Uber: 5 Billion Loss In One Quarter.

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Pariah Know Your Enemy
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I have to admit that the financial condition of Uber does completely baffle me. I am not knowledgeable about the whole big corp money thing. My big question is: What the fiddlesticks are they spending all this money on??
I mean, stripped down they run a massive server back-end that supports a mobile app and runs some presumably bespoke software to coordinate all the moving parts of their service. So far so good, but how is what they do so many, many, MANY billions of dollars. With the amount of money Uber has spent they could have built the tallest sky scrapper in practically every major city on earth or they could own the worlds largest fleet of transcontinental passenger jets.
How come they keep growing and loosing money?
Every article I have ever read in finance oriented sites about Uber just never smells right, like there is some kind of wide spread conspiracy to keep framing Uber in a positive light. Lots of excuses or "wait until" type stuff.
My main question is how is it that in the future when Uber is bearing the vast cost of owning a fleet of hundreds of thousands self driving cars Uber will be able to make money when they can't make money with the vastly less capital intensive setup they have now, they own no cars and pay their drives a very low wage, don't have to worry about where to store their fleet in the cites they serve.
It seems to me that Uber is a Ponzi scheme that is only kept going because they have been able to maintain the ruse that they will be a huge money maker someday real soon now and the people who are making money off Uber now are the lucky ones who got in the scheme early or mid scam but people still holding Uber stock in the future when it all comes tumbling down will be the suckers who financed the whole house of cars because no matter how I twist this little puzzle around, examining every facet, I just don't see how they are ever going to make money.

Some years ago I read an article in the SAE Journal where an aviation industry expert of some kind put forth the assertion that if you look at the whole picture, all the money invested and profits made that over-all the commercial airline industry has never made any money. Individual airlines have for finite periods of time, but their profits are more than canceled out by the loses at other airlines. This explains the way aviation history has seen the pattern of rolling failures as airlines come, they rise, they fly for awhile and then crash, always to be replaced by a new airline with new investors which is doomed to follow the same pattern.
The ride share business seems to be similar to this.
dv
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They lose money on every ride and make it up in volume.
dv
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Also, they're not really a ride share company. Never were. They're a taxi compay and theres a reason taxis are expensive.
TOS
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dv posted:
They lose money on every ride and make it up in volume.


... or don't make it up, as the case may be
juice Inadvertently correct
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Money laundering Ponzi scheme?
dv
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TOS posted:
dv posted:
They lose money on every ride and make it up in volume.


... or don't make it up, as the case may be


<that's the joke.png>
Pariah Know Your Enemy
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The biggest flaw I see in the whole logic of Uber is the way they are developing their own self driving system. That seems utterly misguided. No major car company is going to license uber tech, they are all well on their way to developing their own self driving systems and Uber is certainly not going to be building Uber branded self driving cars to serve their own needs. There is a reason that Checker and their Marathon went out of business: The big automakers can do the job cheaper and better.
Metacell Chocolate Brahma
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I'll never understand Uber...it's paying to hitchhike.
I suspect fraud. The business practices I'm aware of such as project greyball and them actively flouting laws whenever they can leads to me that whatever isn't being sunk in the self driving project (which will always be known as the project that kills people) is problably being embezzled.
jkahless Custom Title
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I think of über as a cocaine addict in the midst of the best continuous high of their life. Haven’t slept for a week, but feeling great!
That's problably pretty accurate, especially if you think about how that addict is affecting everyone around him.
justine Elitist Beer Lover
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Uber is and always has been corrupt. More corrupt than the average corrupt company. Think going after a woman and stealing her medical records after she was raped by an Uber driver, and they were sure it was a set up by the competition. That resulted in their ejection from the country. I believe it was India? (After a quick google, it looks like they were only banned from Delhi after the rape)

They spend more money tracking and retrieving Jump bikes.

The ride share part probably costs them little to no money since the drivers are independent contractors. They just take a percentage. I'm sure there's insurance involved there somewhere. And i don't think they provide vehicles to drivers like Lyft does.
Yeah, yeah, this is a very late addition to this thread.

Let me suggest reading Hubert Horan's series on "Can Uber Ever Deliver?" which is now a 21-parter at nakedcapitalism.com. That list is in reverse chronological order. You can start with part 1 which was posted on November 30, 2016 here.

BUT if you want an hour-long primer, listen to Horan on Harry Shearer's "Le Show" which can be heard here. As the intro notes say: Shearer spends the first ten minutes on other topics, but the bulk of his program is his interview of Horan interspersed with some music.

Some highlights:

Horan dismisses Lyft in one line, saying that everything that applies to Uber also applies to Lyft although with only 1/4th the impact and effects. Below when you read "Uber" please understand that it should be read as "Uber and Lyft".

Horan notes that there is a problem with Uber fanbois comparing that company to Amazon: there is no fundamental base upon which Uber can fall back. Amazon began with selling books and has leveraged that base to expand into selling EVERYTHING, but if Amazon were forced to reduce back to that base it would still be a marginally profitable company (maybe). On the other hand Uber at its base is a taxi company, but one that has passed practically ALL costs of "its" vehicle fleet onto its drivers, that nevertheless has lost over $22 BILLION over the last five years. This is all fine as long as those Silicon Valley tech millionaires and billionaires are willing to foot THAT bill which is fundamentally designed to drive existing taxi companies out of business, but what happens if that finally happens in a given town? Will Uber's fares double or more to truly cover the company's costs?

There is the story that eventually self-driving cars will save Uber, but that story fundamentally doesn't make any sense. If self-driving cars were available RIGHT NOW, all that would do is eliminate the cut that Uber drivers get from their fares while at the same time forcing Uber to bear the full costs of buying/insuring/fueling/general upkeep for that fleet of cars which--do recall--Uber is NOT paying for now. Horan also dismisses self-driving cars as a fantasy which at soonest will be MANY decades in the future (although I personally would like to see THAT future, I have to agree on that timing).

Horan explains that the taxi medallion system used in practically all cities does serve a purpose of preventing a city's taxi services from overwhelming its streets. Imagine if ANY driver in a town could decide: "Hey, I have some free time now. Let me put on my taxi sign on the roof of my car and see if I can pick up some fares." There would be much worse traffic jams at practically all major events. In fact, in miniature we are already seeing this by the addition of Uber with bad effects upon places like airports. In part to help control the overload that Uber has imposed upon traffic at LAX, beginning on this past October 28th (I think) the airport has banned taxi, Uber and Lyft pickups at the terminals (they can still drop off fares at the terminals). Instead those drivers must head to a reserved lot which is outside of the main traffic loop inside LAX. The airline passengers will be dropped off via a shuttle service that has pickup stops at each of the terminals in order to get their rides from each taxi service.

(I must wonder: from the description it appears that this shuttle service is only one-way, picking up people at the terminals and dropping them at the horribly named "LAXit" lot. If this is so, wouldn't it make more sense for this shuttle to include picking up passengers at the LAXit lot and dropping them off at the terminals? That way the taxi, Uber and Lyft drivers would not have to negotiate the airport loop and be on the spot to pick up new fares. Or maybe I am missing something).

There is a lot more that Horan covers with Shearer.
DEyncourt posted:


... forcing Uber to bear the full costs of buying/insuring/fueling/general upkeep for that fleet of cars which--do recall--Uber is NOT paying for now.


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Pariah Know Your Enemy
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The claim that self driving cars are Uber's future never made sense to me. Uber has about 900,000 drivers now, lets say they can function with half that number of SDCs...so, lets see. 450,000 cars times..at, oh, lets say $35,000. That is a nearly 16 billion dollar cost and that is before insurance, maintenance and other costs associated with owning vehicles.

The math just don't work.
dv
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Pariah posted:
The claim that self driving cars are Uber's future never made sense to me. Uber has about 900,000 drivers now, lets say they can function with half that number of SDCs...so, lets see. 450,000 cars times..at, oh, lets say $35,000. That is a nearly 16 billion dollar cost and that is before insurance, maintenance and other costs associated with owning vehicles.

The math just don't work.


It'd be a lot fewer - most Uber drivers work <15 hours a week. You wouldn't have to replace them 1:1. Probably more like 1:8.
Vulture 420
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The business model was always with drivers factored in, and they are just preparing for the age of automation as in any business.
maurvir Steamed meat popsicle
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Pariah posted:
The claim that self driving cars are Uber's future never made sense to me. Uber has about 900,000 drivers now, lets say they can function with half that number of SDCs...so, lets see. 450,000 cars times..at, oh, lets say $35,000. That is a nearly 16 billion dollar cost and that is before insurance, maintenance and other costs associated with owning vehicles.

The math just don't work.


I think they are planning on making it up in volume... :lol:
Pariah Know Your Enemy
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Vulture posted:
The business model was always with drivers factored in, and they are just preparing for the age of automation as in any business.

I think the business plan of the Uber founders is to keep taking big fat paychecks as long as there are venture capitalists willing to throw more money into their pit.
Pretty much, at this point the whole ride sharing thing is a cover for the real business: investor fraud.
TOS
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apparently recent events have had wall street rethinking its startup-investment strategy ... namely they should maybe prioritize profitability over growth
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Uber: 5 Billion Loss In One Quarter.