
This is my last story about Travis Kalanick - ptrptr
https://pando.com/2017/06/21/my-last-story-about-travis-kalanick/cc176839797ae23c2b36d79e863d70c392056e9b/
======
leroy_masochist
On the one hand, Sarah Lacy's reporting on Uber has been the gold standard in
terms of her paying attention to specific events and their significance, and
explaining it all to readers -- especially with regard to ongoing litigation.

On the other, it seems like she has developed a persecution complex with
regard to Uber; since Nov 2014, every article I've read of hers that covers
Uber (I'm a Pando subscriber) has at least partially been about her and her
relationship with the company. Yes, the fact that Emil Michael casually
floated the idea of doing oppo research on her / her family _to her face_ is
really fucked up. However, to say she's taken that ball and run with it would
be an understatement. I do hope that this is actually her last Kalanick-
related story (doubt that will turn out to be the case), because she's a great
journalist who is tremendously good at sniffing out what's really going on,
and she should be training her sights on a more diverse target set.

~~~
throwaway40483
Just to be clear. Emil Michael never floated the idea about doing oppo
research to her face. This was done during a gathering with some journalists
where Ben Smith from Buzzfeed was present and reported on it:

"Michael at no point suggested that Uber has actually hired opposition
researchers, or that it plans to. He cast it as something that would make
sense, that the company would be justified in doing."

[https://www.buzzfeed.com/bensmith/uber-executive-suggests-
di...](https://www.buzzfeed.com/bensmith/uber-executive-suggests-digging-up-
dirt-on-journalists)

~~~
Upvoter33
Saying something "would make sense" could easily be construed as a threat.

------
repomies691
"By my math, Uber’s true value puts it as number four in the global market,
behind Didi Chuxing, Waymo, and Tesla, who will become a future competitor
should Uber make it to the autonomous future."

Somehow I lost my interest to read further after this phrase. To me the
comparison mostly doesn't make sense. I've been Uber customer for couple of
years now, and I have to say for some parts Uber, as a service, has
tremendously improved my life. These other companies seem to offer quite
different products/services or are in whole different markets (Didi is only
China AFAIK, while Uber works globally).

~~~
monkeyprojects
It depends on the market you look at.

At the moment uber is very useful (heck in the past fortnight I have used it
in Bangalore, Helsinki and Vienna) but it does have a serious weakness - Uber
competes on price but there is no evidence that it is profitable nor (far more
worryingly) that it knows how it can make itself profitable.

Hence it's issue is very much similar to twitter - uber in many countries owns
the sector, it just hasn't been able to find a means to make a profit from the
sector.

~~~
5thaccount
> there is no evidence that it is profitable nor (far more worryingly) that it
> knows how it can make itself profitable.

I'm sorry what? I keep reading these sorts of sentiments, but they sound, and
I know this is insulting, they sound like people who don't understand business
in even the 101 sense.

As long as the margin per sale is greater than the cost of that sale, it is
possible for a business to be profitable one day. Given Uber charge a percent
per ride, they definitely have a workable margin (which not all startups do
BTW, e.g. many of the food startups like Bento
[https://gimletmedia.com/episode/kitchen-confidential-
season-...](https://gimletmedia.com/episode/kitchen-confidential-
season-3-episode-6/)).

The question, for a growing business with money in the bank, is are we growing
revenue FASTER than we are growing costs. As long as you are, then inevitably,
the two lines will intersect at some point.
[http://4.bp.blogspot.com/-Yv7OoVt_q0I/UHcx99N5I5I/AAAAAAAAAZ...](http://4.bp.blogspot.com/-Yv7OoVt_q0I/UHcx99N5I5I/AAAAAAAAAZ0/B1b7NGVczDM/s1600/Curve.png)
is the sort of graph Uber needs.

So the questions right now for Uber are: at what scale (aka total revenue)
does Uber BECOME profitable with its current cost structure? How soon can Uber
reach that date? And is Uber's runway long enough to get there?

I have no idea of any of these numbers, but
[http://uk.businessinsider.com/uber-leaked-finances-
accounts-...](http://uk.businessinsider.com/uber-leaked-finances-accounts-
revenues-profits-2017-2?r=US&IR=T) has some "leaked" numbers. Seems in Q3 2016
they spent $2.5B and made $1.7B, so they would need to either grow by about
50% with zero cost growth, or cut about 32% of the costs to be profitable. Is
that doable? How the F would I know? But I doubt that $2.5B includes many must
have costs, like servers, developers and offices, and includes a F-ton of
advertising and other incentives all of which are easy-ish to cut.

Lets use these numbers as examples:

* Costs: $2.5B * Margin: $1.7B * Monthly Costs Growth: 2% * Monthly Revenue Growth: 5%

If that is the case, Uber are 15 months from profitable.

That's the insane maths of startups: Revenue growth % > Costs Growth % =
success.

And what about costs? If I were a betting man, I'd wager most of Uber's costs
are things they could cut - advertising, non-essential staff, Given their
revenue seems to growing rather well, I see no reason why there isn't a time
horizon where Uber is inevitably profitable. Whether Uber has enough runway,
and whether they can raise more cash, I have no idea.

Lastly, I find the idea that is floating about that Uber are subsidizing fares
a really odd one. I think Uber are subsidizing things. Uber subsidize.
development. Uber are also subsidizing the legal battle in certain markets, by
paying for cases that will inevitably help competitors. Heck, Uber is even be
subsidizing some drivers in some markets (my NYC driver told me they have some
finance scheme in place to help new drivers purchase/lease cars). But
subsidizing fares? They take a 20% cut, that is no subsidy!

Whether 20% is enough of a cut, and visa versa whether the fees are high
enough that a 20% cut is enough raw revenue I don't know. Ditto I don't know
whether Uber's runway is long enough, or if they can extend it with more
funding. What I do know is all this writing Uber off doesn't seem to track
with what seems to me a very sensible "build a moat by being the biggest while
growing revenue faster than costs" strategy.

~~~
monkeyprojects
So a business that requires bulk advertising to recruit both drivers and
riders (in the U.K. Driver recruitment is one of the most common radio adverts
on commercial stations) could survive without advertising..

Given that I saw my first tv advert for uber last weekend (focused on rider
recruitment) I suspect that instead of cutting advertising costs uber will
have no choice but to continually increase them over the years

------
jasode
_> If I were Uber’s new CEO, I would embrace this reality. I would do a round
that recaps the company immediately. Issue new stock to employees. Start at a
clean and reasonable slate. Reset expectations and redefine what a successful
IPO would be. Take the hit now, rather than having it continue to hang over
this company until the end of time._

The new CEO presumably won't be a co-founder with significant voting power
like Garrett Camp. He/she will more likely be a "hired gun." Therefore, the
next chief won't have the power to issue new stock and force every investor to
suffer an early haircut. Even if the board of directors (Kalinick, Camp, TPG,
Huffington, etc) agree to award some equity (1%?) as incentive to attract a
new CEO, he/she still won't control enough of the company to make those
decisions.

If we argue that a good CEO would convince those investors/BofD to take the
financial hit, then we're still back to the decision the next CEO doesn't
control: why would the BofD hire a CEO that tells them to immediately reduce
their financial stake instead of concentrating on cleaning up Uber and growing
the value so they never had to consider haircuts in the first place?

------
ckastner
The article is somewhat long-winded and covers a number of issues, but I
couldn't agree more in its conclusion as to what kind of CEO Uber now needs,
and what kind of hurdle he is facing:

 _A boring, operations wizard. Uber is a logistics company that needs an
operational wizard, not a product visionary. The bad news for Uber investors
is that losing Kalanick creates a massive vacuum of power and resetting this
toxic culture will be all but impossible for anyone. [...]_

 _Uber does not need a product visionary. (Guarantee no other Valley insider
will have that hot take…) It needs an operational, logistical genius. It needs
a brand person. It needs a showman._

------
clevergadget
I generally agree with the sentiment - except where it calls Arianna
Huffington 'Travis-lite' -[https://github.com/henrikhodne/travis-
lite](https://github.com/henrikhodne/travis-lite)

------
a2tech
That wasn't a story, it was a ton of words on who won't be the new CEO of Uber
and complaints about their board.

~~~
dswalter
Almost nobody has been paying as close attention to Uber and Travis Kalanick's
goings-on as Sarah Lacy. This makes her "ton of words" a valuable addition to
the national dialogue discussing the ramifications of his ouster.

~~~
monkeyprojects
I have joked to Sarah in the past that she has to be careful that pando didn't
become "what the fuck has uber done today".

Mind you that isn't surprising given the continual behavior issues within uber
and it's status as the biggest unicorn

------
petraeus
Uber is dead in 5 years, maybe 10 if they (and they will) complete a few more
rounds of funding.

------
baitbiter
More nonsense for clicks and fame

~~~
surfrider
I have not followed this story one bit, but that's exactly what I thought from
just the first paragraph. Its like TMZ for the tech world.

