
Uber Is a Scam - kome
https://www.jacobinmag.com/2019/05/uber-ipo-profitability-value-labor-costs
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austenallred
This is kindergarten-level financial analysis from a socialist magazine. All
this to say that Uber is losing money right now - we already knew that. Then a
bunch of other random stories of other companies that have lost money in the
past, including, well, some of the biggest and most successful companies on
earth.

The question is will revenue overtake costs as it grows more quickly - no
serious analyst would insinuate Uber will be gross margin unprofitable over
the long-term. It would be awfully difficult to do so given they collect a
percentage of every sale.

Uber has opened offices all over and has high fixed costs. It’s waiting on the
small variable revenue from each trip to catch up with those costs, and the
question is “will it?” That’s all.

~~~
lmm
> The question is will revenue overtake costs as it grows more quickly - no
> serious analyst would insinuate Uber will be gross margin unprofitable over
> the long-term.

How much room do they have to grow? Uber is already a, what, multi-billion-
dollar company? If they're not gross margin profitable now, where's the
tipping point?

> Uber has opened offices all over and has high fixed costs. It’s waiting on
> the small variable revenue from each trip to catch up with those costs, and
> the question is “will it?” That’s all.

What's the high fixed cost? App development surely can't cost _that_ much.
Drivers, server hosting, support, lawsuits etc. are all going to be variable
cost.

~~~
ForHackernews
Uber is almost the quintessential example of that old chestnut: _Sure, we lose
money on every sale, but we 'll make it up in volume!_

~~~
austenallred
Except they don’t lose money on every sale...

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olliej
I can't work out how uber can continue to operate post-IPO. Currently it
operates by converting VC funding into discounted transport.

Post-IPO I don't understand how it can gain ongoing sources of cash it needs
while operating at a loss (unless of course the IPO raises enough cash
immediately to fund it until after it has autonomous cars).

~~~
rorykoehler
I don't see how autonomous cars will save them. They don't build cars

~~~
rusticpenn
The want to replace drivers, not cars..

~~~
rorykoehler
All car manufacturers will do both once SDC tech is commoditised which will
happen almost immediately

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pkalinowski
How is it a scam? I'm using it and I'm not being scammed. Drivers are getting
paid, they are not being scammed.

Investors know it's not profitable and operating at loss, yet they keep
investing.

Uber is not lying and report their numbers accurately. They don't report
unflattering numbers, which is telling, but still - it's not scam.

~~~
simonblack
_Investors know it 's not profitable and operating at loss, yet they keep
investing._

Otherwise known as "There's one born every minute."

Uber (and Lyft, et al.) are in competition with traditional taxis. There's a
good reason taxis are more expensive, which is that taxis have to break even,
at the bare minimum. If Uber charged what the service costs, there would be no
difference in costs to the consumer between using a taxi or calling a Uber.
It's the dumb investors which are making up that difference. They won't be
dumb forever.

