
Uber loses $2.9B, offloads bike and scooter business - finphil
https://techxplore.com/news/2020-05-uber-billion-offloads-bike-scooter.html
======
deminature
"Net loss attributable to Uber Technologies, Inc. of $2.9 billion, which
includes $277 million in stock-based compensation expense and pre-tax
impairment write-downs of $2.1 billion. Net loss attributable to Uber
Technologies, Inc. excluding the impairment write-downs, net of the tax
benefit would have been $1.1 billion."

So a loss of $1.1bn is an improvement on $1.4 last quarter, not including
write-downs associated with investments in Didi and Grab. This explains why
the stock went up not down after earnings.

>[https://www.marketwatch.com/press-release/uber-plows-
forward...](https://www.marketwatch.com/press-release/uber-plows-forward-
despite-loss-2020-05-08)

~~~
clairity
you shouldn't ignore impairment. it's a place to stuff a bunch of bad
decisions, and an amorphous bucket where value can be plausibly inflated and
deflated to control the performance story of a company (i.e., where fraud can
happen).

~~~
valuearb
This is all true, but it can also be a place to acknowledge the bad decisions
Kalinack made.

When you have a grab bag collection of growth businesses like Uber, the
important question is whether the core business can be profitable, and to that
end you need to exclude the failures of the non core businesses.

~~~
lumost
isn't uber still priced as if they had grown to be a profitable business
across _all_ of their growth businesses? I have a hard time understanding the
valuation of Uber given any negative indications on any of their businesses.

------
martythemaniak
First, they were gonna make the jump to be an autonomous robotaxi service, but
that's going nowhere fast.

Then they were going to be mobility service - cars, bikes, scooters,
everything would go through them. But no more.

So what are they going to be now? Just milk their taxi service until Waymo,
Tesla or whoever comes and wipes them off the market? Honestly, what are their
long-term prospects? I've been staying away from Uber stock because they have
a market cap of 50B. They're not going to be paying dividends, so what's going
to make them be a 100-200B company?

~~~
gffrd
This is what I want to know.

Ridesharing fares are obviously underpriced … and if they were raised 30% to
make them sustainable, it becomes "not worth it" for a good chunk of people
who use ridesharing as a supplement to car, bus, transit, etc.

I assume the strategy is a long-play to have people + communities become
wholly dependent on your services (they skip buying cars, skip learning to
drive, transit fails to evolve further), then once they are, ratchet up the
prices? It's just that you have to clear that point first, otherwise :pile of
burning cash emoji:

~~~
subsubzero
I think Uber is a lost cause, sorry to say but the food delivery business
cannot be profitable for a majority of customers to where they will still pay
for takeout. Their ATS service(self driving cars etc) was using stolen
technology from waymo, now they are forced to using their own technologies
they are way behind waymo, aurora, nuro, etc. Even ride hailing which is
supposed to be their bread and butter is losing money, trying to up the ride
costs and expect a huge drop in riders. Lastly Covid-19 joined the party,
nobody wants to ride in a strangers car who could be infected (or visa-versa).
This mindset of fear of the virus could take a year or so to subside, by then
how much money will they have burnt?

~~~
valuearb
Ride hailing wasn’t losing money.

~~~
sceptical
Not only was it not losing money. It was actually quite profitable pre-covid.

------
okareaman
Uber has another problem I haven't seen mentioned. Many drivers have quit (for
fear of getting sick I presume.) I know this because I drive for them (I like
it) and the number of long drives to do a pickup for a short ride is way up,
indicating there are no drivers nearby. I'm not going to drive 25 minutes to
make $5, so I decline and the customer doesn't get a ride, I assume. If Uber
wants drivers to come back they need to do more for driver safety. A really
high quality mask would be a start.

------
xiaolingxiao
Could someone w/ an understanding of accounting add to this report? Uber is
"offloading" bike/scooter business to Lime, but also making an investment in
Lime... is this just a way to hide losses? Essentially paying Lime to take the
red off Uber's balance sheet, while maintaining an option in the micromobility
market?

~~~
rossdavidh
IANAAccountant, but I think the investment was in the past, and this
announcement is that they are ditching the investment. But I could be reading
that wrong.

~~~
blackswan101
[https://www.bloomberg.com/news/articles/2020-05-07/uber-
lead...](https://www.bloomberg.com/news/articles/2020-05-07/uber-
leads-170-million-investment-into-lime-electric-scooters)

------
autokad
I feel sorry of what happened to Jump. They had a good product, but Uber
bought them and now when they wanted to make their income look pretty while
'protecting their lime investment', they gutted Jump and handed the carcass to
lime.

------
warent
Can anyone explain why Lyft is not experiencing the same pain? I've always
used them over Uber (not an investor in either, just a customer) and now as
much as ever Lyft just seems to be a smarter, more mature company.

~~~
SilasX
I thought Lyft's pain was pretty similar. They had about the same percentage
layoffs:

[https://news.ycombinator.com/item?id=23020812](https://news.ycombinator.com/item?id=23020812)

And reduced internship salaries:

[https://news.ycombinator.com/item?id=23047687](https://news.ycombinator.com/item?id=23047687)

Although from searching the recent news it does look like they've seen some
good news as well, like a share price rally after the Q1 report:

[https://news.ycombinator.com/item?id=23095844](https://news.ycombinator.com/item?id=23095844)

So Lyft got hit hard, but probably less so because they have fewer quixotic
sub-ventures than Uber.

~~~
warent
I missed these. Thank you!

------
klmadfejno
> The challenges are continuing in the second quarter. In April, rides were
> down 80% globally compared to last year, Khosrowshahi said. But rides have
> been increasing for the past three weeks and bookings in large cities across
> Georgia and Texas, two states that started re-opening, are up 43% and 50%
> respectively from their lowest points, he said.

This isn't exactly what he said, but 1 * (1-0.80) * 1.43 is... -72% from the
original.

~~~
MengerSponge
I mean, an 80% loss isn't good, but a 400% gain is pretty excellent. Growth
like that is how you get to the moon!

~~~
klmadfejno
Where is 400% coming from?

~~~
bmm6o
The joke is if you drop 80% and later increase 400%, you're back where you
started.

------
romwell
Best of luck to anyone working for Uber in these times.

------
Ericson2314
I'd rather rent a bike or scooter right now than get in a stranger's car. I
don't get it.

~~~
jeffbee
Yes, but how much will you pay? Bike rental like Jump or Lyft hasn't ever been
profitable, nor should it be. It should be viewed by cities as a way to manage
their street capacity, and like bus service, should not be expected to be
internally profitable. This was the model of Motivate (Citibike, Bay Area Bike
Share) before Lyft acquired them.

~~~
Ericson2314
I agree completely to that principle.

I guess read what I wrote as for-profit car rental sounds stupider than for-
profit bike rental in these times. Still a weird call for Uber which must lie
to itself about the potential for profit.

------
camjohnson26
I doubt many of Uber’s casual users understand how insanely unprofitable the
current business model is. 2.9 billion is 3 unicorns. Even before COVID
they’ve been losing something on the order of a billion a year.

It’ll be interesting to see if they can turn this around.

~~~
gberger
> 2.9 billion is 3 unicorns.

Hmm, unicorns are usually defined by $1B valuation, while the number of $2.9B
in loss is related to revenue. So I think the comparison doesn't hold, it's
apples to oranges.

~~~
lucasmullens
Seems like a fair comparison, they could have acquired 3 unicorn companies
with that money.

~~~
FabHK
Per year.

(Comparisons involving both stock and flow measures are somewhat dodgy, but
they’re made all the time (debt/GDP, annual rent/house price,
unicorns/revenue)).

Edit to add: they’re not really dodgy per se, but the result is a rate, ie has
a time dimension.

------
thrower123
Didn't they just buy another scooter company days ago?

~~~
TaylorGood
I read that same headline yesterday: Uber leads $170 million investment in
scooter company Lime. Wtf?

[https://www.cnbc.com/2020/05/07/uber-leads-170-million-
inves...](https://www.cnbc.com/2020/05/07/uber-leads-170-million-investment-
in-scooter-company-lime.html)

------
linuxftw
The problem with the bike and scooter rental businesses is they're unable to
offload the maintenance burden to someone else like the car business.

Uber thought it was a good transportation business. It was wrong. It's a good
market maker, and a good middle-man.

Ebay? Middle-man. All retailers? Middle-man. Pay Pal? Middle-man.

Find out how to be the middle-man.

------
diogenescynic
I wonder what will happen with all their e-bikes? I wonder if they will resell
them?

------
troughway
Uber never had $2.9B to lose.

~~~
suyash
The article says "Uber brought in $3.54 billion in revenue in the first
quarter, up 14% from the same time last year." so they did and more than last
year before incurring loss.

