter on every Uber-related thread on HN for the past few years? It was kind of repeated ad-nauseum that VC cash was just being burned to prop up this infeasible business model.
- _ea1k 3y ago
  I know. And you'd get shouted down for saying otherwise too. It was really weird.

Patrol8394 3y ago

I stopped using Uber since they started ramping up prices.

eutropia 3y ago

I was there when room temperature superconductors existed before Uber’s first profitable quarter.

paulpauper 3y ago

Uber keeps defying expectations and media media predictions of its demise, as far back as 2010. uber pivoted successfully to food delivery, and has survived anything thrown at it, including lawsuits, regulation and no shortage of bad media coverage.

turnsout 3y ago

Uber and Lyft have gotten so expensive I've started hailing cabs from the Curb app, which is only marginally functional.

Gasp0de 3y ago

I am very glad that Uber was deemed illegal in Germany from the get go. All these gig-economy startups are running the same scam: Skip on employer costs such as taxes, health insurance and social security payments by not officially employing people put solely "brokering a deal between two individuals". In Germany, every employee gets paid sick leave. Uber/Foodora/Flink? Not so much. I'll gladly pay a bit extra for an actual cab driver that is properly insured and employed :)

asah 3y ago
Bolt, uber, etc are all legal in Berlin today fyi.
- tyree731 3y ago
  With those services in Germany, all Uber, Bolt and others are doing are connecting you to a driver at a German company, a driver who is paid a living wage and has all of those benefits AFAIK. Those services notify you of this arrangement with every booking.
nforgerit 3y ago
I used to think the exact same, however have a more mixed attitude towards gig economy nowadays. - I have talked to many workers who are die-hard fans of their jobs. They highly appreciated the easy non-bureaucratic way of earning as much money as they wanted to. - Uber et all are also about disrupting antiquated oligopolies of old businesses. Esp in Germany you see a lot of gatekeeper business models who are managing their comfort zone lobbying for bureaucracy in their favor. Those are often not in favor of workers or customers.
granzymes 3y ago
I have used Uber in Germany before, so I’m not sure why you think it is illegal there.
- Gasp0de 3y ago
  I stand corrected, apparently Uber can now connect you to licensed cab drivers. However, random people can not just drive you somewhere in their car.

d136o 3y ago

Perhaps a silly question: If there were previously no profits does that mean they had previously paid no taxes and now will?

skizm 3y ago
You can roll losses forward for 3 years I think. So they could not pay any taxes for the next 3 years depending on how much they make in profit. It is why Amazon wasn’t paying any taxes for a few years after they decided to start taking profits.
jy1 3y ago
They don't pay corporate income taxes without a profit but they still pay plenty of tax: 1. Sales Taxes 2. Payroll Taxes 3. Property Taxes etc

aaa_aaa 3y ago

No matter what, I say go Uber! Uber-like services are desperately needed in countries like Turkey. Taxi monopoly has an impossible to break grip on the state. Many state officials own medallions that were granted more than 30 years ago and owners still obtaining substantial money from taxi drivers. They block Uber like systems immediately. They are above law. It is so ridiculous you have to live there to comprehend the scale of this utter BS.

pier25 3y ago
In Mexico there are areas where taxi drivers are violent towards Uber cars and their passengers. It's a very common occurence in Cancún for example where taxi drivers are a mafia (literally, they are known to work with the narcos). It's so common, that in some cases taxi drivers have attacked non Uber cars by mistake. This is from a couple of days ago (in Spanish): https://www.infobae.com/mexico/2023/07/28/terminaron-detenidos-taxistas-agreden-a-conductor-porque-pensaron-que-era-uber-en-cancun/ https://www.infobae.com/mexico/2023/07/28/terminaron-detenid...

woeirua 3y ago

Pretty much just an accounting trick. From their prepared statement: > During Q2, we recognized a $386 million unrealized pre-tax gain related to the revaluation of our equity investments. Our GAAP net income may continue to see swings from quarter-to-quarter due to the large size of equity stakes on our balance sheet Take out the swing in equity valuation and their net income for the quarter was <$10 million.

gopher2000 3y ago

I'm curious where this goes long term. Right now, in many areas, the money earned as an Uber driver is low. Consequently, the notion of being an Uber driver has shifted from "viable full time job with lots of flexibility" to "something you can do for extra money but cannot rely on to pay bills". As customers I'd expect us to continue to see the prices and quality of ride share to down - and many of us will revert back to traditional taxis.

derealized 3y ago
> many of us will revert back to traditional taxis. When hell freezes maybe? Why would I do business with the local taxi mafia when these are the same cars, same drivers, poor or nonexistent app and terrible customer service? Sorry, they screwed this too much.
- gopher2000 3y ago
  Because I can jump in one right as I exit the airport and get to my hotel cheaper than it costs to get an Uber that I have to wait X minutes for - and in LAX' case take a bus to get to. Just as an example.
  - derealized 3y ago
    Airports and taxis here have agreements where the airport gives them a fixed location in front of the exit. Just makes my point about the taxi mafia. But then, does that happen anywhere else but airports and maybe some places downtown where the taxi mafia colluded with city officials as well?
- adeelk93 3y ago
  Taxis tend to cost half as much as Uber; if I see a taxi, I’ll take one to save some money
  - derealized 3y ago
    Not here. A ride that costs me 18-20 with Uber will be a 40-50 taxi ride.

jy1 3y ago

Incredibly bearish stance from HN here. Uber creates major consumer surplus for both riders and drivers.

aquaphile 3y ago

Despite operating for 14 years (1) and $51,488,000,000 of effective capital investment (2) Uber STILL loses money. The quarterly operating profit they reported is not GAAP net income. (1) Founded in 2009 (2) $40,550,000,000 of paid-in capital and $10,938,000,000 of long-term debt, from 12/31/2022 balance sheet

s1artibartfast 3y ago
where do you get 51B investment? I see 25B including the debt on CrunchBase?
- aquaphile 3y ago
  Look at the balance sheet 10K and 10Q filings. Additional Paid-In Capital is basically all the accumulated equity investment. Add in the current long-term debt. That gives you an approximate number for the investment capital to date (though it doesn't include any long-term debt that was repaid).

tristor 3y ago

I despise Uber Eats, but almost exclusively use Uber when traveling. I have noticed a major degradation in service in every city I've been to since the pandemic, but I continue using Uber because it's the only service available that provides a similar user experience in every city I go to, even internationally, with the ability to integrate with the expense system at my company on business trips. That said, it's /very/ obvious that drivers are being squeezed and in return are becoming hostile towards riders/customers. I never put up with it, because among other things my company will not re-imburse me for paying extra cash to a driver for them to do their job out of the app. In the US, I have Lyft as a backup, but local options are so fragmented globally that I am often stuck w/ Uber, or I just order a taxi. Europe is getting doable with taxis, but outside the US/Europe, I just have to wait them out. It's really disappointing how many drivers essentially try to extort drivers through Uber now, when this was unheard of in the past. The reason I started using Uber in the first place is that it was less likely to result in driver extortion like local taxis.

arijun 3y ago
What happens? Do they call you and ask for more money before they pick you up? Why don't they get 0-starred after that?
- tristor 3y ago
  It's commonplace for drivers to text you /through the app/ demanding you cancel if they don't want to take the ride after they accepted it (they get penalized if they don't accept riders when they're set to accept rides). Outside the US, they act like they don't understand English and if you start writing in the local language they curse at you. If they do show up, they demand extra money in cash or they won't drive off. Once they get marked in app as having arrived, /you/ as a rider get penalized if you take too long to get in the car and start the ride. Inside the US, drivers will just tell you to cancel and they'll stay parked in the cell phone lot at the airport until you cancel. They often actively enjoy /not/ taking the ride, because as long as the app thinks they're in transit and you as a rider cancel, they don't get penalized and don't have to do more work. Had one driver literally call me and tell me they were on their lunch break and would come get me in an hour and if I didn't want to wait I needed to cancel. Uber changed their policies and app and now a rider cancellation automatically charges a $5 fee /as soon/ as the ride is accepted, regardless of circumstances, and the fee is partially paid to the driver. So drivers literally get paid to fuck with you. Uber support is also useless, because when you get credited in the app, the credits don't get automatically used and there's no clear way to apply them when scheduling the ride. I have ~$200 in credits that continue to build until they eventually expire and have never been able to successfully use them. Since I mostly travel for work and Uber is tied into our company expense system, at some level I don't care. I'll use what the company tells me to and what they pay for, but if I travel personally I have stopped using Uber in favor of Lyft in the US, and local options/taxis elsewhere. Oh, if the ride is cancelled by either party, you can't rate the driver. So good luck 0-starring all the extorters.

wiradikusuma 3y ago

I don't understand the dichotomy between Uber/app and Taxis, why not have both and get the worst of both! In my country, Gojek (duopoly with Grab) partners with a taxi company. Until recently, when you order Gojek, they always try to match you with a taxi first. The problem is, the taxi drivers don't feel like they care about the rating system, so most of the time they reject you or ignore you. I can go through a dozen(!!!) rejections before getting one (non-taxi).

throwaway290 3y ago

Uber must have found better ways to monetize precise location of all its users. It's got to be the main thing, right?

swozey 3y ago

I'm not here to defend UE at all but some of the comments about its use are kind of going in the direction of how any discussion of UE/Doordash/etc on reddit goes where people may seem to forget that something easy for them isn't as easy as it might be for someone else. Most of the convos turn into "I can't believe anyone is stupid enough and so lazy as to waste their money on these apps when you can just drive to the place and pick it up and save $5-15+. Why are people so stupid? Make these apps run out of business!! Stop supporting them! Go get it yourself!" hundreds of times over and people are just absolutely bewildered that they're used vs someone picking up orders themselves. Sometimes you'll see a comment or three about people who genuinely need the service, like the disabled, those without transportation, etc. I use UE a LOT. 5-10+ times a week maybe. I live in the middle of downtown in a major city (USA) and all of my UE deliveries are 10-25 minute drop-offs. I won't order anything that takes 30+ unless I'm having a serious craving. I do NOT live in a part of town with a good selection of restaurants, it's about a 5-20 block walk in either direction. Now a lot of people would go "10-25 minutes? how lazy are you?" That's 10-25 minutes for someone who is ALREADY out cruising around and near the restaurant to pick up and drop off my order. If I were to drive to get it it'd take me ~5+ just to pull out of my garage and head that direction. Then I'm crossing through downtown traffic and probably have to find some parallel parking and often pay a meter. It'll easily take me 40-1hr to get back with food and I just had the displeasure of dealing with a lot more stress than backing my car out of a suburban driveway. Just as an example that I deal with all the time, I'm in a food/pharmacy desert. The nearest Pharmacy is 3 miles away. That sounds pretty close but this being downtown that's a 20-25 minute drive minimum not including getting to the car, parking, etc. It takes me about 1 hour every month of just driving back and forth to get medications I can't get shipped. I take a 2 hour lunch break to deal with it. If you're driving 30 mph it would take about 6 minutes to go 3 miles with no interruptions. It takes me ~25. If I walked it would be a 10 minute walk to the rail, a 5-15 minute ride on the train, a 5-10+ minute walk to the restaurant then reverse everything. I'm uncomfortable biking around this city so while that would be the perfect method I just won't do it. Bike theft is absolutely rampant and the infra just isn't great. I won't leave my bike outside for a second unattended. I'm 100% paying for convenience and a stress-free experience (99% of the time). It's not cheap and sometimes an order is messed up or missing something but that's honestly pretty rare in my experience. I will happily add the price of a beer or two onto my order to not deal with everything I mentioned above. I hate having to do my pharmacy trip and I'm lucky enough to own a vehicle. I feel so bad for my neighbors who don't and have to spend hours bussing around.