Hacker News new | past | comments | ask | show | jobs | submit login

Yes you might be paying Uber more, I pay them about $300-$400 a month between our occasional use and my teenage son getting around (still cheaper than a car + insurance), but they lose money on each ride. Amazon has high fixed costs while they were building infrastructure. Uber has negative marginal profits.

Edit: negative marginal costs -> negative marginal profits.




I can't get a clear reading from Uber's most recent financials filing in Feb to determine that they have negative marginal profit. It looks the opposite to me. Given their substantial gross profits, I have to think that they last ride they sell is profitable.


What gross profits?


For FY2018, Uber reported $5.6 billion in gross profits and gross profit margins around 50%.

https://craft.co/uber/metrics


So they made money as long as you ignore stuff like operating expenses..


That’s the definition of gross profit. Within operating expenses, advertising is close to a cost of profits in a way that R&D isn’t.

It’s why we use multiple metrics to evaluate a business, but it’s clear that Uber has large positive gross margins.


When it comes down to it. The only thing that makes a company viable is whether they are making more money than they are spending.

Ignoring all other expenses and saying that a company is a good business is ignoring reality.

I’m not just choosing a method that makes Uber look bad. They are not profitable or successful based on a legal GAAP definition of profitable.

If we just cherry pick numbers, we might as well think that WeWork’s made up metric of “community adjusted EBITDA” is valid.

https://news.crunchbase.com/news/wework-details-run-rate-rev...


Selling a $20 bill for $18 is unsustainable. Selling a $20 bill for $40 and having $15 of advertising expenses and $15 of R&D expense might be sustainable. I think Uber is comically overvalued here, but still is a viable business which is profitable in its core operation.


Marginal profit, rather. Negative marginal costs would be pretty sweet.




Registration is open for Startup School 2019. Classes start July 22nd.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: