
Uber CEO calls business 'sustainable' amid huge losses - RustyBucket
https://edition.cnn.com/2019/09/25/tech/uber-dara-khosrowshahi-amanpour/index.html
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AdmiralAsshat
Realistically, what else could we have expected him to say?

"Nope, the company is pretty much fucked. I'm out of here as soon as I
negotiate a large enough golden parachute."

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mikeryan
Its interesting seeing this current trend of "Unicorns" (WeWork, Uber & Lyft)
relentlessly pushed to quickly to grow and expand that they're getting pushed
far past the bounds of a sustainable business.

Is this VC/Industry pressure that needs to be dialed back?

~~~
benologist
Yes. You can tell because in addition to their lines of business they have
these massive cash sinks tinkering away on random stuff. Why does Uber need to
hire people to write a tool to eliminate null pointer exceptions in Java?
There really might be a sustainable business - but it won't be doing most of
this stuff:

[https://uber.github.io](https://uber.github.io)

[https://lyft.github.io](https://lyft.github.io)

~~~
mandevil
I have been in companies that open-sourced small bits like this. Basically, it
worked like this: someone came up with a cool tool that helped them (in this
particular case, likely finding NPE's in their Android app). Then others heard
about it and started to use it. Once the use spread a bit, the developer who
built it tried to clean up the code and document it better and make it easy
for others within the company to use, and then someone said "let's open source
this" because that way it looks great for the company ('see, we're giving
back, we're cool- more developers will want to work here') and the original
engineer (who now has a open source project on his resume, also probably gets
to go to a conference and give a talk on it, which the company will gladly pay
for because it makes them look cooler and attract more developers). The LoE
once you've built the tool is pretty small, and 'finding things that were
causing crashes in our Android app' clearly has a direct bottom line impact on
Uber.

But it isn't the crown jewels of the company: their data, their scheduling
algorithms, anything like that, its little side projects. (Some companies do
open-source the crown jewels and make their money on support contracts, but
that's a totally different business model; outside of Red Hat I'm not sure how
sustainable such businesses are.)

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londons_explore
Uber _could_ easily make a profit.

They could double their fares, and fire 90% of their engineers, and for a
quarter or two, they'd make insane profits before the public flocked to other
platforms and a lack of product innovation killed them.

Think AOL. They still have a lot of dialup customers, and still make profit
from them.

~~~
PopeDotNinja
Price elasticity is a thing. I wouldn't pay double.

~~~
londons_explore
You might pay double for a while until you got round to finding and signing up
for a new app.

And in many places, Uber is a monopoly - it would take months for other apps
to launch and scale.

~~~
derision
Almost every I know has both Uber and Lyft, will check both and pick whichever
is cheapest at the moment

~~~
Keats
Lyft doesn't exist outside of the US.

~~~
whenchamenia
But other services do, or will.

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abrichr
Once the VC money dries up, I think it's likely that drivers and passengers
will still want an app to facilitate the transaction. I've seen it suggested
before that such an app could allow both parties to negotiate the rate between
them.

Does such an app already exist? If so, why isn't it more popular? If not, why
not?

~~~
richk449
Interesting suggestion. It is sometimes said that Uber was started based on
Kalanick's Randian free market ideas. And at a superficial level, it sorta
looks free market - the price responds to supply and demand for instance. But
interestingly, that price is being set by, effectively, a central planning
process, not a free market. The soviet union didn't have the computing power
to pull that off, but Uber does.

Of course, there is all of the regulatory capture and monopoly tactics which
are also inconsistent with free markets, although perhaps not inconsistent
with Objectivism (depending on your view).

A true free market version of uber would be interesting.

~~~
mcphage
> It is sometimes said that Uber was started based on Kalanick's Randian free
> market ideas. And at a superficial level, it sorta looks free market - the
> price responds to supply and demand for instance.

If you need to pump billions of dollars into the market every few months, it's
definitely not free.

~~~
koolba
If the money is coming from the private sector and not the government then it
is free.

~~~
mcphage
It's coming from outside the market.

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ohduran
Imagine the guy up there, screaming "This is hopeless, there's no way we are
EVER going to make any money!!"

So yeah, he's supposed to say that. It's as if he didn't say anything.

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RandomInteger4
How? Like, surely their servers don't cost $5B every 3 months, right? Where is
this money going?

~~~
apocalyptic0n3
They laid off 400 marketing employees in July[1], out of 1200 total. If you
assume an average salary of $75k (not sure how accurate that is; just the
average in my non-CA market per Google) and a cost to Uber of 1.3-1.4x that
(so ~$100k), that cut $13M every 3 months (of ~$40M for the team total).
That's just payroll for 1 team and they employ 22k employees worldwide and 11k
in the US. It's not difficult to see them spending $5B every 3 months.

1: [https://www.cnbc.com/2019/07/29/uber-cuts-about-400-jobs-
fro...](https://www.cnbc.com/2019/07/29/uber-cuts-about-400-jobs-from-its-
marketing-team.html)

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bitwize
Dara Khosrowshahi right now: [https://cdn.vox-
cdn.com/uploads/chorus_image/image/49493993/...](https://cdn.vox-
cdn.com/uploads/chorus_image/image/49493993/this-is-fine.0.jpg)

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simonblack
The Uber CEO's business is 'sustainable'.

The Uber investors and drivers? Not so much.

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onetimemanytime
otherwise he would have resigned. So he chose to keep going, until....

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rpmisms
Maybe, just maybe, Uber could become employee owned.

~~~
strathmeyer
hint: with driverless cars they don't need employees

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chrshawkes
Yeah because that technology is right around the corner...

~~~
strathmeyer
I guess Hacker News is now just filled with people who think they are smarter
than large companies.

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svisfucked
Some will blame the upcoming recession on trump. It’ll actually be caused by
another Silicon Valley bubble. They’ve run out of cheap money and now the
hobby investors are refusing to take the bait.

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woeirua
Sure, Uber will be sustainable, but only when the price of each ride increases
to the point where Taxis are price competitive again. At which point, why
would people use an Uber, when they can use a taxi at the same price?

There are benefits to Ubers, but 90% of people I know only use them because
they are cheaper than a taxi.

~~~
overcast
Software, and the ease of getting one. If I want a taxi, I have to google for
local taxis, call and hope they pick up, talk to someone who seemingly is
always pissed about answering the phone, be lucky enough to speak to someone
who I can understand, hope they actually show up, THEN deal with payment that
is never available in the cab, and wait while they call in your credit card
number to home base. It's a terrible experience.

