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Oracle’s Larry Ellison Calls Uber and WeWork ‘Almost Worthless’ (barrons.com)
59 points by ycombonator 23 days ago | hide | past | web | favorite | 92 comments



Neither of these companies is actually adding any value at all as far as I can tell. Uber is undercutting taxis/transit with investor-subsidized rides and still has no idea how it's going to turn a profit unless it becomes the only ride in town. WeWork is pure middleman with some good branding. It amazes me that people believe these valuations. However, I can't agree with the cat comment; I'm sure Uber engineering are tackling tough technical problems.


I think Uber (and Lyft) are absolutely adding value. I now regularly take ride shares when I would previously have driven or extremely reluctantly taken cabs. I also talk to my rideshare drivers and the platforms provide some much needed cashflow (and perhaps day-filling) for people who seem genuinely happy to avail themselves of the income opportunity provided.

I see no reason to think that those two companies couldn't be quite profitable in their core businesses in their established cities. (I think they already are.)

That said, their valuations in the market are comically/insanely/unjustifiably high, but that's quite different from saying they "add no value".


I heard some economist call Uber "the greatest transfer of wealth in a very long time". What Uber is doing is taking investors money and subsidizing your Uber ride to a restaurant.

They are providing value and I'm a casual user myself. However the consumer price right now is arguably unsustainable against the stated quote above. To survive both of them are going to have to raise prices


This is not true. Uber drivers make tons of money. I know because I was one. The press put a microscope on the subset of drivers who are stupid and can’t make money because they run their businesses poorly. The press is happy to let them tell their son stories but what they don’t mention is that those drivers refuse to drive anywhere outside their immediate area, they drive huge shitty cars that cost literally ten times more per mile to operate than a corolla or Prius, and various other things. There’s this myth floating around that Uber is a trap because the costs of running and maintaining a vehicle is difficult to quantify and all Uber drivers are uneducated people being taken advantage of. This is totally, completely untrue and seeing this myth/meme spread like cancer across the entire internet has opened my eyes to how something that is totally untrue can become widely and vehemently believed. It’s simply not true. I’ve given many thousands of rides. I know. I have a college education and the calculations solidly land within the region of very healthy profit no matter how pessimistic the maintenance projections are and no matter how wide the error margin is made. It’s. A. Fucking. Myth. I genuinely wonder if people will someday understand.

Anyway, drivers make more than enough. After glancing at Uber’s books, it looks like they spent literally a billion dollars on advertising. They also do a a lot of research. Uber could easily run its ride sharing service with room for profit if it wanted to cut back in other areas.

Ride sharing is totally economically viable as a business and it is better than traditional dispatch in almost every way. Companies like Uber aren’t going anywhere. To say that Uber is worthless is flat out wrong. Overvalued or levered or invested-in, yes maybe. But ride sharing is solid. The only thing that could change it is self driving cars.


can’t make money because they run their businesses poorly

I don't have any data but this wouldn't surprise me in the least.

You're taking a bunch of people who really aren't that interested in running a business, just in making ends meet. It's not surprising that they won't do the kind of critical analysis that running a profitable business entails.

My first ever Uber ride was in an almost brand new BMW. Really nice car, but I have no idea how you can make money driving Uber with a vehicle that expensive. As a side gig for extra cash a couple hours a day in a high-density area? I can see that. But doing it full time with all the additional wear and tear on the vehicle? No way.

Judging from the comments I see on /r/freelance, I believe many freelancers/gig workers would prefer to be employees because they really don't enjoy doing the work that they are.


I’m gonna trust the multitudes if studies than someone telling the rest of his peers to be better.


You should trust neither. You should think for yourself. Nobody seems to be able to do it anymore.

Look, you don’t need a paper or a PhD to understand this:

When I was driving, I got paid roughly 60c per mile and then got more for time, a one time fee and tips. But baseline 60c per mile. It costs 20c to 25c per mile to drive a Toyota Corolla. Yes, that includes all expenses. It’s the cost of insurance and gas and the cost of buying a new car when the old one is at end of life. Nobody is losing money doing this. It isn’t rocket science.


Would you tell them to think for themselves even if they happened to be agreeing with you?


There are so many layers of nuance that your comment glosses over that I find it hard to answer. It depends on why they agree with me. Do they agree with me because they were an Uber driver too? Because they did the math? Because they believe anything they read? In the context of agreeing with me, have they made it obvious whether or not they checked this conclusion On their own? Do they provide the reason they agree with me? Is this agreement a comment or simply an upvote? Be more specific.


> The press put a microscope on the subset of drivers who are stupid and can’t make money because they run their businesses poorly.

Which very likely is the vast majority of drivers. Subtract those and we're back to ordinary cab, pizza delivery levels of service. Probably less.


I'm not convinced they'll need to raise prices in their core business. Looking at the Boston rates ( http://www.alvia.com/uber-city/uber-boston-2/ ), those seem very much sustainably profitable for drivers @70% share and Uber could surely run the platform for their cut of those figures.

To know whether they could fall back to "just" competing for riders and only operate their core business is something that is not determinable from their released financials. How much engineering is true R&D (self-driving and the like) vs what would be required to run their core ride hailing platform? How much of their marketing spend is in established cities ("Coca Cola" type ad spend) and how much is to launch new cities or incentives to balance the development of the 2-sided market in new cities ("priming the pump" type of spend)?

I think Uber is a constellation of [small] profit-making businesses (most cities that have reached scale) and [large] loss-making businesses (select geographies and R&D efforts).


Neither Uber nor Lyft are really ridesharing. They are ride hailing apps. Unless you are sharing with other passengers? I didn't realise they offered this?


They've been doing this for years now. Significant savings that way too.


TIL! I always thought they just pretended they were ridesharing because you were sharing with the driver who just happened to be going the way you asked them to.

Goes off to see just how prevalent real ridesharing is on the platforms


Only anecdotal, but Uber Pool is by far the most popular product among my cohort in Brooklyn and Manhattan.

Usually you ride with at least one other person, and it’s not unusual to have 3-4 passengers if it’s a third row suv.

I enjoy shitting on Uber also, but there is a grain of genuine innovation in the mountain of crap.


Yes, Uber pool and Lyft line both allow you to share with other riders.


They do add some value. They don't add any value above a taxi company/cooperative with a decent app.


At least one bit of the value is that you do not have to install new app or two in every city you go to. I wish something like this existed for parking payments.


I'd be happy if I was even allowed to install the parking application in the first place. When I went back to Sweden last time to visit my family, I rented a car but when I wanted to park I wasn't able to install the application since my account is not Swedish.


Only having to install one app to get a consistent experience around the world is high value for me as a user.


They may add value vs taxis, but would Uber or Lyft add value vs any other startup taxi service?

Expanding further, How about a taxi-app you and I could sit down and hack out? How much value-add is there in an Uber or Lyft vs what we could do?


Be careful, you're suspiciously close to saying the uber is nothing more than FTP, curlftpfs and CVS. [1] I'm not arguing that Uber is worth it value, but dismissing the tech & usability involved is a treacherous road to go down.

1: https://news.ycombinator.com/item?id=9224


In my area, they add no real value over the standard taxi companies. Literally the only advantage to them is that they're cheaper (which is an artificial and unsustainable difference). Everything else they do is also done equally well by the cab companies.

That may be why there aren't an increasing number of Uber and Lyft drivers here, but the taxi companies are expanding.


In your area, do taxi companies operate a service "Lift Line" or the uber equivalent, in which you share a taxis with strangers who are going in a similar direction?

I have never seen a non-app taxi service do this, and it's a real genuine technology enabled value add. Is it 50 billion bucks worth? Probably not. But it isn't 0 either.


I grew up with something like this. We called them buses, they were pretty cool :)


I have no idea, since that's not a feature that I'd notice or look for.

> I have never seen a non-app taxi service do this

What do you mean by a non-app taxi service? All of the taxi companies here have apps that work pretty much the same as Uber and Lyft's.


Do your local cab companies offer the equivalent of uber pool or lyft line?


Doesn't Flywheel already own that space?


The problem I see with Uber is that, at the end of things, all they provide is some software running on some servers. While not an easy weekend project, it would not be impossible for a distributed system to replace it, making whatever life they have almost certainly temporary. Every action they take to extract more profit will only increase the pressure toward development and move towards a distributed system. As long as it can present an app to a customer that can hook them up with a driver without being obtrusive, it seems like a service destined to become a commodity and certainly not something likely to be a cash cow for long.


> The problem I see with Uber is that, at the end of things, all they provide is some software running on some servers.

That's true, and this isn't an argument for the bad things they do, but they did force the taxi industry forward a few decades. Prior to Uber/Lyft, taxis in most areas were outright hostile. I had called to schedule a taxi ride the day before and had them no-show. It was so common for taxis to feign their credit card machine didn't work that it was outlawed (but still done)--they preferred cash to avoid reporting and fees. Hailing taxis in most cities isn't permitted. Minimum distance requirements have caused me problems (been refused or been treated hostilely even when offered to overpay or overtip). Those things are never an issue anymore.

In addition, they've also made it much easier to track down lost items left behind or to dispute incorrect fares or taking longer routes.

The incentives in place with taxis alone didn't address these things.

Those things, in addition to having consistency when traveling between cities and countries, sounds like a reason to have stickiness to one service. McDonalds is popular even though it's not a great meal and people could eat anywhere.


I didn't mention anything about other things they've done, I'm just looking at what the organization actually provides to the market. While it is true that they did all of the things you mentioned, that is unfortunately what's known as First Mover Disadvantage. They pave the way, and now anyone can crop up and make use of the tough road they laid down.

McDonald's is popular, at least this is what I was told in business courses, because people like familiarity and they know when they get a meal at a McDonald's it's going to be mostly the same everywhere. Uber doesn't really enjoy that. They do enjoy that it is a unified app and service no matter where you are, they have that going for them for a certainty, but they do not have control over their drivers to the level at which McDonald's has control over their franchisees. That's down to the fact their drivers are independent contractors, although it likely couldn't work any other way. It might be moot since the service is the same, getting from point A to B, so the part people want stays the same.

I would almost be inclined to see it as Uber being more valuable for their management of driver reputations than the software they provide, really. They set a standard, and hold drivers somewhat accountable to that standard, which is something that a more 'open' solution would make very difficult or impossible to do.


Admittedly, I was venting over inaction of the taxi industry to innovate. While I do think other competitors, like Lyft, can do those things I'm skeptical if the legacy industry could catch up even if the way has been paved. I imagine the ideal would be a "platform" that gets sold regionally.

Like McDonalds, at least for travelers (or, well, me) having the app already installed and setup with a form of payment is huge. I've visited cities, like Austin, when they didn't have Lift/Uber and figuring out their "local service" was rough. You've landed at an airport and likely don't have great service. To seek and download and register a new app is a big burden. It's also why using a credit card internationally is much less hassle than getting local currency.

"Apps" and "services" are ubiquitous, but incumbents are pretty terrible at them. Large organizations like Apple, Playstation, or Obamacare have had rocky launches of services--they had more incentives to polish things later. Often those services would go down completely Christmas morning. Many apps like my local bank or library, have terrible apps. That's how I imagine legacy or regional taxis responding to Uber.

It's been over a decade and a lot of those features weren't that novel at the time. I've heard of a few cities internally having decent apps, but it hasn't been that wide spread. Maybe that will change?


Uber is absolutely adding value, in my opinion. Disclaimer: I’ve invested a paltry amount in them

Uber is a taxi dispatcher and provides a rating system that provides a vastly improved product to the end user. Seriously Uber is so much better than taxis. You can hail it from your phone, track its arrival in real time, know the fare before you book it. It arrives in 10-20% of the time of a dispatched taxi, costs less, and has much better drivers on average both in terms of skill/not being aggressive, not being assholes, English, and cleanliness.

Uber freight is frankly just a good idea. They already have a huge fleet of drivers and a lot of the tech backend in place to start doing last mile delivery. Lots of value add in that, and in combining last mile delivery with concurrent user transportation.

Uber also has a lot more international exposure than Lyft.

The only issue I have with them as an investor is in Uber eats. It’s costing too much money to subsidize, has too much competition, and food delivery just isn’t something I think can work in the US.

But regardless, when you look at Uber’s core product, I think you would have to have either forgotten about taxis or never have taken Ubers/taxis to begin with to think it’s not a vastly better product.


Have you ever used Uber? Did you ever use Taxis back when they existed? It's astonishing to me how much better Uber is than Taxis, there's no question that they're adding a ton of value compared to what they're replace, at least for me as a consumer. But I hardly think I'm alone in this. On the other-hand will they be able to profit from this value? That's at best tbd, and likely already a conclusive no, they've built a valuable commodity, that people aren't even used to paying commodity prices for because it's been VC subsidized for so long. So I can't agree with the adding no value comment, but I don't think the valuation is correct.


> Have you ever used Uber? Did you ever use Taxis back when they existed?

Yes, and yes, but (at least where I live), the Uber/Lyft "experience" is not superior to the taxis at all.


Fair enough, and sorry if that came off as condescending. Everywhere I've lived (SF and Chicago) Taxis are completely unusable, I'd call dispatch to request one and maybe get one an hour later. The value of Uber/Lyft to me is mostly just that it's a Taxi that works.


Yes, I know from experience that there are parts of the US where taxis are simply awful. But that's not true everywhere.

Where I live, the taxi companies have their own apps that you can use if you prefer (complete with being able to see where the cab is in realtime), and when you call, you'll usually get a cab within 15 minutes.

Aside from price, there literally isn't anything that Uber or Lyft does that the cab companies don't do at least equally well.


I guess it depends where you live.

I used (15y+ ago) to go to work and back by taxi every day for years. Recently (last 2-3y) I got taxi on occasionally; also living in a different area. No real difference with app based ones except for the payment methods. That's it, no need to pay anything for app-based ones (not uber) in the taxi, immediately. That makes the ride shorter and I don't need to care if the taxi will be equipped with a POS terminal as I seldom carry cash.


The biggest thing that Uber added was the ride-summoning app. I gather that these are beginning to come into existence for taxi companies, but especially at the time, it was a huge boon to download one app and be able to summon a ride wherever you went.

Instead, you often had to place an actual voice phone call -- or multiple calls, since different companies had different dispatchers. You would get no feedback on when your taxi might arrive -- or even if it was. I've answered plenty of panicked phone calls from friends whose prearranged taxis didn't arrive and were desperate to get to an airport before their flight.

If the taxi companies had acted professionally about it, Uber might not have been able to take off. As it was, using Uber was simply a better experience than taking a taxi -- except perhaps right in the middle of the most taxi-heavy cities, where you could stick out an arm. It wasn't so much about price as about just knowing that the ride was coming, and not really caring who precisely provided it. The taxi companies were not competing on anything I cared about.

The actual car-sharing aspect of their service is of dubious merit, and I prefer Lyft to Uber anywhere I can. But I'll take either to having to actually phone a dispatcher, or having to download Waave in New York and myTaxi in London and god only knows what in Cinncinnati.


> I gather that these are beginning to come into existence for taxi companies

There is a lot of value in having only one or two major players in this space. I often travel and use Lyft or Uber to get around. If you have to Google 3 companies every time your plane lands in a new city and create a new account and add your credit card, that is a tremendous hassle.


Uber is the reason I no longer need to take out local currency when I am traveling in Europe. I'd happily pay a 50% or greater premium to avoid the hassle of dealing with local taxi companies.


Uber got to where it is today because Taxi companies weren't able to adapt and ignored the threat until it was too late.

Really, all people want from a Taxi is an easy, reliable way to summon transport and take you to wherever. Everyone hates calling a taxi company on the phone, speaking to a surly dispatcher, giving an address verbally and then waiting for an indeterminate amount of time for the taxi to show up-- and then you had to have cash to pay.

By the time the Taxi companies figured that out, they were already gutted and in a downward spiral because of Uber's brutal, calculated competitive practices.


Taxis in Las Vegas were adding a $3 fee for paying with credit card. That was so frustrating.


On a personal note, I hope you're wrong, because Uber has added a ton of value to my life.


Yes it has, mine too, I love cheap, easy rides. What makes that possible though is because Uber is essentially selling $1 bills for 75 cents. Uber at the prices it currently charges in most markets is not sustainable.


Since Uber will predict the fare, I can occasionally AB test in NYC. The rates are basically the same as taxis now, so far as I can tell.


Will they eventually just charge that $1 or $1.10 for profitability? If so, would you still use them?


Do you remember what getting a taxi was like before Uber/Lyft? Uber is a cash burning machine for the investor, but it's definitely adding value as a customer.


It's always been my personal opinion that they should sell their software as as service to taxi companies through integration agreements. Besides the nicely subsidized prices, the act of easily being able to hail a ride is a game changer.I really don't give a shit what car I'm getting into, as long as I'm not calling some sketchy number, talking to someone I can't understand, and having it actually show up.


In some markets it is absolutely possible to summon a regular taxi via uber


And unlike the network effect where winner takes all, I doubt we'll all forget about taxis, and think, man, if only there was this yellow car I could stick my hand out to, and they'd give me a ride for cash.

There's always the thread of competition for Uber. Ironically, the thread from the very market they disrupted! I'm guessing Taxis 2.0 won't have medallions to worry about anymore, just the same regulations as any other ride sharing firm, with only one car.

But hey, I'll take subsidised rides from Uber for as long as they're offering them!


I’ve been using Uber for years. From my perspective, the experience hasn’t changed dramatically. I request a ride, a ride shows up, when I get to my destination, I’m billed. I’ve wondered why ride hailing companies haven’t dramatically slashed their engineering teams if the engineers aren’t able to map their efforts directly back to lowering ride costs. For some reason, >100% the cost of an Uber isn’t being passed on to the drivers and yet the company remain unprofitable. Where are the costs besides engineering and drivers?


I work in WeWork (not for them, my company uses them) and I think that they provide tremendous value. I don't see how they are middleman at all. Having worked at many startups and small companies over the years I know that finding a good space to work is difficult. WeWork is making it very easy and provide a lot of services on top of that which make it worthwhile. Are they unique? No, but that doesn't mean they don't provide value.


> I'm sure Uber engineering are tackling tough technical problems

They definitely are, but I think the point is that those technical problems aren’t core to the service. The value that Uber provides to you is a platform for independent, cheaper taxis – the routing algorithms and ML add to that, but the technology isn’t core to the product or the value of it.


Ellison's cat seems straight out of a Murakami novel.


You obviously don't know Ellison's cat...


Dude..Uber changed the world.


It's an unlicensed taxi. The only thing Uber has done is somehow make taxi's worse.


Idk what taxi's you used but outside of a handful of cities, getting a taxi was terrible. Even when I lived in Chicago I had to call the dispatch, who would give me a 10-15 minute wide estimate of their arrival time, and often idled at a random spot in my building and I would have to walk back and forth across the complex to find it.

Uber and Lyft are insanely better than that.


Yeah, I recall calling up asking for a ride in Chicago. It'd be someone who spoke very unclearly on the phone, "You want a pickup for 6am going to the airport? Okay" and hangs up. So...did you get that? Did you schedule it? Email confirmation? It was not great service.


I lived in Chicago for over 15 years and never had a problem getting a taxi. Plus it had the added bonus of up-front flat rates, a professional driver that knew what the hell they were doing, proper commercial driver insurance and not having to let some app harvest all my personal information and track me where ever I went.


Counter point. I've been 'scammed' by a taxi multiple times over living there 6 years, usually around new years or any big event. Things like circling the block to run up the fair, missing exits and feigning ignorance, and of course their card machine is ALWAYS down?

Imagine being a tourist in a new medium to small city and having to deal with the local taxi company. Sure you're gonna get an ok experience at some, even most, but a good portion are going to suck ass and often have no recourse. With uber/lyft I have a GPS-backed history of my route and metrics down to wait time to use as evidence and I've been refunded with no question.

Imagine trying to do that with a taxi driver, yelling at each other in a cab at 2 am, calling the taxi company who will tell u to fuck off, or calling the city and filing a case that is pending for 4 months.


I moved into an economically depressed area and let me tell you: it was hit and miss taking taxis. It didn't matter if I called dispatch repeatedly or booked ahead of time even with the more expensive car service, I could never count on a taxi to show despite the fact I was very clear about this being a coveted airport ride. Nobody wanted to pick up a fare at 4 AM in the ghetto and I nearly missed my plane more than once.

I eventually punted and had my wife drive me to the closest hotel with a cab stand. But that meant she had to get up and drive me around at 4 AM just because the cab company was unreliable.

Now with Uber not only is the car there within minutes but the charge against my corporate card is automatically sent to my corporate expense system. So no from my perspective Uber is far better! And this is despite the uber app wanting to spy on users between and after use. But that's what location permissions are for. Or just uninstalling the app entirely when not in use.


A billion rides a day in almost every single country in the world.


And losing money with every one of them!


I dont think uber is very useful outside the US


My wife's family lives in a slum in Caloocan City in the Philippines. When we stayed with them for a visit, it was amazing that I could just pull up my Uber app and get a ride to BGC, which took 1 1/2 hours. There is no other way I could have pulled this off otherwise. It was also amazing it only cost $8.


I mean, it's been very useful while travelling in countries where taxi drivers rip you off after the ride, and I don't speak the local language.


Only HN's can think their opinion is worth more than millions of people spending and earning money in more than 50 countries.


Uber has little traction in Europe for example. It seems to be a huge deal in the US though

https://www.forbes.com/sites/samshead/2019/05/10/ubers-rocky...


Uber has significant traction in Europe, thats why they got banned from several places, and Taxi cabs drivers have attacked people and set cars and places on fire.

Nevertheless globally it triumphed.


Well I've been pretty negative about Uber and WeWork up to now, but if Larry Ellison is against them, maybe it's time to reconsider.

Kidding, I'm kidding. Sort of.


He isn't the only ones to make that assessment either. I think you will find this to be a common opinion among people who are paying attention.


I feel like many people don't remember a few short years ago when your options after a night of drinking were to call a friend, wait an hour for a taxi that might arrive and definitely doesn't take credit cards, or drive home drunk.


I hate to agree with this asshat, but he's right.


Oracle Linux, its flagship database and many of their products are utterly worseless.


I don't like Oracle any more than the next person, but this just isn't true at all. Oracle is a robust product which fills an important part of any technical stack. Building and supporting databases is hard.


Now that we've nearly migrated everything off Sparc & Oracle DB I'm ready to declare Oracle almost worthless too. At last.


Considering how often they sue their customers, increase prices after lockin is established, triple their support fees, etc etc. one might consider Oracle less than worthless. Sometimes it's a liability.


At first I thought Uber will be a great business charging 20% of rides if they can ramp up to many millions of riders.

Now they squeeze drivers harder and harder for bigger and bigger percentages. Yet they are losing money faster and faster.

The problem is they’ve hired armies of very talented people, each one-upping the next on initiatives to screw drivers a little worse, or create some lame promotion, and pretty soon you have a ruthless company that is also drowning in expenses and headcount.


The is a valid point to Ellison comment regarding loyalty. If you don’t care about profit, like Uber, then you can undercut your competitors. Neither drivers nor customers would care if Uber suffers, if they can get a better deal else where.

The technology also isn’t special enough that it alone can support the massive value of Ubers stock.


Both of these companies provide a valuable service, and in Uber’s case a massively world changing one. Even if these companies only end up being worth single digit billions, they are still great companies independent of Saudi money pumping valuations into the absurd.


Uber provides great value to people like me who can't afford the burden of having a car and driving and only need a car maybe 20% of the time for various occasions. However, if Uber had to charge rates that would make them a real profit, people like me will simply no longer be able to afford it. We would go back to walking, biking, or taking the bus.

Just my 2 cents here.


Last time I used Uber? this week. Last time I used coworking space? This week. Last time I used Oracle? ...


Last time you used a service backed by a service run likely by oracle? Multitudes of times this week.


And most of those are legacy companies that are in their sunset.


And since Uber and WeWork are losing money for every ride and tenant, you are contributing to their downfall.

Meanwhile, Oracle made $3.8 billion of net income in 2018.


> [Uber has] an app my cat could have written

The other day on HN's frontpage was an article ("Software architecture is overrated") in which the author mentioned something that made me shudder:

"Rewriting the Uber app was a project that a few hundred engineers worked simultaneously on, porting existing functionality to a new architecture."

I keep not understanding how it is possible that companies whose core business is very far from IT (e.g. taxi and ride sharing for Uber, or television for Netflix) can be considered high-tech companies and take pride in investing inordinate amounts of money on engineering. What is the point? What is Netflix doing in the company of Facebook, Apple, Amazon and Google?


Uber is good only for Uber itself and (temporarily till the collapse) the customers. It is a SCAM for drivers and investors.

caveat emptor.



Isn't he a director of former?


Shortet some stock Larry, didn't we?




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