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Uber, losing billions, freezes engineering hires (arstechnica.com)
50 points by steeleduncan 74 days ago | hide | past | web | favorite | 13 comments

This isn’t bad news. This is exactly the sort of cost cutting and fat trimming a company in Uber’s position should be performing. From a tactical standpoint, Uber’s IPO acts as a promise to Wall Street that they will continue their existing business while slimming down their books.

From a strategic position, it’s not as great. Uber’s rivalry with Lyft is a war of attrition: given that the two services are perfect complements, right down to the drivers themselves working both networks simultaneously, growth is entirely a function of platform-level economics. While Uber is wise to cut corporate costs before materially cutting driver commissions or raising consumer prices, it’s not exactly a show of strength to be scaling back marketing and engineering, the very departments that Uber needs to continue growing.

That being said, the size of Uber’s war chest doesn’t make me worry about their ability to continue operating. If I had to prognosticate, though, I’d say this is a sign that Uber is going to be posting some rough results for a couple quarters.

Marketing is definitely important for growth.

But the whole point of technology and good engineers is that you can scale up without hiring more people.

I see no reason a solid core of engineers couldn't scale Uber out indefinitely.

I've been at a company that did a hiring/salary freeze. Really hurts moral. We can expect Uber's services to potentially degrade/not improve much for a while.

As a former boss used to say - “There’s either growing or shrinking, there’s no option to stay the same.”

Funny how different it is. Smaller companies have a hiring freeze 90% of the time.

At companies this size, in tech at least, you always have a constant flow of people joining and leaving. A hiring freeze means your shrinking. Your engineers are slowly evaporating, and you're not replacing them.

Uber needs to head back to luxury, Travis, despite his MANY flaws, always had an eye on this.

Uber needs to focus on it's most profitable cities and promote the subscription service. Target families with kids using highly trusted drivers and extra safety features, expand into medical transport, and "rent a driver" services.

I wish there were a real uber black service with professional drivers and better cars.

This feels like the sort of thing no one should be surprised by.

It seems the basic premise of Uber and Lyft was to gobble up market share at enormous cost while autonomous cars were getting figured out, then switch to full driverless ASAP.

But full driverless keeps being “just a few more years away,” and it looks increasingly like that’s going to be too long for Uber to avoid running out of money.

I still can't figure out how Uber actually manages to lose money still.

They take something like a 20% cut of the fares don't they? How is this insufficient to pay for their platform?

I actually think they should be already be incredibly profitable.

Fares don’t cover what Uber pays to drivers + all the expenses of being a worldwide company with hundreds of engineers, marketing, leases, etc.

Basically Wallstreet is subsidizing taxis for people at the moment.

Everyone kind of has massive stock payouts in SF. Apparently this was the large reason why they lost so much money this quarter

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