I've been saying that for a while. Uber is losing $800 million per quarter. They run out of cash in 2018 unless they can find a bigger sucker than Saudi Arabia's sovereign wealth fund. Uber is cheap only because investor capital subsidizes every ride. (And because they keep squeezing the drivers harder.)
IPO? They'd have to publish audited financial statements with GAAP numbers, which are almost certain to be worse than the leaked numbers. They'd take a big haircut on valuation, which the existing investors would not like. (Who has voting rights in Uber, anyway?)
Uber will probably run out of money and be picked up cheaply by some buyer of distressed companies, which will raise rates and cut it back to a profitable operation.
Lyft and Uber have wasted so much time and money. This is the problem with VC money focused on growth. There's no pressure to build anything sustainable, no pressure to build competitive advantages. Arbitrary point to point level 5 self driving is decades away. And even if it came tomorrow, what competitive advantage do these apps have? They are a single Google Maps update from being wiped out. They should've spent past few years using network effects in the same way as Facebook to protect themselves. They should've built loyalty programs like frequent miles. But they completely wasted their opportunity.
Lyft and Juno will run out of cash by the end of this year and be forced to sell to companies that won't run them at a loss, that Lyft $500 million round they are trying to shop around won't happen (that leak is a bad sign, early Lyft investors are dumping their shares on the secondary market as well) and Uber currently has billions in the bank while Lyft is down to under 1 billion, Uber will raise prices and no new competitors will be able to find any funding at this point
Such a reactionary comment. I don't think things will be quite as drastic as you claim. Much more interested in how self driving cars play out because that's the real goal they are all chasing. Finding markets and places to apply self driving cars or transportation to reinvent how transportation works globally.
I don't understand why the media and Silicon Valley seem to be gleefully awaiting the downfall of Uber. If Uber's business model is not financially viable then the free market will take care of that. But promoting the view that their "culture" is "rotten" based on a report from a disgruntled employee, or saying that their employees are being "exploited" based on one video from one driver is sanctimonious and vicious. Why is this necessary? The only answer I can come up with is that there is a political motivation, driven by neo-Marxism and the narrative that capitalism and big business are inherently evil.
I'm an Uber user, and I still love the service and the fiercely competitive way that Uber has transformed what was previously a protected and stagnant industry delivering poor service.
Isn't Uber like a Ponzi scheme in some way? They use investors money to subsidize drivers so that prices are low and they get more users, and with more users they are valued better and get more investors money. When investors money or/and user growth stops, prices go up, people stop using it, and the system collapses (or at least the user base shrinks).
Some companies just have a much bigger ramp up than others. Amazon has so many markets to build warehousing & logistics in. Uber has so many markets to establish drivers in.
The subsidising of rides makes complete sense; subsidised rides are loss-leaders aimed towards building habits. I haven't seen their data, but it seems like a good plan.
I found this article (https://www.theinformation.com/how-uber-can-drive-profits) from The Information interesting since the "Uber will get to self-driving cars which makes them profitable" is brought as an argument all the time.
TL;DR is that self-driving cars according to an internal Uber study (according to The Information) would only modestly increase their margins:
"Doing without drivers will only increase Uber’s projected long-term net profit margin by as much as 5 percentage points, according to an Uber worker who’s seen internal data projected by that team. That’s in part because of expected municipal regulations on pricing related to autonomous vehicle services, this person said. Another factor is that Uber may have to purchase and maintain its own cars en masse, rather than relying on cars owned by drivers as it does now."
I hope not. I prefer my car service provider to be ruthless, impersonal, and corporate, not lovey-dovey like the "fist bump and ride in the front seat" people at Lyft. …and there's no way I want to go back to using DC Taxis.
> If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.
I don't get the constant hype around self driving cars. Sure - they will be revolutionary when they get here - but the reality is they are years and years away at best.
We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Why do we feel a car is easier to autopilot than a plane?
And when the car autopilot technology does get here - why does Uber feel it will benefit them more than Lyft? As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles? What benefit does Uber have at that point?
I'm having trouble believing a high-flying company could really come crashing down over accusations that they are sexist assholes.
"They're a really high-pressure place, there's a lot of vicious corporate politics, and they sometimes treat women badly," could describe a whole lot of companies and institutions.
We live in a time where some of the most ridiculous services are being subsidized big time by VC cash, and I should be enjoying it while it lasts. From cheap rides to the airport, food delivery, laundry service, etc... soak it up now.
This entire thread seems to be missing the fact that during this period of us soaking it up, all legitimate competitors can't compete and will either disappear or suffer greatly.
Agreed.
Also, this is nothing new. Consumers got the same bennies in 1999. I remember getting a bunch of $1 DVDs from some Amazon wannabe (can't remember the name now). They were trying to buy customers by subsidizing DVD sales. It didn't work. The strategy was great for my college dorm DVD collection. Not so great for their VC's ROI though.
I can't provide you with exact sources, but I recall the same thing happening in Mexican indigenous villages with coca cola. Coca cola would subsidise the drink so that it is much cheaper than local drinks. Villagers give up their local drinks for coca cola. Once it has a monopoly, coca cola raises the prices. Villagers are unable to get back to their local drinks which no one makes anymore, and keep buying Coke.
These kind of things generally happen over many years, and you generally take it as one of the good things in life. Unfortunately before you know it, you are already paying top dollars, you have a multinational making huge margins on your back, and not many ways to get out of it.
The story they should have written is how Uber is going to hire with all this bad publicity? Any 'A' players are going to demand outrageous compensation to work for them now.
As for Travis himself he needs to send a plane for Jerry Colonna, startup coach to the stars ASAP.
- Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
- Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
- Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
- The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
Uber has already won, and all these stories about Uber's culture, Uber's approach to dealing with regulators, etc., are one last attempt by those who dislike Uber to gang up on it and do it harm.
Taxi and livery services, medallions, and all the corruption that goes with them are on the way out. The stories we should be reading would be about immigrants scammed by Taxi companies working in violation of medallion laws, or about the cost of an NYC medallion that keeps non-rich people from making money driving.
I don't think Uber's prices are subsidized enough that if the subsidy went away demand would be significantly altered.
Simply having an intelligent app tell drivers where to expect fares and allowing easy booking and payment ads significant value to every ride that far outweighs the small dollar subsidy Uber invests to try to win market share.
I personally use Uber far more often than I would ever take a Taxi, largely because of the incredible convenience that the app offers and the high quality of the service.
While Uber's culture could probably use some improvement, it's irritating to see everyone piling on and trying to harm one of the firms that has done the most to democratize labor and empower individuals.
The problem is that all or most of the key points for why "Uber has already won" have already been replicated by competitors.
Just for-instance, Boston Metrocab has had a functioning app since at least 2012.
It:
1) Does the same ride-hailing as Uber, in the same way, with real-time GPS locations of your cab.
2) Did not, last time I checked, did auto-pay the way uber does. Is this a hard-to-replicate feature?
3) Are reasonably clean. I find BMC cabs about as clean as Uber; NYC cabs dirtier.
4) Circular reasoning. "Taxis can't do better because they can't do better."
Really, only point 2 is valid, and it's been replicated by other competitors (e.g., Lyft).
> Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
In New York, every taxi is now hailable from a smartphone app that shows me the current locations of nearby taxis and reliably gets me one in 3-5 minutes from most places in the city.
> Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
Even if I don't hail a taxi from the app, the screen inside the car shows a code that I can use to associate my app's payment account after I get in the car. (Also, the real problem here is drivers claiming the credit card machine broke, but that's stopped happening.)
> Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
You need to clarify what market you're in. Not NYC, surely.
> The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
It fixed itself in NYC, and if it can fix itself there it can fix itself anywhere.
Seriously. I do credit Uber and Lyft with making the taxi industry realize that they're doing things wrong and have an easily-eatable lunch, but they're figuring things out. I'm more curious about places (like the college town I grew up in) that have Uber service but barely any taxi service.
Taxis are already making their own apps now in an effort to compete against uber. Medallions licences and other restrictions are gone out the window when cities allowed uber to keep doing business. Whatever monopoly they had is gone. For all the terrible things uber is, they sure disrupted the ride industry.
I see it more that Uber-LIKE services have won, whether or not that's Uber specifically or a myriad of similar companies. E.g. in Northern Thailand there is both Uber and the local version called Grab, which is way better than Uber
Those of us who have been around a while remember the black sheep of past technology eras. I always like to sum (+/-)happiness/person * num people affected by the technology]. It usually outweighs the dramatized negative points covered in the press.
I think this sentence really captures the customer's mindset with regards to Uber: "We’ll stick with Uber as long as it continues to get us where we want to go at a price we like."
As long as this argument above is true, I don't see Uber dying.
i will basically never get into a taxi again unless it is passing by and stops for me just as i need it. the price difference, if there is one, will not be a compelling reason to switch back.
Yeah, but they beat taxis on service. Ubers are computer dispatched, on-time, and give me pre-ride fare calculation. When pooling they give me guaranteed arrival times. I'm not going to use some half-assed taxi service for the same price, because I don't need the agita.
Whatever their company culture problems, I have found the service superb.
My main concern, as a potential founder, is that once Uber goes "pop" or Snap goes "fsssss", there will be the inevitable catastrophic lurch in the financial hivemind.
The purses will snap shut all at once, for good and ill. Contractions are no respecter of potential.
Their valuation got so far ahead of itself that priced into it is global domination. Now that it clearly is not a global monopoly, there's nowhere to go but down. Everyday one of their employees goes to work is a day wasted where they could have been vesting at a company which is not horribly over valued.
Disclaimer: Former Lyft engineer / stockholder here (2014-2016)
Evidence suggests that this market is changing rapidly. I have seen graphs on paid ride figures being pretty even over time, whereas standard taxi figures appear to almost universally be dropping in quantity. Might not a longer term perspective change a lot of this speculation?
Putting aside the driverless car thing for a moment, can't we at least agree for the next 3-5 years people are going to continue to require taxi-like transportation services?
Uber needs to be hacked and destroyed to finally teach its founders humility, morality and ethics. He isn't going to change until he meets rock bottom!!!
[+] [-] Animats|9 years ago|reply
IPO? They'd have to publish audited financial statements with GAAP numbers, which are almost certain to be worse than the leaked numbers. They'd take a big haircut on valuation, which the existing investors would not like. (Who has voting rights in Uber, anyway?)
Uber will probably run out of money and be picked up cheaply by some buyer of distressed companies, which will raise rates and cut it back to a profitable operation.
[+] [-] cpprototypes|9 years ago|reply
[+] [-] flylib|9 years ago|reply
[+] [-] amelius|9 years ago|reply
Is that actually legal, in light of [1]?
[1] https://en.wikipedia.org/wiki/Predatory_pricing
[+] [-] jbhatab|9 years ago|reply
[+] [-] edblarney|9 years ago|reply
If they want to be profitable, they can pull back on aggressive expansion, and dump the more expensive, less fruitful projects.
[+] [-] lucajona|9 years ago|reply
I'm an Uber user, and I still love the service and the fiercely competitive way that Uber has transformed what was previously a protected and stagnant industry delivering poor service.
[+] [-] vmarquet|9 years ago|reply
[+] [-] jfoster|9 years ago|reply
Some companies just have a much bigger ramp up than others. Amazon has so many markets to build warehousing & logistics in. Uber has so many markets to establish drivers in.
The subsidising of rides makes complete sense; subsidised rides are loss-leaders aimed towards building habits. I haven't seen their data, but it seems like a good plan.
[+] [-] mason55|9 years ago|reply
[+] [-] moritzplassnig|9 years ago|reply
TL;DR is that self-driving cars according to an internal Uber study (according to The Information) would only modestly increase their margins: "Doing without drivers will only increase Uber’s projected long-term net profit margin by as much as 5 percentage points, according to an Uber worker who’s seen internal data projected by that team. That’s in part because of expected municipal regulations on pricing related to autonomous vehicle services, this person said. Another factor is that Uber may have to purchase and maintain its own cars en masse, rather than relying on cars owned by drivers as it does now."
[+] [-] marklyon|9 years ago|reply
[+] [-] cx1000|9 years ago|reply
> If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.
[+] [-] colordrops|9 years ago|reply
[+] [-] DHowett|9 years ago|reply
[+] [-] chinathrow|9 years ago|reply
[+] [-] rhizome|9 years ago|reply
[+] [-] aarpmcgee|9 years ago|reply
[+] [-] laurencei|9 years ago|reply
We have autopilots for planes, that can effectively take off, fly, and land a plane. We've had that technology for quite a while.
So why is not common place for planes, at least cargo planes with no passengers? Surely companies like UPS, FedEx etc that have a large fleet of cargo planes that fly around the US and the world would have significant cost savings?
Why do we feel a car is easier to autopilot than a plane?
And when the car autopilot technology does get here - why does Uber feel it will benefit them more than Lyft? As soon as it is available - you'll just have Uber style copy cats with "on demand" vehicles? What benefit does Uber have at that point?
[+] [-] johan_larson|9 years ago|reply
"They're a really high-pressure place, there's a lot of vicious corporate politics, and they sometimes treat women badly," could describe a whole lot of companies and institutions.
[+] [-] sharkweek|9 years ago|reply
We live in a time where some of the most ridiculous services are being subsidized big time by VC cash, and I should be enjoying it while it lasts. From cheap rides to the airport, food delivery, laundry service, etc... soak it up now.
[+] [-] jeffhiggins|9 years ago|reply
[+] [-] oillio|9 years ago|reply
[+] [-] lopezyignacio|9 years ago|reply
These kind of things generally happen over many years, and you generally take it as one of the good things in life. Unfortunately before you know it, you are already paying top dollars, you have a multinational making huge margins on your back, and not many ways to get out of it.
[+] [-] chinathrow|9 years ago|reply
If you know and realize that it is only convenient because of VC subsidies, you know enough not to use those services since it won't be sustainable.
I try to understand each business model I support with revenue. If it's only setup to enable growth, I pass.
[+] [-] rmason|9 years ago|reply
First Uber is close to break even in the US and Latin America. They've also stemmed their losses in China with the merger with Didi.
http://fortune.com/2016/02/18/uber-profitable-us/
https://www.bloomberg.com/news/articles/2016-05-31/uber-s-fa...
The story they should have written is how Uber is going to hire with all this bad publicity? Any 'A' players are going to demand outrageous compensation to work for them now.
As for Travis himself he needs to send a plane for Jerry Colonna, startup coach to the stars ASAP.
[+] [-] grandalf|9 years ago|reply
- Nobody who lives in a market that Uber serves will ever be willing to go back to the old way of calling a taxi dispatch line by phone, waiting on hold, and being told the cab will arrive in "five to thirty minutes". Seriously. Think about this.
- Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
- Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
- The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
Uber has already won, and all these stories about Uber's culture, Uber's approach to dealing with regulators, etc., are one last attempt by those who dislike Uber to gang up on it and do it harm.
Taxi and livery services, medallions, and all the corruption that goes with them are on the way out. The stories we should be reading would be about immigrants scammed by Taxi companies working in violation of medallion laws, or about the cost of an NYC medallion that keeps non-rich people from making money driving.
I don't think Uber's prices are subsidized enough that if the subsidy went away demand would be significantly altered.
Simply having an intelligent app tell drivers where to expect fares and allowing easy booking and payment ads significant value to every ride that far outweighs the small dollar subsidy Uber invests to try to win market share.
I personally use Uber far more often than I would ever take a Taxi, largely because of the incredible convenience that the app offers and the high quality of the service.
While Uber's culture could probably use some improvement, it's irritating to see everyone piling on and trying to harm one of the firms that has done the most to democratize labor and empower individuals.
[+] [-] arkades|9 years ago|reply
Just for-instance, Boston Metrocab has had a functioning app since at least 2012.
It: 1) Does the same ride-hailing as Uber, in the same way, with real-time GPS locations of your cab. 2) Did not, last time I checked, did auto-pay the way uber does. Is this a hard-to-replicate feature? 3) Are reasonably clean. I find BMC cabs about as clean as Uber; NYC cabs dirtier. 4) Circular reasoning. "Taxis can't do better because they can't do better."
Really, only point 2 is valid, and it's been replicated by other competitors (e.g., Lyft).
So what's Uber's moat?
Oh, yes, unsustainably low prices.
[+] [-] geofft|9 years ago|reply
In New York, every taxi is now hailable from a smartphone app that shows me the current locations of nearby taxis and reliably gets me one in 3-5 minutes from most places in the city.
> Nobody used to Uber will want to waste time taking out a credit card and swiping it through a dirty slot or handing it to a driver only to wait several minutes for it to finally go through.
Even if I don't hail a taxi from the app, the screen inside the car shows a code that I can use to associate my app's payment account after I get in the car. (Also, the real problem here is drivers claiming the credit card machine broke, but that's stopped happening.)
> Compared to the average Uber vehicle, most taxis are filthy and full of all sorts of odors.
You need to clarify what market you're in. Not NYC, surely.
> The taxi/livery industry is simply too used to enjoying a monopoly business to be able to fix itself.
It fixed itself in NYC, and if it can fix itself there it can fix itself anywhere.
Seriously. I do credit Uber and Lyft with making the taxi industry realize that they're doing things wrong and have an easily-eatable lunch, but they're figuring things out. I'm more curious about places (like the college town I grew up in) that have Uber service but barely any taxi service.
[+] [-] ramy_d|9 years ago|reply
[+] [-] spraak|9 years ago|reply
[+] [-] unknown|9 years ago|reply
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[+] [-] jnordwick|9 years ago|reply
[+] [-] HeavenBanned|9 years ago|reply
[deleted]
[+] [-] billions|9 years ago|reply
[+] [-] edshiro|9 years ago|reply
As long as this argument above is true, I don't see Uber dying.
[+] [-] rocqua|9 years ago|reply
Besides, #deleteuber shows that bad PR has at least a marginal effect.
[+] [-] elmar|9 years ago|reply
[+] [-] spullara|9 years ago|reply
[+] [-] arjie|9 years ago|reply
Whatever their company culture problems, I have found the service superb.
[+] [-] seppin|9 years ago|reply
just no 50b valuations
[+] [-] wtvanhest|9 years ago|reply
[+] [-] jacques_chester|9 years ago|reply
The purses will snap shut all at once, for good and ill. Contractions are no respecter of potential.
I'd really like to get in before last call.
[+] [-] dkarapetyan|9 years ago|reply
[+] [-] apapli|9 years ago|reply
[+] [-] jonthepirate|9 years ago|reply
"Ridesharing" as we know is it going to crash https://news.ycombinator.com/item?id=13762242
Their valuation got so far ahead of itself that priced into it is global domination. Now that it clearly is not a global monopoly, there's nowhere to go but down. Everyday one of their employees goes to work is a day wasted where they could have been vesting at a company which is not horribly over valued.
Disclaimer: Former Lyft engineer / stockholder here (2014-2016)
[+] [-] frik|9 years ago|reply
[+] [-] tlow|9 years ago|reply
[+] [-] chaser7016|9 years ago|reply
[+] [-] unknown|9 years ago|reply
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