
Uber reportedly losing $2B per year, with passengers paying 41% of each ride - abduhl
http://www.bizjournals.com/sanfrancisco/news/2016/12/02/uber-losses.html
======
qwrusz
This another "article" that's really just rewriting someone else's blog post.

There was already a HN discussion based on a link to the original Naked
Capitalism blog post about Uber:
[https://news.ycombinator.com/item?id=13079023](https://news.ycombinator.com/item?id=13079023)

With that said, the actual financial analysis of Uber's numbers in the writeup
is so amateurish and frankly incorrect that I can't recommend anyone waste
time reading it. I'm not trying to defend Uber's valuation, but this person's
math is just wrong. Also the data is stale, just not worth it.

~~~
briffle
Some examples of how it's math is incorrect?

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temp
How is Uber meant to make money? Is the idea to push prices up once (and if)
the alternatives die?

~~~
byoung2
The biggest cost is labor, so if they could theoretically shift to self-
driving cars soon, fares would pay for more than 100% of ride cost. What that
timeframe is would be the $69 billion question. Given that self driving car
technology is in its infancy, and will likely require a driver to be ready to
take over, they can't ditch drivers anytime soon (unless they make passengers
serve as backup drivers?).

~~~
peteboyd
Let's say driverless cars happen in the next five to ten years. I see two
scenarios happening - neither do I need uber. First scenario is my local car
at my house becomes driverless. I can simply call my car to pick me up from
anywhere. It can return home and wait (or go and pick up others as it's own on
demand taxi). I now don't need uber at all - even though I use them now. So
that is not a good scenario.

Second scenario is I am traveling and need a car/taxi as my local car is at
home. If so, why would not other people in that city simply allow for their
cars to pick me up while they are not in use. Every driverless car is now a
taxi.

Basically all that is needed is an app and some service where owners subscribe
and let their cars be used as a taxi. Perhaps uber controls the app and
service as the dominant leader. But I bet there will be a lot of competition
in that area with car rental companies, manufacturers, local cab companies,
individuals and uber all competing.

I suppose the third scenario is that many people do not own a car in the
future and we just subscribe to a car service. Perhaps in that area uber is
the choice. But perhaps the manuacturers roll their own service too that you
subscribe for a time share of a car.

~~~
jpalomaki
Or could you actually get rid of your own car and ride only on Uber? Due to
it's scale, Uber might be able to offer competitive pricing.

If there is no driver involved the cost structure for you and Uber is pretty
much the same. Except Uber can probably negotiate better deals on new cars and
service (due to volume) and also achieve higher utilization. On the other
hand, Uber of course needs to make a profit.

~~~
prostoalex
> Uber can probably negotiate better deals on new cars and service (due to
> volume)

Same argument could be applied to car rental businesses (some of which are
owned by automakers which makes the relationship super-cozy), yet I've never
seen a deal from Avis or Hertz to make it a worthwhile replacement to owning.

Big cities have an added cost of parking and extra miles driven to find a gas
station or a public charger. But big cities also have low-cost public
transportation (or so I've heard, I live in LA).

In smaller towns the cost of ownership tends to be lower and with sub-$10,000
products on the market [http://jalopnik.com/5072303/new-pricing-
of-9990-makes-2009-n...](http://jalopnik.com/5072303/new-pricing-
of-9990-makes-2009-nissan-versa-cheapest-new-car-in-usa) you have a reliable
guaranteed ride whose cost is usually spread over 6-7 years.

~~~
IanCal
I actually find the cost of renting cars makes a decent amount of sense for
me, given how infrequently I use them. However, it's such a hassle, since I've
got to go quite out of the way to where they're kept and I can only return
them at inconvenient times (or I have to rent for two days because they're not
open at the weekend, for example).

Being able to book one to use for a journey then let it go home would be
great.

~~~
prostoalex
Yeah, agree on that. Some rental places don't mind delivering the car to you,
e.g.
[https://www.hertz.com/rentacar/productservice/index.jsp?targ...](https://www.hertz.com/rentacar/productservice/index.jsp?targetPage=HLEpickupservice.jsp)
and I vaguely remember some startup car rental place advertising just that.

Important to note that currently it's the Uber and Lyft drivers that are
subsidizing the cost of getting the car to you - they are not getting paid for
the miles driven. Whether or not this cost will be subsidized by Uber/Lyft in
the future remains to be seen.

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mcintyre1994
They came to my city recently, I've only used them here once - but this is the
only place I can directly compare them to a taxi for the same journey. They
were about 10% cheaper for that journey. If they kill taxis and need to break
even, we'll be paying over 2x as much then?

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kwhitefoot
If this is true then I expect the competition regulators in some countries to
start taking action. Such pricing is illegal in some areas because its only
reason for existence is to drive out the competition. For instance loss
leading in supermarkets in the UK.

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tga
What's an investment of a few billion, Uber is in for the long game.

You can to compare them to other big names in the transportation/logistics
industry, like Webvan
([https://en.wikipedia.org/wiki/Webvan](https://en.wikipedia.org/wiki/Webvan))

~~~
CPLX
That was moderately clever.

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Roritharr
They lose 6,6 shots at net-gain fusionpower per year.

~~~
pjc50
Why invest in a benefit to humanity with long-term capital returns when you
could buy a global monopoly on taxis?

/sarcasm

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presty
[https://twitter.com/EricNewcomer/status/804470167899996160](https://twitter.com/EricNewcomer/status/804470167899996160)

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chris_wot
Given their downright ethical behaviour, and utterly confused marketing do-
over, does anyone a. Really care, or b. feel surprised?

If you run your company in an ethically abhorrent way across the globe from
the get-go, is it any wonder you eventualy will go belly up?

~~~
wolfgke
Every day you (and other people) vote with their wallet which company is
getting their money. So simply vote against Uber and inspire lots of people to
do so, too, if this is your opinion.

~~~
chris_wot
I've never used them and will continue to never use them :-)

~~~
wolfgke
> I've never used them and will continue to never use them :-)

... and convinced your surroundings to never use them? ;-)

~~~
chris_wot
Pretty much. I've shown the things they do with customer data and many of my
friends and colleagues have decided to stick with taxis.

HTH.

