[agentofoblivion]

I remember reading plenty of thought pieces a few years ago saying this was impossible, and that Uber was a house of cards gaining market share by subsidizing rides with investor money. That there were no economies of scale to bring costs down, etc., etc. I would love to see a "what we got wrong, and what we still have right" post from one of these people, but I won't hold my breath.

[sschueller]

So you have a profitable company but at what cost? These drivers are working at slave wages unable to pay into any retirement funds or have health insurance.

In countries where there was a reasonable taxi system uber gutted them and went around regulations taking away the few guarantees the people had like a retirement and sick leave.

In the end we the tax payer have to help these people down the road when they get sick or old and all of this for the profit of a few share holders.

In Switzerland Uber still owes drivers half a billion Swiss Francs in unpaid wages/retirement and sick leave. Where do people think this missing money will come from when these people need it later on in life?

[srge]

I have met and talked to several Uber drivers and I was surprised that the « slave » narrative was totally unfounded (on that sample at least).

Drivers were generally very happy about their Uber earnings. When I realized it I bought shares and they are now at +60% over the buying price.

Let’s just be careful with pre-digested narratives. I am not saying that every driver is happy. But many are certainly quite happy!

[remote_phone]

Every Uber driver I’ve had in US and Canada are happy with driving for Uber. One guy I had the other day drives under as his second job and He says it pays his rent, his car payment and gas and his primary job goes straight to savings. The idea that these Uber drivers are slaves is a lie.

[mentos]

Devils advocate, what will these people do if/when Uber/Lyft/etc replaces the driver with automation?

[gigatree]

Well goal of any company is to increase profits, not to increase the wellbeing of its employees. So I’m sure they’re not worried about making people miserable or being a public burden.

[piva00]

It was subsidising rides, just look at the steady increase in prices, reduction in quality, while the drivers are still paid peanuts. Is this a sustainable model? We don't know, it's the first time ever a profit has been posted, what was the cost of acquiring this profit? Will it drive ridership down (due to aforementioned quality and price issues)?

You are expecting that because a profitable quarter happened, that it will continue to happen. It might as well not if the changes to bring this profit create a lot of churn, anecdotally I've been seeing this churn happen in real time around my social circle in different countries. I think we all need to wait and see what's the trend instead of jumping into "you naysayers were all wrong, haha"-rhetorics.

[altacc]

Maybe wait and see if it really is a sustainable business first. Making a profit for 1 quarter after 50 quarters of loses whilst having over $9 billion of debt isn't strong proof that it will be profitable from now on. The numbers are positive though, it doesn't seem to be just a bookkeeping profit as they have a good rise in revenue & use. Personally I think if they keep running a tighter ship than they did pre-pandemic they might make a sustainable profit. Using profits for buybacks and dividends will be more attractive to shareholders than paying off debts as that's what most have been waiting for.

[smcl]

Is a profit of $394m one quarter sufficient indication that this kind of criticism was wrong? As far as I recall, Uber lost quite a bit more money than this each year since 2016 so they'd have to repeat this a few times if we're to believe this is them hitting long-term profitability.

Also my memory of Uber critiques weren't that they'd never be profitable, but that as a business they aren't quite as unique and untouchable as their valuation suggested (which, given the number of competing companies that operate in my city, is correct).

[mjburgess]

I don't think the claim would be about quarterly profits. It has had profitable quaters before.

Consider, eg,

>Uber on Tuesday posted a profit of $394 million during the second quarter, compared with a loss of $2.60 billion a year earlier

This really doesn't answer or refute any questions around their business model.

The final question is: what's the moat?

It's trivial to create these "automate contract labour" apps, and many now exist. It seems an industry designed to reach, at its height, tiny profit margins.

I suspect regulation is heading in the direction of making it easier for people to move their data between apps too -- if that happens, the "social-data" moats of these bizes will disappear.

They'll be left with IP that teens could compete with

[nordsieck]

> The final question is: what's the moat?

I mean, it's a 2-sided market. That's inherently a moat.

There's a reason why it took Amazon to displace Ebay, and Facebook to displace Craigslist. It's a very expensive and difficult market to get into.

> It seems an industry designed to reach, at its height, tiny profit margins.

There are plenty of industries like that. Grocery, for example. That doesn't mean that the business is a bad one by itself.

> I suspect regulation is heading in the direction of making it easier for people to move their data between apps too -- if that happens, the "social-data" moats of these bizes will disappear.

IMO, that wouldn't change anything.

If I could export all of my Facebook data (maybe I can, I haven't checked), it wouldn't cause me to abandon the platform - I'm there because of the other people on the platform.

Riders use Uber because it has the drivers. And the drivers use Uber because it has the riders. The ability to export ride history or reputation isn't going to change that fact.

[pclmulqdq]

There's no foundational IP at uber that prevents a competitor from copying them (and many do), but the network effect is a non-trivial moat in itself, particularly for a two-sided market like that. Ebay has no foundational IP either, but it has been the marketplace for online auctions for a long time because of that network effect.

[mi_lk]

> It's trivial to create these "automate contract labour" apps

Just another HN Tuesday I see. It’s so easy that it’s still duopoly in US since the inception of the market.

[ImPostingOnHN]

> I remember reading plenty of thought pieces a few years ago saying this was impossible

I'm not sure many actually said that

> that Uber was a house of cards gaining market share by subsidizing rides with investor money

they were

> That there were no economies of scale to bring costs down

the criticism I heard was, at then-current prices, _profits_ wouldn't come

turns out they had to severely jack up prices to profit, proving such criticism correct

> I would love to see a "what we got wrong, and what we still have right" post

see above

[relativ575]

>> that Uber was a house of cards gaining market share by subsidizing rides with investor money

> they were

They no longer are, and they don't lose customers. So no house of cards, because they didn't collapse when subsidy disappeared.

> the criticism I heard was, at then-current prices, _profits_ wouldn't come

Turn out users don't seem to mind. Bookings is back to the pre-pandemic level. Food delivery is at the record.

> turns out they had to severely jack up prices to profit, proving such criticism correct

They are not more expensive compared to the competition. So no, the criticism isn't correct, unless you're saying consumers are stupid. If anything they were able to control cost and increase booking. People come to them despite the increased price. Keep in mind also that they didn't have major layoff like other tech companies.

[moralestapia]

Uber has burned 32B to date, so I don't think investors are super stoked now.

[fullshark]

Sure they are, after IPO they got a nifty return. Uber is a VC success story by any reasonable metric other than "was it the next google/fb/amzn?"

[missedthecue]

As long as you haven't been holding from day 1, those are someone else's losses

[jseliger]

I've not been bearish on rideshare, but Waymo is operating in the greater Phoenix area: https://waymo.com/blog/2023/05/waymo-one-doubles-service-are... and that seems like the biggest medium-term threat. It's so good!

[MichaelNolan]

It wouldn’t surprise me if Waymo/google decide they just want to remain on the tech side, and avoid all of the headaches that the operations side brings.

Waymo and Uber have a partnership. Soon in Phoenix, when you call an Uber, you might get a waymo car.

We might see a three group market:

Waymo, Cruise, etc provide the driver. Uber, Lyft provide the platform. Hertz, Avis, Enterprise manage the physical cars/cleaning/etc.

https://waymo.com/blog/2023/05/waymo-and-uber-partner-to-bri...

[Analemma_]

I still think this is true and this result is basically random noise. If they do this for another 20 years and erase the $30 billion of operating losses they've incurred up to this point, maybe I'll change my mind and do a lengthy postmortem on why I was wrong.

[spaceman_2020]

Uber will have to post profits like this every quarter for 20 years to just break even on the investment they've received.

At least in my country, the business is dead already.