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  #1  
Old 04-15-17, 11:53 PM
Yappi Yappi is offline
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Uber saw rapid growth in 2016, but it still bled cash

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Uber has revealed part of its financials for the first time, perhaps in effort to distract you from all the controversies it's involved with. The privately held ride-hailing company, which isn't required to publicize its earnings, has told Bloomberg that its sales growth is outpacing losses. Its gross bookings (or how much it collects from drivers) in 2016 apparently amounted to $20 billion, which is double the total from the year before. The company took home around $6.5 billion from that amount after adjustments.

That's not bad at all, except its net losses for the year were $2.8 billion, excluding the $1 billion it lost in 2016 from its failed venture in China. Add those two figures, and its net revenue doesn't sound that impressive anymore. MarketWatch even pointed out that Uber would've been one of the top 10 biggest money losers in 2016 if it were public.
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https://www.engadget.com/2017/04/15/...ngs-bloomberg/
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  #2  
Old 04-16-17, 12:05 AM
Neopolitan Neopolitan is offline
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Uber is losing money faster than any technology company ever, and it’s largely because of the fundamental aspect of their company: the drivers. The biggest cost to the company is the fee it pays out to drivers.

Uber paid out $5 billion to drivers last year. By comparison, they lost only $150 million to promotions and price cuts.

Last year, Uber also began taking a greater percentage of driver’s fares. They now take about 1/3 of their driver’s already poverty wages.

Bookings have grown rapidly every year that Uber has been in existence. But the flaw remains the same, you can't make money losing so much of your revenue to your employees.

Eventually, Uber will get rid of the drivers, and that will allow them to potentially turn a huge profit. I believe Pittsburgh as well as a few other cities now allow customers to order self-driving cars. Uber also acquired Otto(self driving car company) for $300 million.

So to answer the question of how Uber can make money if it has to give away so much of it to their drivers? Just get rid of them.

And if you think it's impossible for a company to turn around after such large losses, remember 2nd place for most money lost by a tech company was Amazon in the early 2000's.
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  #3  
Old 04-16-17, 01:38 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
Uber is losing money faster than any technology company ever, and itís largely because of the fundamental aspect of their company: the drivers. The biggest cost to the company is the fee it pays out to drivers.

Uber paid out $5 billion to drivers last year. By comparison, they lost only $150 million to promotions and price cuts.

Last year, Uber also began taking a greater percentage of driverís fares. They now take about 1/3 of their driverís already poverty wages.

Bookings have grown rapidly every year that Uber has been in existence. But the flaw remains the same, you can't make money losing so much of your revenue to your employees.

Eventually, Uber will get rid of the drivers, and that will allow them to potentially turn a huge profit. I believe Pittsburgh as well as a few other cities now allow customers to order self-driving cars. Uber also acquired Otto(self driving car company) for $300 million.

So to answer the question of how Uber can make money if it has to give away so much of it to their drivers? Just get rid of them.

And if you think it's impossible for a company to turn around after such large losses, remember 2nd place for most money lost by a tech company was Amazon in the early 2000's.
Dumb post is dumb.

Uber doesn't have "employees" driving Uber-owned cars. Does Uber buy fuel ? Of course most of the revenue is paid out.
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  #4  
Old 04-16-17, 01:50 PM
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Originally Posted by cabezadecaballo View Post
Dumb post is dumb.

Uber doesn't have "employees" driving Uber-owned cars. Does Uber buy fuel ? Of course most of the revenue is paid out.
Zero equipment purchas cost, zero employee healthcare cost, zero maintenance costs, zero insurance costs... I guess they should stop paying the drivers damn it!
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  #5  
Old 04-16-17, 02:00 PM
Neopolitan Neopolitan is offline
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Originally Posted by cabezadecaballo View Post
Dumb post is dumb.

Uber doesn't have "employees" driving Uber-owned cars. Does Uber buy fuel ? Of course most of the revenue is paid out.
I'm using "employees" in the loosest sense obviously.The point being, it will be very difficult for them to turn a profit with humans driving the cars. As they have to pay out a significant chunk of their revenue in driver fees.

Other than that, you addressed no part of my post. It's simple math. And their focus on self-driving cars via their purchase of Otto and rolling out the program in test cities tells me they know it.

Last edited by Neopolitan; 04-16-17 at 02:36 PM.
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  #6  
Old 04-16-17, 03:33 PM
Yappi Yappi is offline
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I just don't understand what the great costs are for Uber. Seems that they should be making a small profit off of every transaction and shouldn't have any great costs, somewhat like a credit card processor.
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  #7  
Old 04-16-17, 03:44 PM
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Originally Posted by Yappi View Post
I just don't understand what the great costs are for Uber. Seems that they should be making a small profit off of every transaction and shouldn't have any great costs, somewhat like a credit card processor.
1.) 2/3 of ever dollar goes to the driver

2.) they spend a lot on marketing. there are multiple competitors in their space

3.) keeping an app as sophisticated as uber up and running is not cheap obviously

4.) they're spending money in acquisitions of other companies/technology.

Why do you think Amazon lost money for many years? This isn't exactly uncommon in the tech world. The question is whether the losses will be made up for once Uber reaches a higher level of automation and pushes competition out(what Amazon did) or whether they can never achieve enough efficiency or market share to make it work(any # of failed tech companies)
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  #8  
Old 04-16-17, 09:17 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
I'm using "employees" in the loosest sense obviously.The point being, it will be very difficult for them to turn a profit with humans driving the cars. As they have to pay out a significant chunk of their revenue in driver fees.

Other than that, you addressed no part of my post. It's simple math. And their focus on self-driving cars via their purchase of Otto and rolling out the program in test cities tells me they know it.
Well, maybe at this point it's just about cash flow and establishing a loyal base of users. Maybe that was the goal from the beginning ? The fact is that their only investments are in advertising and a somewhat limited infrastructure.

Speaking of "employees", I'd imagine that there are a few relatively well paid execs.
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  #9  
Old 04-16-17, 09:22 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
1.) 2/3 of ever dollar goes to the driver

2.) they spend a lot on marketing. there are multiple competitors in their space

3.) keeping an app as sophisticated as uber up and running is not cheap obviously

4.) they're spending money in acquisitions of other companies/technology.

Why do you think Amazon lost money for many years? This isn't exactly uncommon in the tech world. The question is whether the losses will be made up for once Uber reaches a higher level of automation and pushes competition out(what Amazon did) or whether they can never achieve enough efficiency or market share to make it work(any # of failed tech companies)
2/3 was standard to an owner/op in brokered trucking. The guy doing the billing and dispatching that controlled the regulated cartage rights and shipping contacts took the first 1/3.
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  #10  
Old 04-16-17, 09:51 PM
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Originally Posted by cabezadecaballo View Post
The fact is that their only investments are in advertising and a somewhat limited infrastructure.
Right. And they have to pay out those investments with only 1/3 of the revenue as the first 2/3 go straight to the drivers.

Also, I would hardly call their infrastructure limited. The app is sophisticated and the investment needed to keep it running efficiently is high. If it goes down for even a few hours, it's a huge blow to the company. Can't afford to be seen as unreliable in a need it now service with major competitors.

What exactly are you arguing? My contention is Uber can not attain profitability paying the drivers as they currently do, and the path towards profitability is therefore to automate the drivers as they really can't pay them much less than they already do. The other option would be to raise prices, but there's way too much competition from both Lyft and taxis to do that.

You disagree I take it? If so, your opinion is contrary to most investors in Uber. Which is fine, just means it's more likely than not you're wrong.
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  #11  
Old 04-16-17, 10:16 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
Right. And they have to pay out those investments with only 1/3 of the revenue as the first 2/3 go straight to the drivers.

Also, I would hardly call their infrastructure limited. The app is sophisticated and the investment needed to keep it running efficiently is high. If it goes down for even a few hours, it's a huge blow to the company. Can't afford to be seen as unreliable in a need it now service with major competitors.

What exactly are you arguing? My contention is Uber can not attain profitability paying the drivers as they currently do, and the path towards profitability is therefore to automate the drivers as they really can't pay them much less than they already do. The other option would be to raise prices, but there's way too much competition from both Lyft and taxis to do that.

You disagree I take it? If so, your opinion is contrary to most investors in Uber. Which is fine, just means it's more likely than not you're wrong.
Uber is { } without the drivers and their vehicles. If they lower the take to the drivers, they lose drivers to competitors and the level of service falls. You acknowledge this yourself.

It seems stupid that your "complaint" targets a now-integral part of the whole business model, that's all. Perhaps they can phase out humans and their cars, and that will be more profitable, but as of now they are not optional.

Acquisitions are likely optional for day-to-day operation, yet you merely mention that expense in passing. Is the expense significant enough that the business could be profitable more simply run ? How is Lyft doing ? Do you believe that these investors see these acquisitions as a vital part of a plan to eventually be bought out by a larger entity ?
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  #12  
Old 04-16-17, 10:21 PM
Yappi Yappi is offline
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Originally Posted by Neopolitan View Post
You disagree I take it? If so, your opinion is contrary to most investors in Uber. Which is fine, just means it's more likely than not you're wrong.
It seems you are saying that they are between a rock and a hard place to make more money. The only avenue you (and the investors) give them is to begin using driverless cars.

IMO, that's a huge gamble that doesn't really make much sense. Uber is doing something very simple and easy to replicate. Their main function is to bring the buyers and sellers together. Being the first major player has it's advantages. OTOH, driverless cars are incredibly sophisticated. The first truly successful manufacturer will have a huge advantage over everyone else. Whichever company reaches that point will easily be able to replace Uber with their own service or potentially partner with them.

IMO, this seems like one of those tech stock bubble investments of the late 90s if that is truly the end game for Uber.
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  #13  
Old 04-16-17, 10:30 PM
Neopolitan Neopolitan is offline
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Originally Posted by cabezadecaballo View Post
It seems stupid that your "complaint" targets a now-integral part of the whole business model, that's all.
Who said I was complaining? They can't be profitable at their current model. To be profitable, they must reduce the cut they pay to drivers. Likely the only way to accomplish this is through self-driving Uber vehicles, which they're clearly focusing on due to their acquisition of Otto and roll outs in test markets(as well as their largest investor saying as much.) Will it work, who knows?

Stating the reality of the business isn't "complaining" or "targeting" the poor drivers. Don't be so sensitive.
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Old 04-16-17, 10:33 PM
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Originally Posted by Yappi View Post
Uber is doing something very simple and easy to replicate.
I would say that's an incredibly naive view.

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IMO, this seems like one of those tech stock bubble investments of the late 90s if that is truly the end game for Uber.
May very well be. On the other hand, you would have probably said the same about Amazon while they were bleeding billions year after year. Time will tell.
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  #15  
Old 04-16-17, 10:49 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
Who said I was complaining? They can't be profitable at their current model. To be profitable, they must reduce the cut they pay to drivers. Likely the only way to accomplish this is through self-driving Uber vehicles, which they're clearly focusing on due to their acquisition of Otto and roll outs in test markets(as well as their largest investor saying as much.) Will it work, who knows?

Stating the reality of the business isn't "complaining" or "targeting" the poor drivers. Don't be so sensitive.
It's in quotes Stop deflecting.


How much money is Lyft losing ? You don't want to seem to touch that one - merely to sell your premise as the only option here
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  #16  
Old 04-16-17, 10:54 PM
cabezadecaballo cabezadecaballo is offline
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Originally Posted by Neopolitan View Post
I would say that's an incredibly naive view.



May very well be. On the other hand, you would have probably said the same about Amazon while they were bleeding billions year after year. Time will tell.
I hope this helps - http://ben-evans.com/benedictevans/2...d-why-it-works
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Old 04-16-17, 10:54 PM
Neopolitan Neopolitan is offline
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Originally Posted by cabezadecaballo View Post
How much money is Lyft losing ? You don't want to seem to touch that one - merely to sell your premise as the only option here
They lost $600 million on about $700 million in revenue. So an even worse ratio than Uber.

Wasn't dodging, just assumed you knew how to use Google.
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  #18  
Old 04-16-17, 10:55 PM
cabezadecaballo cabezadecaballo is offline
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They lost $600 million on about $700 million in revenue. So an even worse ratio than Uber.

Wasn't dodging,just assumed you knew how to use Google.
Didn't care enough to

see post above





big googlin'
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  #19  
Old 04-16-17, 10:57 PM
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Originally Posted by cabezadecaballo View Post
That's from 2014. Amazon is now consistently reporting profits.

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  #20  
Old 04-16-17, 11:20 PM
cabezadecaballo cabezadecaballo is offline
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That's from 2014. Amazon is now consistently reporting profits.

But yet it still worked when they did not.

They are putting more into their own brokered distribution network, too. If their one day delivery and "subscription" concepts take off, they will be hugely profitable.

Amazon has become a little shady on their site, though. I've noted that oft-purchased items pop up with impulse "buy it again" buttons. Looking further into current buying choices invariably reveals that when there are multiple sellers of a product, the Bezos-bot has selected the most expensive "Fulfillment by Amazon" seller name. Hell, all they have to do is change a seller name, and it could be coming from the same warehouse and out of the same production run. That's bad business.

But I digress. Amazon is far more complex than Uber.
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Old 04-16-17, 11:27 PM
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Originally Posted by cabezadecaballo View Post
Amazon has become a little shady on their site, though. I've noted that oft-purchased items pop up with impulse "buy it again" buttons. Looking further into current buying choices invariably reveals that when there are multiple sellers of a product, the Bezos-bot has selected the most expensive "Fulfillment by Amazon" seller name. Hell, all they have to do is change a seller name, and it could be coming from the same warehouse and out of the same production run. That's bad business.
Old people
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  #22  
Old 04-16-17, 11:37 PM
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Old people
go on.......
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  #23  
Old 04-16-17, 11:58 PM
Yappi Yappi is offline
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Originally Posted by Neopolitan View Post
I would say that's an incredibly naive view.
Bringing together two interested parties has been going on for decades on the internet. It's a rather simple process. Gaining market share is the difficulty.

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May very well be. On the other hand, you would have probably said the same about Amazon while they were bleeding billions year after year. Time will tell.
But Amazon hasn't really changed their core strength, selling items created by other companies. If they were transitioning into a manufacturer, it wouldn't have made sense either.

Personally, I hope Uber succeeds. I'm just afraid they are trying to bite off more than they can chew instead of becoming a better company at their core strength.
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