
Uber Posts $5.2B Loss and Slowest Ever Growth Rate - jumelles
https://www.nytimes.com/2019/08/08/technology/uber-earnings.html
======
rainyMammoth
Uber and lyft are both on the way down. The price at which they need to
operate to be profitable is not a price that most americans are ready to pay.
As simple as that.

For now they delay this reality by subsidizing rides in order to generate
business. In some cities like San Francisco, most incentives were removed and
among my friends we all stopped using Uber (unless we really have to). It
simply became way too expensive.

(Comment that I already issued yesterday on a similar thread)

~~~
standardUser
The difference between taxi fares and Uber/Lyft fares has all but vanished.
People were willing to pay taxi rates all along, now they are doing so and
getting what is arguably a much better service.

~~~
hn_throwaway_99
> People were willing to pay taxi rates all along

Baloney. The market size of people willing to pay taxi rates for
transportation is _much_ smaller that the market sizes currently implied by
Uber and Lyft's valuation. Before Uber and Lyft, most people I know would only
take taxis very occasionally, for special occasions or emergencies. Once Uber
and Lyft started offering such good rates they would use ride sharing much
more often.

~~~
TuringNYC
Consider pool rides -- which were never part of the traditional offerings.
Pool rides from Uber/Lyft lowered cost while expanding the market.

Consider all the places where you needed a taxi but wouldnt know how to hail
one -- Uber/Lyft expanded the market here.

I was recently in Taiwan and needed a ride, but could not describe the address
to a driver who did not speak English. Uber to the rescue -- again the market
got expanded.

It isnt all about cost.

~~~
Scoundreller
Uber/Lyft are also great when you can expense your trips.

Not having to deal with (local) cash or a constantly “broken” credit card
machine are also pluses.

~~~
nradov
Uber and Lyft can now feed receipts directly into corporate expense reporting
systems which is a major time saver for frequent business travelers.

~~~
inferiorhuman
I found that if I used my corp card, transit stuff was automatically
categorized just fine.

~~~
Scoundreller
It’s getting your taxi driver to take your card in the first place that can be
an issue. I guess they’re high risk merchants and pay high rates?

Then you may require the actual receipt for your expense. Sometimes the Corp
wants more than a credit card invoice for their accounting.

~~~
inferiorhuman
_It’s getting your taxi driver to take your card in the first place that can
be an issue. I guess they’re high risk merchants and pay high rates?_

The only place I've seen acceptance be a problem is San Francisco (although
I've certainly heard it's a problem in other American cities). I can't speak
to other cities but in San Francisco the cabbies are required to pay pretty
hefty fees for credit card usage. But Uber and Lyft take a big chunk of the
pie and leave no cash option so there's that.

I've been to a couple cities where credit cards were not accepted as a general
rule (cabbies didn't even have the equipment). But in cities where I've used a
card I've asked and generally been told they'd never do anything that
ridiculous. Of course I typically have a strong preference for public transit
so cab rides are the exception rather than the rule for me.

As for accounting, merchants already get a category assigned to them by their
credit card processor. Generally there's enough specificity that something
like a few cab rides shouldn't need much more clarification (although receipts
may be required if you cross a threshold or exhibit some suspicious pattern).

------
munk-a
Uber emerged into the market as a disruptor in the absolute worst sense of the
world - it was challenging an entrenched industry with low efficiency (cab
companies make ungodly amounts of money in some markets) but it did so by
playing by a different set of rules - skirting both the disingenuous
regulations put in to protect cab companies' profit and those in place for the
safety of the general public. Even disregarding all of the legion HR issues at
that company their business model depended on not playing fair and they're
paying for it.

I like to compare them to the car sharing companies (like zipcar/car2go
etc...) which managed to de-throne the entrenched rental agencies without
going out of their way to break laws.

~~~
lacker
You are missing the part where Uber let you get a cab through an app rather
than hoping a taxi was driving by and waving your hands at them. It really is
a far, far better product when you can get a cab wherever you want, instead of
just in a few areas.

~~~
xyzzyz
Did you know that in most places where cab are operating, you could order a
cab to pick you up at your house by calling a cab company and talking to the
operator? Flagging down a cab as it drives by is a New York City thing.

~~~
colinmhayes
That system was incredibly awful.I don't believe there is a single person who
used that system and was happy with it.

~~~
Areading314
Right. Typical experience would be, call number, if you're lucky, someone
picks up. If you're lucky, they can understand enough for you to order a cab.
And then, if you're lucky the cab will actually wait for you rather than pick
up some other random fare instead

------
coldtea
Glad they're down, and hope the whole "gig economy" burns down too.

Where gig economy = padding the loss of decent jobs by replacing the bottom
end with desperate deals where "non employed" employees, without regular
salary, benefits, company provided work tools, etc., make a pittance, while
the organizing company gets a cut from millions of transactions.

In some cases, no jobs is better than subsistence/dead-end/exploitative jobs.
At least the former makes the problem evident, and ups the pressure to do
something about it on a society/policy/economy level -- as opposed to helping
perpetuate it.

~~~
xster
I think this is what worries me about the "mainstream" debate that might be
incorrectly framing the whole problem altogether.

Here, the rise of the gig economy came from automation. Not in the caricature
sense that there are robot automatons that serve your plates in a restaurant,
but in a sense that scalable automated processes replaced human dispatchers
that answers your phone calls at the taxi companies and radios drivers to pick
you up, and automated processes that replaced taxi drivers wandering around
aimlessly on the street trying to pick people up.

Here we get higher productivity but it's also a powerful hegemonizing,
monopolizing, wealth concentrating force where the controllers of these
automated processes, which scales globally at low cost, can skim value-add
(that used to be done by more people with jobs) from the transportation and
other needs everywhere.

But the solution isn't to break them up and for society to become unproductive
and un-automated again by forcing minimum wage, health insurance, guaranteed
menial jobs etc. Whether we like it or not, taxi radio dispatchers is never
coming back as a mainstream job that can be the bedrock of local communities
again.

Instead, we need to start having discussions now about the fundamental way how
we structure human society in a world where more and more of this planet's
'productivity' is concentrating more and more in the hands of those who
produce the AI automations. This is nothing short of answering the question of
why we're alive. Right now, our sense of purpose comes from trading our
muscular and mental power during life on this planet for GDP. If that's the
metric, our muscular and mental powers' productivity vs AI will lose (maybe in
5 years, maybe in 10 years), and by implication, we lose our purpose for
living. We need to stop pretending there is an artificial scarcity of
productivity and change the purpose of life.

This is a Sanders vs Yang timeline of solving the problems we need to solve in
the next 5 years vs solving the problems we need to solve in the next 20
years.

~~~
core-questions
> more and more of this planet's 'productivity' is concentrating more and more
> in the hands of those who produce the AI automations.

Sometimes I think folks who think like this really need to get outside more.
Yes, a lot of things are being automated, but (a) consider the janky quality
of automation, because it's really not mature yet even in purely-software
environments where everything can be controlled, and (b) consider the raw cost
of doing it vs. the productivity savings and side effects. It's just not worth
it for a lot of things and won't be until we have general-purpose AI and
general-purpose robotic workers that can take on human-scale jobs. Even then,
it might still be cheaper to get actual people in a lot of cases.

But even if so: as someone who implements something you might call automation,
like most here, I have to ask: why is it exactly that I should owe a massive
amount of my economic output to those who aren't outputting anything? At what
point do I simply say "fuck it" and stop working too, because some ridiculous
percentage of my income has to be applied towards feeding those who
won't/can't/don't do anything productive?

~~~
chucksmash
> At what point do I simply say "fuck it" and stop working too, because some
> ridiculous percentage of my income has to be applied towards feeding those
> who won't/can't/don't do anything productive?

Econ 101 opinion here, so I'm ignoring totally reasonable things like "people
work for reasons other than monetary compensation" and assuming you're a
rational participant in the economy, but I'd say there is no percentage at
which you'd do that.

No matter how high a percentage is taken, you can always increase the topline
number to make the bottom line number come out ahead of not working. I'd take
a 99% tax on $1 billion/year over $14k/year in social insurance taxed at 0% if
it were offered.

Anyway, isn't this similar to what the comp of people implementing something
you might call automation is already doing in US tech hubs? We've had
relatively low inflation in the US over the past decade (by CPI, anyway) but I
can find you an article by Joel Spolsky from the aughts lamenting the fact
that some tech companies were paying top new grads _nearly $100k a year_.

~~~
jjeaff
There is a big factor that you are missing when it come to huge taxes. And
that is the fact that people, especially the wealthy, are mobile.

Tax the wealthiest 0.01% at 99% and watch how fast they leave the country for
low tax regions.

It already happens with people like the Facebook cofounder that renounced US
citizenship.

~~~
magpi3
I hear this a lot. I will believe it when I see it. Silicon Valley is crazy
expensive. Why do people go there? Why don't the wealthy of Silicon Valley
live someplace cheaper?

Because that is where the action and the talent is. It's not just about money
and cost of living.

Also the 0.01 are so absurdly wealthy many are pledging to give away their
money. They are not going to move away from their homeland because they are
taxed more.

~~~
jjeaff
[https://www.businessinsider.com/goodbye-america-
billionaire-...](https://www.businessinsider.com/goodbye-america-billionaire-
facebook-cofounder-renounces-citizenship-2012-5)

[https://www.modbee.com/opinion/article226101685.html](https://www.modbee.com/opinion/article226101685.html)

------
jcdavis
No doubt they are struggling to show a path to profitability, but $3.9B of
that is a one-time recognition of all their stock comp which makes look much
worse than it should (Assuming that a 1.3B loss is more "normal")

~~~
munk-a
I am confused at how that 3.9B could be said not to matter - I'm not familiar
with what precisely "recognition of stock comp" means, but I'm going to assume
it was either squaring a previously deferred liability - or directly needing
to pay out some sort of stock based compensation.

Assuming the compensation was for a business need (like hiring labour or
purchasing something necessary) then I don't see how that should be isolated
or differentiated from regular costs of running the business - assuming it
wasn't a business need (and was more of a way to game the stock price) then
I'd assume whoever made the decision to take such an action when Uber is
already losing money hand-over-fist is just trying to get out some loot while
they can... which is potentially an even more extremely bad scenario to
accept.

~~~
umeshunni
Stock based compensation doesn't affect cash flow. It's newly issued stock
granted to employees.

I'm not sure when the accounting laws changed to include SBC (probably post-
financial crisis), but it's weird to include it in an income statement as if
it was a cash expense. You can find articles from accounting experts arguing
both ways if you are curious.

e.g. [http://aswathdamodaran.blogspot.com/2014/02/stock-based-
empl...](http://aswathdamodaran.blogspot.com/2014/02/stock-based-employee-
compensation-value.html)

~~~
berberous
People disagree on this. Warren Buffet for example famously argues that SBC is
a real expense even if non-cash, just like depreciation.

More to the OPs point, I'm guessing Uber had FB-style RSUs that don't settle
until an IPO or Change of Control. I'm not sure how this all gets accounted
for, but given the recent IPO, it sounds like they booked a very large SBC
charge this quarter to account for the immediate hit of all the previously
issued RSUs finally being settled.

Going forward, the number of RSUs that settle each quarter would therefore
presumably not be nearly as large.

But I'm not an accountant so the above may be wrong.

~~~
adventured
> People disagree on this. Warren Buffet for example famously argues that SBC
> is a real expense even if non-cash, just like depreciation.

There isn't much to disagree about. It's a real cost against shareholders
(that's what Buffett is talking about) and it is not an expense against the
business operations such that it depletes your cash or harms cash flow (the
point a parent comment was making).

Putting it broadly, stock compensation is primarily a hit against existing
shareholder ownership. It debases their ownership of present or future
profits.

Uber could simultaneously produce $5 billion in positive cash flow from
operations and issue $20 billion in stock every year to employees. They'd have
a profitable business at the operational level and be drowning shareholders in
dilution.

~~~
munk-a
> it is not an expense against the business operations

Except it is, you're borrowing money from the future if your company would
ever consider issuing more stock in a followup round - it also may damage your
ability to court private investors, not just because you lowered your share
price but because you're more likely to dilute it more in the future.

The stock market is a generally viewed today as an absurd concept composed of
abstract financial wizardry - but it is grounded in the concept of partial
ownership in a company and the assets of that company.

------
Animats
Remember that article yesterday about the company that resold movie tickets at
a loss to gain market share? That's Uber's business model.

(Self driving cars were never going to save them. Not only do they not work
yet, there's no reason to think they'd be much cheaper for years to come. Uber
would have to pay for them, garage them, maintain them, operate control
centers, etc. They'd be in the car rental business, which is not hugely
profitable. Uber's business model is to dump their operating costs on their
drivers. With self driving cars, they couldn't do that.)

~~~
orangep
I never understood why people thought self driving cars would lift Uber out of
their miseries. Even if they do make it more profitable (although it's not as
trivial as you mention), they would also be in a much more competitive
landscape compared to the duopoly situation they have now. The costs might go
down, but it doesn't mean they would be able to maintain their market share.

------
jerf
Interesting stock chart:
[https://finance.yahoo.com/quote/UBER?p=UBER](https://finance.yahoo.com/quote/UBER?p=UBER)
\- set it to 5 days.

Apparently Lyft upped its guidance, and Uber stock took off today; it was up
8.25% percent from yesterday. As of right now, it's now down 10% off closing
to 38.66, a value it hasn't had since... last Wednesday morning.

Disappointing if you're a holder, sure, but not as catastrophic as you'd think
if you only read this news.

(To the extent I have bias here, it is bias against trying to judge stock
performance only by reading about its massive jumps up or down. Uber I'm not a
particular fan of but I can't say I'm all that personally passionately against
it either. I don't mean this as attack or defense, only a perspective on the
news that I think is closer to a truth.)

------
kart23
I only like uber/lyft for one very important reason. Drinking. I truly believe
its saved a ton of lives thanks to its ease of use. I'm in college right now,
and I couldn't even imagine trying to get home without lyft or uber in many
circumstances. Its made it so convenient to get a ride at any time, anywhere,
that nobody even thinks about driving home anymore. Public transport simply
isnt an option at 2am where I live, and the area is not very dense either.

~~~
burkaman
Evidence is mixed: [https://www.nytimes.com/2017/04/07/business/uber-drunk-
drivi...](https://www.nytimes.com/2017/04/07/business/uber-drunk-driving-
prevention.html)

Most people who drive drunk aren't doing it because they're desperate and have
no other option, they're doing it because they're drunk assholes. They will
still do it even when they could get a Lyft for $8. They're drunk.

> I couldn't even imagine trying to get home without lyft or uber in many
> circumstances.

Ok, but people must have managed it somehow 10 years ago, right? Your college
and your city have not changed very much in that time. It truly is not that
hard to take turns with your friends staying sober once in a while, or just
stay over at a friend's place and then leave in the morning.

~~~
kart23
I agree with you on the drunk driving part, but it just makes a lot of
situations way easier. A group of 4 friends can go out without having a car,
have fun, and not have any anxiety about how they are gonna get home at the
end of the night.

My college and the city actually has changed a lot in the past 10 years, it's
seen acceptance rates go down 20%, 2 deaths in Greek life, tuition rise by
$10,000, and major companies move into the area. My school also has developed
a parking shortage, so many students living on campus are not allowed to bring
cars. Uber/Lyft is a godsend for many students.

~~~
burkaman
I agree that it makes things easier for people who use it. I used it a lot in
college because my school basically told us that if we walked more than 3
blocks outside campus we would get shot.

My point is that it's a marginal improvement, and there are so many downsides.
In my city, 8% of cars on the road are Ubers and Lyfts, and half of them are
just drivers cruising around looking for passengers. [1] That's terrible for
traffic, terrible for the environment, and terrible for anyone who wants to
bike through a square without a clueless Uber swerving into them to drop
someone off.

Also, the backstop of Uber makes it much less likely for people to push for
real sustainable public transport. In 5 years, when Uber is dead or so
expensive that most people won't use it regularly, we're going to look around
and wonder why the buses and trains seem to have stagnated for 15 years. It's
a tough sell to shut down a few streets to expand a subway line right now when
that disrupts all this essential Uber traffic.

Finally, think about the opportunity cost. The hundreds of billions of dollars
that could have gone to real infrastructure [2], or startups that aren't going
to fire all of their definitely-not-employees in a couple years.

[1]
[https://drive.google.com/file/d/1FIUskVkj9lsAnWJQ6kLhAhNoVLj...](https://drive.google.com/file/d/1FIUskVkj9lsAnWJQ6kLhAhNoVLjfFdx3/view),
[https://www.citylab.com/transportation/2019/08/uber-lyft-
tra...](https://www.citylab.com/transportation/2019/08/uber-lyft-traffic-
congestion-ride-hailing-cities-drivers-vmt/595393/)

[2]
[https://twitter.com/i/web/status/1157456628532170752](https://twitter.com/i/web/status/1157456628532170752)

~~~
kart23
I agree. You bring up some great points.

It's kind of ironic, at my school we have a great (all electric!) bus system
transporting people around campus, and half the time when the bus pulls up to
the cutlet, there's an uber there either waiting or dropping off a passenger.
Which then slows down the bus while it honks at the clueless driver who
doesn't even know there's a bus stop there.

------
yalogin
I strongly believe Uber is going to shut down their self driving car unit at
some point. May be in a year or two. There is no reason to keep that running
when the end is not in sight for SDCs. That is not going to happen at the
level Uber wants any time soon. If not today, very soon, Uber is going to
accept it and dump their unit.

~~~
Traster
Or they could do what Tesla does and continually pump out press releases to
prop up their stock price.

------
blackflame7000
It seems unfathomable the rate at which some of these companies lose money.
When I think of asking an investor for money, I imagine having a to put
together a pretty foolproof plan of action to get a return. How do companies
like Uber, Tesla, or even Amazon early on convince investors to lose money
year after year? Investors have never struck me as the patient type.

~~~
chadcmulligan
They call it "Tilt" in poker, you have a losing hand or two and start throwing
money to try and recoup your losses.

~~~
blackflame7000
I get your sentiments, but to me, it's like going on Tilt with someone else's
money while they watch.

------
andreachase01
It was easy to apply for a personal loan with WESTERN LOAN FINANCE and they
were quick to respond. They made the process seamless and were very helpful. I
am happy I chose them. I would highly recommend.

------
Someone
Reading [https://investor.uber.com/news-events/news/press-release-
det...](https://investor.uber.com/news-events/news/press-release-
details/2019/Uber-Reports-Second-Quarter-2019-Results/default.aspx):

    
    
      1,740 Cost of revenue
        864 Operations and support
        638 General and administrative
      _____+
      3,242
    

That’s higher than revenue (3,166), so even ignoring R&D (3,064), Marketing
and Sales (1,222), Interests (151), and a few other expenses, they aren’t
making money.

Also: what’s in “Cost of revenue”? It is neither “Operations and Support” nor
“General and Administrative”. The subsidies they give drivers? If it is,
prices would have to go up by about 50% for that to go to zero.

------
_bxg1
Fully self-driving cars hit a wall (no pun intended), and that was their only
story for eventual profitability. Not surprising.

~~~
toasterlovin
FWIW, I don’t think self driving cars would have made them a good business.
Once you no longer need drivers, all you’re doing is deploying a fleet of
automobiles. We already have companies that do this: taxi services and auto
rental companies. They’re shitty, low margin businesses with tons of
competition. The promise of Uber was being a monopoly because they were first
mover on a market with network effects. Much like eBay. But self driving cars
remove the network effect inherent in needing to attract both drivers and
riders.

~~~
i_cant_speel
You aren't going to rent a car to take a fifteen minute trip across town, so
that isn't really comparable. And yes, they _would be_ a taxi service. But
they would be a taxi service with lower costs since they don't need pay for a
driver.

~~~
toasterlovin
Right, but they wouldn't have a monopoly on being a taxi service. And
literally every other business where you're managing a fleet of equipment is
not a particularly special business. Why would Uber be any different?

------
ummonk
Is it just me or is 12% growth in adjusted revenue very mediocre for a company
taking a loss and trading at Uber’s revenue multiple?

~~~
georgeecollins
It makes no financial sense. You can't even talk about what the P/E multiple
should be for that growth rate because you can't guess what their earnings
will be. As many others have posted they are not close to breaking even so it
is hard to conclude what changes they would have to make to earn $1 in
operations. (I know they have had a profit in a qtr. I am taking operating
profit.)

~~~
ummonk
Yeah I mean at their growth rate they would need like 100% profitability to
justify the current market cap.

The P/S multiple is what you’d expect the P/E multiple to be.

------
throwaway713
Stupid question: but how is this the case? The fare I pay for an Uber or Lyft
seems much higher than the time/car/insurance cost of driving myself ($30-$50
for a 25 min ride to SFO). But the drivers don’t get much of that fare, so I
assumed the bulk of the money went to Uber/Lyft. But they’re badly in the
red... so where is the money going? I’m missing something here.

~~~
lkbm
> But the drivers don’t get much of that fare, so I assumed the bulk of the
> money went to Uber/Lyft.

Ridestar claims that 61% goes to the driver; 39% to Lyft/Uber.[0]

Their S-1[1] shows lots of sales and marketing, lots of R&D (remember, they're
working on self-driving cars, among other things), and lots of general/admin
(I suspect they spend a lot on legal).

[0] [https://www.ridester.com/uber-fees/](https://www.ridester.com/uber-fees/)

[1]
[https://www.sec.gov/Archives/edgar/data/1543151/000119312519...](https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm)

~~~
freyr
Besides the R&D, they hired an army of SV software engineers at top-of-market
rate.

------
dcchambers
Oof. This doesn't look good no matter how you shake it. I wonder how long the
investors go on before saying "enough is enough."

I don't have a horse in this race, but if Uber/Lyft fail there are going to be
substantial societal repercussions. Admit it or not, they have disrupted the
transportation industry significantly.

~~~
nemonemo
The one who fails later could get the market share and monopolistic power. The
void will be filled as soon as it gets created. That is how the market economy
normally works.

------
Endy
Well, that explains why my daily commute has gone up in the last few weeks. If
they'd let me buy a ride pass, that'd at least make me use them. Instead, Lyft
gets my business.

Just as a note: without a low-cost private car, I literally could not keep my
job.

------
throwaway382948
Can't help but feel schadenfreude after a rather nasty interviewing experience
at Uber earlier this year. In the eyes of their recruiter, preferring
competing offers that are > $100k higher than Uber's makes you a despicable
person who only cares about money, apparently. Coming from a nonprofit I would
have felt bad for a second but Uber? Come on.

------
aussiegreenie
The most ridiculous thing in Sydney is all the Uber drivers drive for Uber,
Bolt and Ola. The same car, the same driver but the only difference is a which
button I push on my phone.

So whoever gives me a discount I will use and if no one will I will catch a
bus or taxi. Google Maps shows me the estimated cost for Uber and Bolt.

~~~
xyzzyz
I wouldn't say it's really that ridiculous, not any more than different
grocery chains carrying the same products. I think this is exactly what gig
economy, and in general market capitalism, should be like -- pushing the price
down through competition for the benefit of the consumer.

~~~
buboard
The consumer in these apps is the driver. They are emphatic on that

------
buboard
I wish more companies did that, effectively trickling down the VC and investor
money down to their employees, and preferably the gig workers. We should be
encouraging more companies to adopt the Uber model, except we should insist on
that gig worker compensation.

------
avgDev
The biggest issue with Uber for me is pricing. I like to pay a fair price.
Uber uses AI, therefore, you don't pay a fair price. I don't feel like
researching options every time I need a ride. Many tech companies hope for
lazy consumers, who sign up for food deliveries and don't notice 5c price hike
on eggs. Who get used to ride sharing service and fail to ever verify that
uber/lyft still offers competitive pricing.

I don't want to work around it. Therefore, I rarely use these services. It is
becoming more and more hassle.

~~~
i_cant_speel
I'm assuming by AI you mean adjusting the prices based on supply and demand?
What do you suggest as an alternative? If prices don't adjust accordingly, you
simply won't be able to get a ride.

~~~
avgDev
No. I have no issues with supply and demand based pricing. The issue for me is
that two different people may get different pricing for the same trip only
because AI found a certain customer can/will pay more.

------
aresant
Uber laying off 400 two weeks ago felt like a leading indicator that they were
going to deliver a weak quarter, I'm surprised this wasn't priced into the
stock (which is now down ~10% after hours after finishing today's session at
+8%). What was the market expecting?

(1) [https://www.nytimes.com/2019/07/29/technology/uber-job-
cuts....](https://www.nytimes.com/2019/07/29/technology/uber-job-cuts.html)

~~~
MuffinFlavored
The same thing it was expecting from Beyond: world domination.

(kidding)

------
Tiktaalik
The recent realization by cities that these services are making traffic worse
will induce more regulation which will make these services even less viable
than they already are.

~~~
smileysteve
As rides get more expensive or as these companies run lower on cash to burn; I
suspect we'll eventually get back to the traffic reduction use case; an easy
way to make a buck driving a route you're otherwise already taking or just a
few miles from your house.

~~~
ufo
I'm not sure that actual ride-sharing like that can out-compete public
transit, from the point of the view of the customer.

------
untog
I really wonder where Uber, Lyft etc. go in the future. Uber in particular
seemed to betting hard on the fact that self-driving cars would make them
wildly profitable but it seems like that is a _long_ way away yet. And they're
still subsiding rides in a lot of markets to make them look a lot more
affordable than they really are.

I still think there's a market out there, but Uber in particular feels like
it's grown too big for the actual market it can hope to occupy.

~~~
totalthrowaway
I hear this line of thinking a lot, and I still don't understand why _Uber_
would be the one to rake in all the self-driving cash. What do they have that
a new self-driving debt-free startup won't have?

~~~
scarejunba
The self-driving tech, presumably, and a ready-made userbase, brand, and
presence across the globe. They could then seamlessly have both self-driving
and human-driving delivery/transportation.

------
YeahSureWhyNot
these guys have been raising prices and keep 30-40 percent cut from every ride
but they still manage to lose billions? how is that possible?

------
arendtio
Everybody seems to be focused on the fat loss figure, but what I find more
intriguing is the relationship between revenue, 'reoccurring' loss and growth
rate. When you see that their $3.1B revenue is just two times the solid $1.3B
loss they had, you wonder what they spent their money on if they have a growth
rate of just about 14%...

------
rgejman
Is uber just an elaborate vehicle designed to redistribute wealth from
investors to cab drivers and computers engineers?

~~~
AdrianB1
And top management. In corporate America each person in top management earns
as much as dozens to hundreds of their low end workers.

~~~
rgejman
True, true.

------
yibg
Seems like there is a lot of mutual benefits between Uber and local taxi
companies. Didi does this in China, where you can hail a taxi through the Didi
app. Not sure if there is any revenue sharing setup but payment is made
directly to the taxi driver. Seems like a win win for all concerned.

------
codesushi42
Prepare for the pop of the tech bubble once Uber goes under. It will likely
coincide with the upcoming recession.

Stay tuned.

------
vit05
Car-sharing apps will eventually prove to be a better solution than Uber and
its peers. Having a private driver at your disposal, even for a short time, is
expensive and always will be. And right now, thanks to subsidies, Uber can
compete with mass transit in many cities.

------
chiefgeek
This is a great piece about Uber/Lyft.
[https://americanaffairsjournal.org/2019/05/ubers-path-of-
des...](https://americanaffairsjournal.org/2019/05/ubers-path-of-destruction/)

------
madrox
I'd be curious what investors of Uber (of which I am not) expected here. I
don't think anyone expected a gain, but this article is light on analyst
expectations. I would expect several years of this from a company trying to
grow the way Uber is.

~~~
darkwizard42
I think the issue investors had was the growth rate slowing and misses on
revenue.

You can see the losses shrunk (lets for just a second ignore the stock based
compensation because that should have been something every investor of Uber
should have known was coming) but missing on top line revenue is pretty rough.

------
mikestew
Uber was up for the day by 8%, too. Down 10% after hours:
[https://www.nasdaq.com/symbol/uber/after-
hours](https://www.nasdaq.com/symbol/uber/after-hours)

~~~
MuffinFlavored
+8 - 10% = only a 2% drop from yesterday's price! :)

~~~
dragontamer
I'm not sure if you're joking... but... +8% means 108% stock price. -10% means
multiply by 90% == 97.2% or a total price-action of -2.8%

This makes a bigger difference when big drops come into play. A 50% gain is
offset by a 33% loss.

------
acadien
Car owners in small towns posting in here like "finally that fake gig economy
is dying"

City dwellers posting the opposite because they rely on the product to make
their lives work.

Here I am, stuck in the middle with you.

------
unreal37
I'm interested in the investors who bought Uber at IPO.

What were they expecting to happen? A company losing money with no sign of
being profitable any time soon. If ever. They expected the stock to go up?

------
alkonaut
Uber must have a viable business model that shows black figures in all areas
they operate in. What does that calculation look like? I.e. what are the
prices, driver compensation?

------
cloud226
I wonder how many people know this high loss mainly comes from IPO costs and
compensations which is almost 4 billion. So stop analyze something you don’t
understand lol

~~~
samfisher83
Even if you remove Stock compensation their net income and FCF is negative.
Their driver compensation is already poor. With governments starting to
crackdown on driver they need to reduce costs.

------
bradhe
They've been slowly hikin' rates in my geo for months now. Used to charge me
$6 to work one way. Three months later it's now double that.

------
tempsy
UberPool is so aggravating these days (slow, unpredictable) and taking a
regular Uber within SF is like 3x the price what it was a few years ago.

------
tw1010
I mean, haven't they kinda saturated the market?

------
emtoor
That is a very narrow and shortsighted way of looking at. The ol' pull
yourself up by the bootstraps.

------
jumelles
> A majority of that [$5.2B] — about $3.9 billion — was caused by stock-based
> compensation that Uber paid its employees after its I.P.O. Excluding that
> one-time expense, Uber lost $1.3 billion, or nearly twice the $878 million
> that it lost a year earlier.

Not exactly as bad as the headline makes it sound, but still bad. EDIT: Still
very bad. Obviously!

~~~
arbuge
It's bad all the way, including the $3.9 billion, which is a massive sum. As
Warren Buffett says, "if stock-based compensation isn't an expense, what is
it?".

~~~
toasterlovin
Exactly. It’s just an expense that you get to ignore for the time being
because it doesn’t affect cash flow.

------
deckar01
Looks like NYT changed the way they paywall, but all the text content is in
the DOM (for SEO purposes I assume).

    
    
        console.log(document.querySelector('#site-content').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))

------
eschneider
Is that a lot? I hear $5.2B is a lot...

------
boyadjian
Uber will go into bankruptcy, and it will be the starting point of the next
worldwide economic crisis.

~~~
ghaff
What percentage of the US population do you think has taken an Uber in the
past month?

From January: "According to a new poll conducted by the Pew Research Center,
just 36 percent of American adults say they have used ride-hailing services.
Sixty-one percent say they have heard of the services but hadn’t taken a
ride."

[https://www.wired.com/story/uber-lyft-ride-hail-stats-pew-
re...](https://www.wired.com/story/uber-lyft-ride-hail-stats-pew-research/)

Heck. I travel lots and it's probably been a few months since I've taken a
Lyft or Uber.

I don't think it's as important a company as you seem to think.

~~~
refurb
I think the GP has a point though.

It's not as though UBER going under is going to tank the economy, but it will
be a major unicorn going under, causing the entire silicon valley money-losing
model to be questioned, leading to trouble raising money, layoffs which drag
down the rest of the economy.

Similar to the 2000 crash.

~~~
ghaff
That's not the world economy though. It's a bunch of highly-paid software
developers losing their jobs and a subsequent (though probably rather delayed)
crash in Bay Area real estate. Though that really depends on Google, Apple,
etc. more than startups.

Not great for devs looking for 6 figure jobs in the Bay Area. But not clear
how broad the effect would be--unless they were triggered by more serious
external events.

And 2000 crash also was associated with other things like 9/11 so it's easy to
conflate.

~~~
refurb
Agree that it’s not the world economy and stable big tech companies wouldn’t
be that impacted, but people are looking for any sign that a recession is
coming.

Several unicorns going bust could be enough to kill confidence in the markets
and cause people to prepare for the worst (I.e. sell investments and stop
spending).

Just a hypothesis!

------
ramon
In Brazil it's cheaper to use Uber than to own a good car.

------
pastor_elm
3.9 billion to employees in addition to sky high wages. How to get in on the
next Uber?

~~~
throwaway082729
Uber's cash-based compensation hasn't been that high, has it? A friend of mine
who was making $150k base at a public company was offered $115k and purported
stock of $500k. He needed the cash so he didn't take that offer. This was back
in 2016. Things might have changed since then.

------
dannykwells
Biased headline, biased article.

1\. 3.9 Bil was a one time cost

2\. 1.3 Bil is _not_ almost double 880 Mil. I mean that's just egregious.

~~~
moate
Let's say you give me 20 bucks, and I drop it. But only one time.

Does that mean I didn't lose your $20?

~~~
umeshunni
Let's say I take a piece of paper, tell you that it's worth $20 and give it
you. And then you drop it.

Did you lose $20?

That's a closer analogy to SBC than losing cash.

~~~
moate
Closer! Let's say you give me a coupon that I'm able to redeem from you later
for 20 dollars.

Do you owe me $20?

This is the closest to what SBC is.

If the options are exercised, you're liable for that expense. It's a delay on
the payment of the 20 dollars helping cash flow, and tax code yadda yadda, but
you can't pretend that handing out vouchers for money to employees doesn't
mean you're not liable for the money from an outsider assessing your
financials.

