
One-quarter of Uber's business happens in just five cities - smacktoward
https://slate.com/business/2019/04/uber-ipo-nyc-london-risks.html
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scarmig
2017 GDP Figures (Trillions USD)

    
    
      USA: 19.39
      NYC: 1.72
      LAX: 1.04
      CHI: 0.68
      DFW: 0.54
      DCA: 0.53
    

OMG, almost a quarter of the US's GDP (23%) comes from just five metropolitan
areas!

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ggm
DCA is surely about something other than real productive activity? (I guess
people in DC might be making money, I thought they were spending it)

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mandevil
The Washington DC MSA is, by population, the 6th largest MSA in the United
States[1]. It also the 2nd most highly educated MSA in the US, by some
measures[2]. The top three- and four of the top 6- richest counties in the
country are part of the Washington DC MSA[3].

Given (2) and (3), the fact that it produces more than the fifth largest MSA
by population in the country (Houston) should not surprise. The top four MSA's
by population and by GDP are the same, in the same order- the one that is
truly punching above its weight is the Bay Area, which is the 6th largest by
GDP but the 12th by population.[4]

[1]:
[https://en.wikipedia.org/wiki/List_of_metropolitan_statistic...](https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas)
[2]: [https://www.cnbc.com/2018/07/26/the-10-most-and-least-
educat...](https://www.cnbc.com/2018/07/26/the-10-most-and-least-educated-
cities-in-the-united-states.html) [3]:
[https://en.wikipedia.org/wiki/List_of_highest-
income_countie...](https://en.wikipedia.org/wiki/List_of_highest-
income_counties_in_the_United_States) [4]:
[https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_area...](https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_areas_by_GDP)

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ggm
TIL. Thanks! I wondered if it was IPR income declared in the DC area but
activity elsewhere but it looks like things happen beyond lobbying and CEO
decision making there. I've only ever dealt with NFPs In the beltway.

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voldacar
How is this a vulnerability? Shouldn't one expect something like a Pareto
distribution to emerge here anyways?

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blakesterz
The last line in the article answers that pretty well:

"One thing the filing makes clear: It wouldn’t take a global movement to
stress the company’s business model. A couple big-city mayors could do that
all on their own. "

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kevin_thibedeau
Their business model is unconstrained growth to funnel money into side
projects. That can't persist forever. If they just stuck to their core
business they could easily be profitable as taxi 2.0.

~~~
pwinnski
Is the net cost of these "side projects" greater than the $1.8B Uber is
losing? I'm missing that in the S-1 if so.

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freehunter
What I'm interested in out of this information (but not interested enough to
look it up myself): These five cities account for 1/4 of their business, but
how does the population of these five cities compare to all of the cities they
do business in? Is this just a straight-line distribution?

Basically, do these five cities account for 1/4 of the total population of the
cities they do business in?

~~~
mandevil
According to
[https://en.wikipedia.org/wiki/List_of_urban_areas_by_populat...](https://en.wikipedia.org/wiki/List_of_urban_areas_by_population)
Tokyo and Seoul (not on the top five Uber list but have Uber presence) are
both larger than any city on Uber's top 5 list. Sao Paulo (on Ubers list) is
just barely larger than Mexico City (not on the list). Los Angeles (18th
largest urban area by population) and London (35th largest urban area by
population) are significantly smaller, and the Bay Area is all the way down at
61st, right behind Dallas-Fort Worth (not on Uber's list).

So no, those five cities do not make up a disproportionate amount of the total
urban population that Uber covers, just a disproportionate amount of the
riders.

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forkLding
Looking at this another way, this one-quarter revenue coming from users in
five cities probably is showing these users as the power users of the app so
these are probably the least likely to suddenly give up Uber because they
already have a habit and Uber is already such a big part of their life.

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mc32
NYC has definitely always had a taxi "habit" despite their transit. I think
London is similar. On the other hand Tokyo (which has one of the best transit
systems) has lots if taxis as well, but I guess Über hasn't had much traction
compared to local taxis (they've always been clean and offered good service).

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samsonradu
About 3 years ago I've had issues multiple times in Tokyo with taxi drivers
not speaking english at all, thus not being able to communicate the
destination. I assume Uber would smooth over that aspect as there is literally
no need for communication.

~~~
mc32
I don't doubt that, but foreigners who don't speak some Japanese is a real
small percentage of the people who use taxi services. If this were a general
problem, then I think Über would likely do better in a place like Tokyo.

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Grue3
Uber is not allowed to compete in Tokyo. When you use Uber, it just calls a
normal licensed taxi. The advantage is presumably the fact that it shows your
destination to the driver without you having to explain it, but for locals
there's literally no advantage.

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olliej
Alternatively: one quarter of Uber's annual losses come from those cities :D

More seriously: if they increased the cost or reduce pay rate in just those
cities they could have a significant profit impact while not impacting market
acquisition in the rest of the world.

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brianzelip
1\. New York

2\. Los Angeles

3\. San Francisco

4\. London

5\. São Paulo

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ariwilson
How did you get that ordering? LA is listed first in the S1.

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dalfonso
Not OP, but that’s the order presented in the article.

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bifrost
Why is this a surprise? Its part of the reason it was even invented in the
first place...

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anateus
Looking at that list, the biggest threat to Uber is good (and not overcrowded)
public transportation.

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kaycebasques
Why are these 5 cities Uber’s top markets? Particularly Sao Paolo.

