Uber Posts $5.2B Loss and Slowest Ever Growth Rate
nytimes.com
nytimes.com
For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too expensive.
(Comment that I already issued yesterday on a similar thread)
The line item in Uber's results you want to look at here is "Excess Driver Incentives" which covers:
"Cumulative payments to a Driver could exceed cumulative revenue from a Driver as a result of Driver incentives or when the amount paid to a Driver for a Trip exceeds the fare charged to the consumer."
What's really interesting here is that year over year this number went down substantially ($21m total) for their "Ridesharing" eg their core platform is subsidizing substantially fewer rides today as a percentage of overall revenue than it was a year ago.
But that total "Excess Driver Incentives" line item exploded upwards from $221,000,000 to $544,000,000 for just their uber eats platform!
That means that your rides were somewhat subsidized and getting better, but your hamburger's ride was subsidized to the tune of a half billion dollars :)
And further qualifying this the Uber Eats business unit doubled in revenue but the incentives grew at an even faster rate.
https://investor.uber.com/news-events/news/press-release-det...
Not spending billions a year on R&D certainly makes the financials look nicer. It might not attract as nice of a multiple, but it's not the ride prices that are out of whack at Uber IMO.
Also Uber as a company has zero experience of owning and maintaining a fleet of vehicles. They’ve entirely sidestepped that problem. What evidence is there they can do it better than anyone who does do it, like say Hertz?
Autonomous vehicles will never work in the chaos of Delhi or Jakarta's traffic
I sincerely hope they weren't expecting any revenue from those for the next decade or two. Anything else would be delusional.
I personally agree it's a multi-decade (if ever) thing, but if Uber et al. claim they'll have it in 2 years, without facts on the table it boils down to who the investors believe in.
Virtually all of the cab companies still around now have mobile apps and many of them have all the features that Uber/Lyft have (card payment via app, car-tracking, etc).
It's still a win for the consumer, even if you're using old school cab companies.
However, I also have to acknowledge that I think I'm an outlier, because I have many friends (most of whom could easily afford it) who complain about prices every time this topic comes up. I think that as a society we'd be better off if people could truly internalize the truth of "you get what you pay for," and stop buying solely based on price, but that's not the world we live in.
As for a ~30 second call resulting in a success story, that does sound pretty good indeed.
Let me tell you what my decades of taxi ordering experience in Estonia looks like. I call a taxi company [1], wait about a minute, nobody even picks up the phone. I try another company. I finally get someone to pick up, I tell them where I am, and they proceed to tell me that they have no taxis available. I have to call a new company. Eventually when the 5th company promises to send a taxi, there's a greater than 10% chance that they never show up. Sometimes I call the taxi company and they say the driver went on a break. Other times they say the driver picked up someone else on the way to my location. Sometimes the company has no clue whatsoever why the taxi didn't arrive.
With this old system, whenever I was in a rush, the most time-optimal plan was to run to the closest taxi stop and physically find a taxi.
The arrival of Uber & friends has mostly removed this nonsense. It's all so much more reliable. Although not 100%, sometimes when I'm ordering from a suburb, the driver will call me and ask if I'm willing to pay extra in cash for them to come out. If I say no, they cancel the order.
--
[1] All these calls are to reasonably priced taxi companies, similar to Uber pricing. If I were willing to pay 3x price, there are plenty of premium taxi companies who will come and roll out the red carpet in exchange for your wallet.
I don't mind cash but I rarely have it on me.
Baloney. The market size of people willing to pay taxi rates for transportation is much smaller that the market sizes currently implied by Uber and Lyft's valuation. Before Uber and Lyft, most people I know would only take taxis very occasionally, for special occasions or emergencies. Once Uber and Lyft started offering such good rates they would use ride sharing much more often.
Consider all the places where you needed a taxi but wouldnt know how to hail one -- Uber/Lyft expanded the market here.
I was recently in Taiwan and needed a ride, but could not describe the address to a driver who did not speak English. Uber to the rescue -- again the market got expanded.
It isnt all about cost.
Not having to deal with (local) cash or a constantly “broken” credit card machine are also pluses.
The only time I've been in a situation where I needed to take a taxi but didn't speak a common language was in Paris. I simply showed the driver the address as written and he got us there with no problems whatsoever. Granted Paris is pretty easy that way as rides (both taxi and Uber) from the airport are fixed price.
Alternatively I bet just pulling up the location on a mapping app would be enough. Of course in most countries I've been to, the public transit infrastructure was good enough that I never wanted to bother with a taxi of any sort.
Kinda sucks to see as I think the idea of the service is good.
Even if rates went up to what cabs were (still cheaper in SF in my experience), I wouldn't switch back to cabs. I'd still user Uber/Lyft for the convenience and higher quality product.
Are those stories very uncommon, or does the cab market in SF etc. manage to be even less quality?
Round here, a cab is at worst an 8 year old Toyota Prius, at best a new Mercedes or a Tesla, and the cab companies all have apps that let you book rides and see where the car picking you up is right now.
Only until Uber and Lyft run out of cash (a few more quarters based on cash on hand), at which point taxi fares will rise to properly reflect the actual cost of the service.
People will choose a combination of walking, public transit, traditional cab companies, and perhaps an e-scooter and/or bicycle. We lived before Uber and Lyft, we'll live after them. Fun experiment while it lasted.
It is not an understatement to say that I hate traditional taxis. I hate the terrible service. I hate having them refuse fares based on where I'm going. I hate calling to schedule a pickup in advance and the driver just not bothering to show up. I hate being pressured to pay in cash instead of credit card and having them berate and insult me when I insist on card. I hate having to be on alert to see if they're taking a deliberately longer route or running up the meter. I hate the verbal and sexual harassment they have doled out to me and my friends with no consequences, because there is absolutely nothing in their business model that provides them any incentive to treat their customers with courtesy and respect.
I want to see taxis crash and burn, I want to see them fail, I want to see them removed from my experience on this earth. I don't think I'm alone in that, and I will continue to use Uber and Lyft and pay far more than taxis because they provide an exceptionally better service.
Also Uber Pool/Lyft Line are brilliant and taxis will never bother to replicate that kind of efficiency.
- Accusations of racism
- Dangerous driving
- Detours/no idea where they're going
- Being held hostage (took 4 very strong demands to be let out)
- Given a lecture because the driver couldn't find the address and told if you don't like the service to get out.
The grass isn't always greener
The cat is out of the bag. Nobody is going back to taxis.
Not sure if I agree. The convenience of the Uber/Lyft app's is still superior to a taxi service in most cases. The only time I'll take a cab is if it happens to be right in front of me and I'm in a hurry.
The blitzscaling strategy might in fact work but it would effectively be an end to democracy. We would basically have a marketplace of ALL monopolies.
It just doesn't scale.
ie, core business prints money.
Getting out of fidi at 5pm can sometimes be slow w/ pool (20+ min wait), especially if the driver gets stuck in traffic e.g. on bush leading to market because of some rando accident on 101. Taking an uber at any other time or location has mostly been fine for me (5 min wait times tops), and it's not that uncommon to have 5 min wait times even out of fidi at 5pm.
I will say though, the huge benefit now is their rewards have a "price protection" [1] for some tiers that allow for a cap on that ride price, so I think it can no longer go above $10.99 or something. That has helped a ton from it getting higher. But that's only available for some of the higher tiers in their rewards program, I believe.
[1] https://help.uber.com/riders/article/price-protection-on-a-r...
Also, as I mentioned in another comment, it's just rides to work in the morning. I take public transportation home after work.
Then it was changed to $5. Then it was changed to $6, or instead you could UberPool for $2. Then they added a 2 minute waiting period for an UberPool. They then also changed the flat fare altogether and instead your ride pass came with something like 50% off all rides, with a maximum $6 discount.
It's obvious what would happen. At least my friends and I got it while the getting was good.
I took a Lyft a month ago during peak times and it was $40, so it's still significantly cheaper for me.
By charging $4.00 more than the cost, you’re freeing yourself up to do other things during that time. Is your time really not worth $4.00?
This is particularly important for industries with large network effects like ridesharing.
What's been the alternative? Regular taxis? Aren't they just as expensive?
My issue was always summoning the taxi. I was generally operating in secondary markets like Las Vegas off-strip, San Diego, or Pittsburgh. You couldn't schedule your trip to the airport because you never knew when the stupid taxi would show up.
While I hate many things about Uber/Lyft/ridesharing, they changed the customer service expectation of the whole field. Even if the prices go back to taxi levels, that's a massive improvement.
If I go somewhere where it's a pain to park occasionally I will use Uber instead.
Similarly, if I go out I could make a choice of being very conscientious about how much I drink (and thus drive) or take an uber and not worry about being too buzzed.
There's also (gasp) public transit (and bike share).
To answer your question: I bike, use my car or use electrical scooters. I still use Uber but when I really have to (maybe once every two weeks)
I took my first Uber in 2011. It was amazing. Expensive, to be sure, but the service was amazing. Black Sedan, extremely professional, shows up wherever you want, drops you off wherever you want, never really had to look at GPS. Just amazing.
It was so good I figured I'd never need car again. But it was expensive, so I used it sparingly. I'd take public transit or walk most of the time, but when I needed to get somewhere that didn't go or I needed to get somewhere fast, Uber was there.
Now it's a joke. A total joke. The service is shit. The base tier has people picking you up in minivans that rattle like they are about to fall apart and the people can barely drive… if they pick you up at all. There's like a 50/50 chance it will take 15 minutes for a pickup because the driver will go in the completely wrong direction and then cancel the ride. The "premium" service tiers come with fancier cars, but most driver still have no idea where they are going.
It was good when it was small. It was good when they only had professional drivers with carrier passenger permits and commercial insurance. It made sense. It was good for everyone. It was good when they actually had "drivers", not random people struggling to make minimum wage.
I also try to avoid it.
There are also still plenty of black car services around if you are concerned about loss of quality in more affordable offerings (where did you think the tradeoff was going to be for a more affordable solution? Purely scale?)
I didn't think there was going to be a tradeoff. There was never supposed to be. The idea that random people would drive others around was never part of Uber's business plan, that's why it was called "Uber" to begin with. It was never part of anyone's business plan—it was illegal.
Lyft came along and just started hiring random people with no passenger carrier permit and no insurance, and then Uber had to compete with that nonsense and that nonsense somehow just became legal because "it's an app" was a valid defense and the CPUC went along with it because it became too big to ignore or outright ban.
> It's just a random guy with a more expensive car.
The big one is they are required to be commercially registered and commercially insured. At least here in Chicago it's usually the private chauffeur's with a livery license plate in sedan/limo. I'm guessing they do Uber black on the side.
Anyway, yes they are "just random guys" just like any other Uber driver but they've had to jump through extra hoops which affects who does it. I'm not saying that causes a better selection but there is specific difference between the two, other than just requiring a better car.
I like to compare them to the car sharing companies (like zipcar/car2go etc...) which managed to de-throne the entrenched rental agencies without going out of their way to break laws.
After making my request, a few cab companies simply answered "Ok" before hanging up. I called them back to get an ETA, and their dispatchers would give me answers like "30 to 40 minutes" or "I don't know".
I wasn't out in the boonies or anything. I was downtown.
Chicago did not have this, and when Uber offered UberTaxi it really was the best of both worlds, for a small surcharge on the normal cab fare.
Cab companies refusal to acknowledge this means they deserve to die. The economics are there, an app is undeniably cheaper, at some point, than a call center, and fundamentally whatever prices Americans pay to cab companies is clearly enough to sustain them, so it should in theory be enough to sustain an Uber-like company.
And let's not even get into the conversation about servicing more rural areas, where ZERO cab companies exist, but Uber drivers do. That is a net value add to those communities, no denying.
I used a small family taxi company. I had to book in advance, or be prepared for a short wait, but they understood my father in law needed some extra time and understood his requirements. Ubers on the other hand are awful with disabled people in my experience.
Luckily the excellent public transport makes up for it. But there are still many scenarios where Uber is a welcome addition.
Uber solves that.
At least in Germany, my standard way of getting a cab (wherever I want) was calling one of the dispatch centres.
Taxi-hailing apps made this slightly more convenient, and displaying the cab's route to you removed some stress, but it didn't fundamentally alter the service.
And Uber really doesn't add any value except for undercutting prices by subsidising the rides via investors and shovelling risk etc. onto the drivers.
Before Uber, taxi medallions in New York were selling for around $1 million. These pricey medallions tended to get bought up by large companies that could afford the investment. Your driver likely couldn't afford one, so instead, drivers would rent a cab and medallion for about $100 per 12-hour shift, on top of the dispatcher fees.
This system was supposed to restrict the supply of cabs to ensure drivers earned a decent wage. Instead, all the value is extracted by the medallion holders.
Still, that doesn't mean rainbows come out of Uber's bum - it was absolutely a market ripe for new competition, Uber just added that competition in a terrible manner.
What regulations are these? Is there any case where taking taxis was or is safer for an average customer than Uber?
E.g., UK https://www.gov.uk/taxi-driver-licence/outside-london; Germany https://de.wikipedia.org/wiki/F%C3%BChrerschein_zur_Fahrgast...
That certainly doesn't stop them from speeding, cutting you off, going straight from right turn lanes and generally driving very aggresively. Cab drivers are really one of the worst when it comes to following traffic rules, second only to urban bicyclists.
Except for the fact that Avis bought Zipcar. So not sure about the dethroning part.
I know some folks who really depend on short-term rentals to support being carless but it's a relatively niche service--especially with current Uber/Lyft pricing.
Where gig economy = padding the loss of decent jobs by replacing the bottom end with desperate deals where "non employed" employees, without regular salary, benefits, company provided work tools, etc., make a pittance, while the organizing company gets a cut from millions of transactions.
In some cases, no jobs is better than subsistence/dead-end/exploitative jobs. At least the former makes the problem evident, and ups the pressure to do something about it on a society/policy/economy level -- as opposed to helping perpetuate it.
Here, the rise of the gig economy came from automation. Not in the caricature sense that there are robot automatons that serve your plates in a restaurant, but in a sense that scalable automated processes replaced human dispatchers that answers your phone calls at the taxi companies and radios drivers to pick you up, and automated processes that replaced taxi drivers wandering around aimlessly on the street trying to pick people up.
Here we get higher productivity but it's also a powerful hegemonizing, monopolizing, wealth concentrating force where the controllers of these automated processes, which scales globally at low cost, can skim value-add (that used to be done by more people with jobs) from the transportation and other needs everywhere.
But the solution isn't to break them up and for society to become unproductive and un-automated again by forcing minimum wage, health insurance, guaranteed menial jobs etc. Whether we like it or not, taxi radio dispatchers is never coming back as a mainstream job that can be the bedrock of local communities again.
Instead, we need to start having discussions now about the fundamental way how we structure human society in a world where more and more of this planet's 'productivity' is concentrating more and more in the hands of those who produce the AI automations. This is nothing short of answering the question of why we're alive. Right now, our sense of purpose comes from trading our muscular and mental power during life on this planet for GDP. If that's the metric, our muscular and mental powers' productivity vs AI will lose (maybe in 5 years, maybe in 10 years), and by implication, we lose our purpose for living. We need to stop pretending there is an artificial scarcity of productivity and change the purpose of life.
This is a Sanders vs Yang timeline of solving the problems we need to solve in the next 5 years vs solving the problems we need to solve in the next 20 years.
To me, the central problem is wealth disparity as a proxy for power disparity: our democratic government is more than capable of addressing our ongoing needs and desires if not for the overwhelming, unjust, and unearned influence of the wealthy.
This is why I think Sanders has the correct prescription and Yang is naive: the solution isn't a policy or set of policies to fix specific problems, no matter how farsighted, it's restructuring our political system to be solely answerable to people who it feigns to represent.
This isn't an AI problem. This is an owner vs. employee problem. Advances in technology accrue to the owners at the expense of the employee. This always happens because employees sign over rights to their innovations to the employer in exchange for a short term need for money.
Most people never take the time or spend the money to invest in themselves.
What will happen to a society where every single person has their basic needs met by some form of automation, and nobody needs to work?
I would say most first world countries are already in this scenario if so much money wasn't spent on non essentials. Industrial scale farming, mass produced pharmaceuticals, rapid house construction etc. mean that if a society wanted, you could have 10% of the population providing for the 90% (an inversion of what was the case for most of human history).
There is no precedent or example from history to show us what this will do to society. How will humans cope with not actually needing to do anything? I personally envisage a Matrix like scenario where this societal change will also usher in advances in VR and related tech. People may spend most of their time engrossed in entertainment, until eventually, they see no need to participate in the real world at all.
I don't know if you know anything about 1990s-early 2000s artificial intelligence research, but the vision of the future back then was artificial agents communicating through standardized protocols to negotiate for goods and services.[1] So, a decentralized dispatching system. What you are saying is false dichotomy monopolist propaganda. There is no technical reason why the only choice is between Uber and manual dispatching.
[1] I spent a few summers as a research assistant working on multi-agent systems. Feel free to object with "but, it's not technically feasible because X, Y, Z." I can probably refute most technical reasons and provide a good explanation.
Sometimes I think folks who think like this really need to get outside more. Yes, a lot of things are being automated, but (a) consider the janky quality of automation, because it's really not mature yet even in purely-software environments where everything can be controlled, and (b) consider the raw cost of doing it vs. the productivity savings and side effects. It's just not worth it for a lot of things and won't be until we have general-purpose AI and general-purpose robotic workers that can take on human-scale jobs. Even then, it might still be cheaper to get actual people in a lot of cases.
But even if so: as someone who implements something you might call automation, like most here, I have to ask: why is it exactly that I should owe a massive amount of my economic output to those who aren't outputting anything? At what point do I simply say "fuck it" and stop working too, because some ridiculous percentage of my income has to be applied towards feeding those who won't/can't/don't do anything productive?
UBI is a patronizing and elitist social welfare pipe dream to address a problem that doesn't exist. as silly as 'social media influencers' may be, they're an apt example of how the world changes in unexpected ways to accomodate the ambitions of some of the billions of people on this earth with active brains and pumping hearts.
We are not sophisticated enough to get roads fixed and keep the water supply clean. Long way to go. Don't fall for people who tell you it can happen faster, until they have fixed the roads and cleaned the water in one town.
Climate, healthcare, immigration, requires focus to fix correctly
Sure, but neither you or I get to decide that qualification. Only the person doing the job does. We don't really know what fits their lives or what options they have.
I don't like gig stuff/sharing economy (or the big 'unicorns' associated with it) either...but it is "another option" for many people that wouldn't have one, esp. lower skilled immigrants, minorities, retired and young people.
“For some people it’s better to have no job than a bad job”
(Maybe that’s true but as you say it’s their choice to make)
He is saying:
“For society, it’s actually harmful that we paper over the cracks of giving people on the margins of society confidence in how they can economically contribute and get meaning with unsustainable “jobs” rather than society actually being forced to confront this problem”.
That is what we have regulations for.
Do you know and understand what is in your shampoo bottle? What a car needs to come equipped with, not just in obvious safety features but also in its deeper and detailed implementation, to be safe for normal use ("normal use" itself being something you get taught in driving school)? How to build your own house, or even just how to recognize that a building you enter will not fall down onto your head?
I, for myself, am very glad that regulations allow me to just assume certain ground truths in avoiding negative impact, without having to be an expert in every little thing that touches my life.
The reason they drive for Uber is not a lack of skill. It's because they ran out of money and needed a job. Often having skills doesn't translate into having a good job. Good jobs are a limited resource per area and field.
I strongly disagree with this position. Yeah, sure, supporting people at the brink of poverty is one of the government's responsibilities, but taking away one of the few options they have goes in the opposite direction. Most of these gig-economy jobs differ from a regular job in that they're much easier to get, at least in most parts of Europe. If you meet a few basic requirements you're in. For people at risk, mentally ill people, and plenty of other segments of the population this is a real lifeline that they're not getting from anywhere else. This is keeping a roof over they head and food on the table.
Obviously, they're doing it because they can't get a better situation. Taking this option away is making them a lot more vulnerable, and doing them a lot of harm. It's not like they don't realise they're being exploited.
Sure, they should be supported etc. But that's just "shoulds", policy is difficult. For many, this gig-economy is an actual lifeline, that exists right now.
See the hospitality industry for an example. They have tips, so they don't get minimum wage.
The US government is famously bad at protecting people who need it. Anything which disguised that fact, even a little, should be removed.
the real tripe in the gig economy is all the pontificating coming down from top how they all care about rights of people, except it only is Western people they care about while those in China and other countries get run over by their governments.
The simple fact is, no employer has to make the job solve all your financial needs. It is up to you to find the job that fulfills your requirements and you can perform safely and well. if that takes more than one job then so be it, many of us have been there before and did it. you don't get anywhere waiting for someone else to fix your life
Maybe because they didn't do the math on the depreciation of the vehicle + maintenance + car insurance with ride-sharing waivers vs. the income they receive from ride sharing. Then maybe we'd see a different opinion from drivers.
No amount of hard work buys you the right to hire around wage and employment laws.
Uber is not a real business. Nothing about hiring a driver or maintaining or running a car is cheaper now than before Uber. Uber will never be profitable unless people are willing to pay the same amount as for regular taxis or for a private driver (i.e. expensive).
Airbnb on the other hand is a real and vastly profitable business. Yes there need to be tighter regulations because we don’t want Airbnb everywhere. That will have a non-trivial effect on its business. But even after regulation it remains a very profitable and highly appealing consumer and business product.
The other difference is that Uber just gets you from A to B. I will never remember the car nor the driver. Even if the driving experience is great, I won’t be telling my friends about it.
Airbnb on the other hand provides memorable lifetime experiences.
No comparison.
I will never forget the truck, driven by a young man from Haiti whose temporary protective status was days from expiring, that had a hole rusted through the floor pan. It was a scary ass ride, but I genuinely felt he was getting as much as he could before having to go home.
I'll never forget the asshole from NJ who decided that, because we were both white, he cold go on a crazed anti-semitic rant about his home owner's association.
I'll never forget the driver who pulled his SUV over, went around the back, and took a leak--on a busy street in Philly--into a plastic bottle he had back there.
I'll never forget the young woman who couldn't hear me yelling at her to turn her music down, only to find out she was whacked out of her mind.
I'll never forget the interesting ride my wife and I had with a guy who paints commercial aircraft for a living. My wife works in aerospace, and previously in general aviation. Hearing about his contract work was pretty neat.
I'll never forget the older woman who only drives on Fridays to make enough money to go to the movies with her friends and buy popcorn. I was back-and-forth between home and away at the time, and she actually offered to let me join her and her friends at the movies that night because my wife was away and I had nothing better to do.
There are definitely forgettable rides. But I've had a good share of memorable ones myself.
It pays to be human.
Let's jump to Washington D.C. If you live in Northern Virginia or Maryland, you could take the Metro into town for a night out, but would almost certainly have a huge issue getting a cab driver to take you home.
Let's jump back to SF. North Beach to the Mission district. Separate sides of the town but without a cab, thats 2-3 bus transfers and forget even getting home late at night when it all stops running.
The accessibility aspect of Uber is massive. I don't think it's fair to discount that simply because the ride itself wasn't memorable...by that aspect, are airplane companies fake businesses? Does anyone really brag about the wonderful economy experience they have on Delta vs. United vs. American Airlines? Not really, but they certainly talk about the accessibility those services offer.
Uber can use better scheduling algorithms to ensure higher utilization factor of their fleet. If a taxi driver is driving 50% of the time and waiting for a fare other 50%, while Uber driver is driving 90% of the time and waiting 10%, the price for Uber ride could be lower while ensuring the same income level for the driver.
It's even worse, outsourcing maintenance, insurance, upkeep and whatnot to individuals is on the aggregate more expensive and time consuming than having a division of labour and a company who can manage these costs in bulk.
If you were disabled, or in an urban transit desert or underserved community, then ridesharing is the direct bringer of new B's. That's the reality for a ton of people. This is not fringe. Many people were underserved by taxi's before, and this is huge for them.
https://www.citylab.com/transportation/2018/06/lyft-is-reach...
Im not a fan of uber nor lyft, although I have to say I like the competition they offer. I hope Tesla delivers their Robotaxi and slashes the whole taxi pricing game.
How come? It seems like a great company to me.
That, and I firmly believe Uber still deserves to be punished for its past bad behavior on so many fronts. I used to feel for the people working there that didn't contribute to the problem, and worry that any punishment too draconian would hurt them, but Uber got away with stuff so bad for so long, that I think anyone that didn't vote with their conscience and try to find somewhere else to work was taking a calculated risk, and it's not a risk if there's no chance of a negative outcome, so they reap what they sow. Anyone that didn't make the choice to leave ended up contributing to the problem by allowing Uber to ignore the consequences.
The solution is improving contractor employment laws and services to reflect new reality of the economy (technology lowering the barrier to join a contractor or temp jobs increasing their quantity). Not trying to end something that's not going away and many people find useful but making being a contractor not being treat as the bastard child of employment but a standard means of work.
In Canada you can't get proper unemployment benefits if you're a contractor (and you don't have an option to volunteer into one, you'd have to do it yourself), so if you get seriously sick, as what happened to me, you're S.O.L. for even basic money and have to depend on family. Between that, universal healthcare coverage, and stricter rules on what's defined as a 'full-time job' and you'd eliminate most problems.
If you think that's bad, wait until you find out about the small business economy. Millions and millions of people run small businesses that end up losing money over the whole year and they have to pay for their own healthcare.
I can't wait until we legislate away these stupid people who currently have the autonomy to act as independent businesses.
The funny thing here is that, apparently, the "non employed employees" were still getting more than what they actually earned the company- which therefore isn't getting a nice cut, but rather a debt, from millions of transactions. So this looks like VC-founded low end jobs.
For me the issue is unreliability of Services like UberEats.
Remember how amazon was never profitable for years and everyone missed the boat on crazy upside. Remember Tesla ? Remember facebook and twitter before they started making money on ads ? Just because of 2 quarter loss you can’t expect uber to shut down. Not even close, their product teams are already figuring out where to get more money from.
Its a different deal If you hate uber and want it to shut down but otherwise this is business as usual. I can’t imagine my life without uber.
You literally can't imagine your life, if say, you lived in Vancouver?
Uber et al make convenient villains (and for I don't by any means think they are innocent), but we should also recognize the consequences of our collective choices.
Maybe UBI won't provide a livable income, but might enable "gig workers" to survive with a dignified standard of living.
I guess it’s possible that Uber does so badly financially, they cease to exist. I just find it really hard to imagine that they would be forced to raise prices enough to make the old days of taxis you hailed by waving your hands on the street come back. So to me, Uber doing badly is just bad news for their drivers.
If Uber were to "squeeze drivers", drivers would stop driving for them. They'd drive for Lyft. They'd drive for some other company. They'd stay home.
The supply would crash.
They have no choice but to raise prices.
Assuming the compensation was for a business need (like hiring labour or purchasing something necessary) then I don't see how that should be isolated or differentiated from regular costs of running the business - assuming it wasn't a business need (and was more of a way to game the stock price) then I'd assume whoever made the decision to take such an action when Uber is already losing money hand-over-fist is just trying to get out some loot while they can... which is potentially an even more extremely bad scenario to accept.
First, the 3.9B figure appears to represents all RSUs vested up to this point, aka many years worth ("(2) Q2 2019 includes $3.9 billion of stock-based compensation expenses, primarily due to RSU expense recognition in connection with our initial public offering"). That's why its slightly misleading - its many years worth of stock comp for employees which is all getting recognized this quarter (Happens in pretty much all the big tech IPOs)
In general though, its very reasonable to associate that as an expense, which is why GAAP requires it. Where that gets complicated is that its not an immediate cash expense to the company, hence some fudging around with non-GAAP accounting which is seen by some companies.
I am pretty personally wary of stock based compensation in non-publicly traded companies since it's a gamble that the employee is accepting that is entirely controlled by the company - bad business decisions can cut your compensation through no fault of your own if the company goes bankrupt.
I'm not sure when the accounting laws changed to include SBC (probably post-financial crisis), but it's weird to include it in an income statement as if it was a cash expense. You can find articles from accounting experts arguing both ways if you are curious.
e.g. http://aswathdamodaran.blogspot.com/2014/02/stock-based-empl...
More to the OPs point, I'm guessing Uber had FB-style RSUs that don't settle until an IPO or Change of Control. I'm not sure how this all gets accounted for, but given the recent IPO, it sounds like they booked a very large SBC charge this quarter to account for the immediate hit of all the previously issued RSUs finally being settled.
Going forward, the number of RSUs that settle each quarter would therefore presumably not be nearly as large.
But I'm not an accountant so the above may be wrong.
There isn't much to disagree about. It's a real cost against shareholders (that's what Buffett is talking about) and it is not an expense against the business operations such that it depletes your cash or harms cash flow (the point a parent comment was making).
Putting it broadly, stock compensation is primarily a hit against existing shareholder ownership. It debases their ownership of present or future profits.
Uber could simultaneously produce $5 billion in positive cash flow from operations and issue $20 billion in stock every year to employees. They'd have a profitable business at the operational level and be drowning shareholders in dilution.
But mostly post dot-bomb. It's one of the reasons you see a lot of RSUs at bigger companies today rather than traditional options. FAS 123(r) was the first major rule. This came about because companies basically were treating stock options like they were free money from an accounting perspective.
One time loss is fine to ignore, but one should still look at the remaining 1.3 billion loss including routine stock based compensation.
>We incurred operating losses of $4.0 billion and $3.0 billion in the years ended December 31, 2017 and 2018, and as of December 31, 2018, we had an accumulated deficit of $7.9 billion.
Now they have accumulated a deficit of $13.1B. You might say, well they shrank their loss from $4B to 3B to $1.3B (giving you the extra $3.9B one-time stock comp). Except one has to keep in mind they cut expenses and raised fees in that stretch in anticipation of their IPO, so its literally the best they could do...only lose $13.1B over 3 years.
Investors and Founders made their money, Uber is now for the plebs to figure out how to salvage and milk. It will just be a long and painful death from hereon out, but the market will remain irrational to allow Investors to save face so they can run the same Startup/IPO unicorn scam on the public to cash out.
However, instead of the long painful death, an alternative now that the Investors are out, we may see the regulators finally "catch up" and properly classify Uber drivers as employees not independent contracts and the bottom give out.
(Self driving cars were never going to save them. Not only do they not work yet, there's no reason to think they'd be much cheaper for years to come. Uber would have to pay for them, garage them, maintain them, operate control centers, etc. They'd be in the car rental business, which is not hugely profitable. Uber's business model is to dump their operating costs on their drivers. With self driving cars, they couldn't do that.)
Apparently Lyft upped its guidance, and Uber stock took off today; it was up 8.25% percent from yesterday. As of right now, it's now down 10% off closing to 38.66, a value it hasn't had since... last Wednesday morning.
Disappointing if you're a holder, sure, but not as catastrophic as you'd think if you only read this news.
(To the extent I have bias here, it is bias against trying to judge stock performance only by reading about its massive jumps up or down. Uber I'm not a particular fan of but I can't say I'm all that personally passionately against it either. I don't mean this as attack or defense, only a perspective on the news that I think is closer to a truth.)
Most people who drive drunk aren't doing it because they're desperate and have no other option, they're doing it because they're drunk assholes. They will still do it even when they could get a Lyft for $8. They're drunk.
> I couldn't even imagine trying to get home without lyft or uber in many circumstances.
Ok, but people must have managed it somehow 10 years ago, right? Your college and your city have not changed very much in that time. It truly is not that hard to take turns with your friends staying sober once in a while, or just stay over at a friend's place and then leave in the morning.
My college and the city actually has changed a lot in the past 10 years, it's seen acceptance rates go down 20%, 2 deaths in Greek life, tuition rise by $10,000, and major companies move into the area. My school also has developed a parking shortage, so many students living on campus are not allowed to bring cars. Uber/Lyft is a godsend for many students.
1,740 Cost of revenue
864 Operations and support
638 General and administrative
_____+
3,242
Also: what’s in “Cost of revenue”? It is neither “Operations and Support” nor “General and Administrative”. The subsidies they give drivers? If it is, prices would have to go up by about 50% for that to go to zero.
What really surprises me is how many otherwise savvy and tech-knowledgeable people bought into the hype.
That said, I also think that not everyone involved in spreading the hype does it for innocent reasons. For example, people often criticize Elon Musk for making absurd claims about self-driving cars, but then argue that he does it because he is innocently deluded. I suspect it's more likely that he is lying through his teeth.
1. General AI optimism fueled by the almost incredibly fast rate of advance of progress enabled by supervised learning in certain domains and by reinforcement learning in an even narrower set of domains.
2. Adding to the above, progress enabled by super-precise mapping within constrained areas.
3. Probably some California-centrism. What's this weather thing of which you speak?
4. Silicon Valley techno-optimism that problems just need one more version to solve
but
5. A great big game of topper in which, once various people started proclaiming that self-driving was just around the corner for whatever combination of over-optimism and because it was in their financial interest to do so, YOU had to fall in line or you'd be perceived as being hopelessly behind your competitors when you said self-driving was decades out.
Further fueled by
6. The many young professional urbanites with no current interest in owning a car or even getting a driver's license who so desperately wanted to believe that their personal robotic chauffeur that they believed things that they never would have were they not otherwise so personally invested.
The are not trying to attract drivers at all, they are trying to eliminate them. The drivers portion of the fair is the largest cost so removing drivers increases margins overall. Self driving cars are the only way this is a good business - which is why there is so much competition from many of the smartest innovators/investors in the world.
The P/S multiple is what you’d expect the P/E multiple to be.
Ridestar claims that 61% goes to the driver; 39% to Lyft/Uber.[0]
Their S-1[1] shows lots of sales and marketing, lots of R&D (remember, they're working on self-driving cars, among other things), and lots of general/admin (I suspect they spend a lot on legal).
[0] https://www.ridester.com/uber-fees/
[1] https://www.sec.gov/Archives/edgar/data/1543151/000119312519...
I don't have a horse in this race, but if Uber/Lyft fail there are going to be substantial societal repercussions. Admit it or not, they have disrupted the transportation industry significantly.
Just as a note: without a low-cost private car, I literally could not keep my job.
So whoever gives me a discount I will use and if no one will I will catch a bus or taxi. Google Maps shows me the estimated cost for Uber and Bolt.
I don't want to work around it. Therefore, I rarely use these services. It is becoming more and more hassle.
Do you understand how many other industries use AI for pricing? What about buying things on Amazon? Hotels? Airline tickets? Gas?
You may as well go back to using taxis if you don't think Uber is giving you a fair price.
I'm okay with airlines, amazon or whoever setting pricing at whatever they want as long as all users pay the same amount for the same thing.
(1) https://www.nytimes.com/2019/07/29/technology/uber-job-cuts....
(kidding)
It may as well be trying to hold back the sea. They can do this in the short-term, but not forever.
ninjaedit: I'm in favor of this putting pressure on public transit for sure though. In SF its abhorrent how late/delayed MUNI can be...
[1] https://www.vox.com/the-goods/2019/8/6/20757593/uber-lyft-tr...
I still think there's a market out there, but Uber in particular feels like it's grown too big for the actual market it can hope to occupy.
You can see the losses shrunk (lets for just a second ignore the stock based compensation because that should have been something every investor of Uber should have known was coming) but missing on top line revenue is pretty rough.
This makes a bigger difference when big drops come into play. A 50% gain is offset by a 33% loss.
City dwellers posting the opposite because they rely on the product to make their lives work.
Here I am, stuck in the middle with you.
What were they expecting to happen? A company losing money with no sign of being profitable any time soon. If ever. They expected the stock to go up?
Not exactly as bad as the headline makes it sound, but still bad. EDIT: Still very bad. Obviously!
console.log(document.querySelector('#site-content').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))From January: "According to a new poll conducted by the Pew Research Center, just 36 percent of American adults say they have used ride-hailing services. Sixty-one percent say they have heard of the services but hadn’t taken a ride."
https://www.wired.com/story/uber-lyft-ride-hail-stats-pew-re...
Heck. I travel lots and it's probably been a few months since I've taken a Lyft or Uber.
I don't think it's as important a company as you seem to think.
It's not as though UBER going under is going to tank the economy, but it will be a major unicorn going under, causing the entire silicon valley money-losing model to be questioned, leading to trouble raising money, layoffs which drag down the rest of the economy.
Similar to the 2000 crash.
Stay tuned.
1. 3.9 Bil was a one time cost
2. 1.3 Bil is not almost double 880 Mil. I mean that's just egregious.
That doesn't mean it isn't a loss?
Does that mean I didn't lose your $20?
Did you lose $20?
That's a closer analogy to SBC than losing cash.