[dkrich]

I’m bearish on uber because despite all of these shady tactics they are still barely profitable at the current scale and with enormous tailwinds. Last quarter they made $770 million on $12 billion of revenue. It’s just a lousy business model and they are desperate to beat Wall Street’s ever inflated expectations each quarter.

[timmg]

I wonder how automation will affect things.

Just recently, Uber (with some partner) started testing delivery robots in my (city) neighborhood. And I love Waymo, as much as I've been able to use them. Maybe automation will change the economics.

Also, IIRC, for many years, Amazon barely squeaked a profit. They wanted to be at the low end of the margins to capture market share. Once they got big enough, they increased their margins a little and started turning a big profit.

[dkrich]

I think uber is different though. It hasn’t been founder led for several years and the current ceo was hired to cut out all r&d spend and maximize profits and revenue.

They report things like foreign currency transactions and stock based compensation as free cash flow.

The hope with uber is that they become an aggregator of AVs which belies an assumption that autonomous vehicles will essentially be a commodity. Or perhaps that AVs take much longer to become practical at scale than people think.

But one of the biggest red flags to me with this company is how they aggressively buy back stock and publicly announce that they believe it’s undervalued. You’re in the midst of an extremely competitive emerging market and your best idea for your cash is to… buy stock?

[ac29]

> Last quarter they made $770 million on $12 billion of revenue.

Well, keep in mind that 7 of that 12 billion went to cost of revenue (aka money paid to drivers etc). Turning a $770M profit off the remaining $5B isn't too bad.

[dkrich]

The point is more about the profit for a company operating at massive scale- over 100 million users- and after pulling every lever to max out profit they possibly can- is only $770 million.

There was something of a red flag in that last report as well in that for the first time as far as I can tell, profit grew exactly in line with trips and gross bookings. What that implies is that the unit economics are maxed out. The business is as profitable as it can be and their only hope is to add more riders.

[CSMastermind]

That's sad because I'm happy they exist. In a material way they've made my life better. I hope there always remains a nationwide app based taxi service.

[genewitch]

What nation? They're not nationwide in the US...

[frollogaston]

Yeah I wouldn't consider it a growth stock either. But 16.24 P/E isn't that high. There are blue chips higher than that.

[dkrich]

That pe is nonsense imo. It’s based on a one time $6 billion tax credit that they included last quarter because they assume they will be profitable enough in the future to use it so are adding it into the balance sheet now.

I believe their comps are getting tougher and tougher every quarter as they aggressively drive to turn the profit spigot and squeeze more and more profit out of an inherently unprofitable business model. This is a single dimension stock that is 100% reliant on growing its user base.

They’ve been able to do that because users are aging into the platform faster than they’re aging out but eventually the well will run dry.