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Leaked Documents Suggests Uber Is 'Losing Millions'
New submitter DaneTerry88 points out an article about the financial state of Uber, poster child for the sharing economy. Documents leaked to Gawker seem to indicate the company is still far from profitable, despite its popularity. "They show operating losses of more than $100m (£65m) in the second quarter of 2014, albeit coupled with steady growth in revenue." Uber did not deny the leak, but pointed out they are still building the business, which requires a lot of investment. The company has been valued as high as $50 billion, and only a few days ago received a $100 million investment from Microsoft.
just reached profitability for the first time in their history and their stock is doing great.
There are two ways that I can see growth helping Uber:
1) They are expanding their locations; and using the profits of their existing locations to develop the new ones. At some point, they will stop growing, and the profits should increase.
2) If they are losing money in cities where they are well established, then by growing they will destroy the existing taxi industry; then they can raise rates dramatically and increase profits
The thing is, it's hard to see where Uber's costs are. They develop software, but that's a pretty small investment considering the hundreds of thousands of rides a day people take.
I love Mondays. On a Monday, anything is possible.
They keep breaking laws and having to pay out the ass in fines. Their model won't be profitable until they buy off enough lawmakers to get the regulations changed.
Uber is already dead. As soon as they automate driving do people really think that governments are going to allow private taxi companies to be run at a profit as they start to automate mining, agriculture and energy production? Of course not.
Perhaps the US government should contract Uber to transport illegal aliens back down south were they came from.
GET THE FUCK OUT ILLEGALS.
http://www.foxnews.com/us/2015/08/07/california-sheriff-points-finger-at-sanctuary-city-laws-for-cause-veteran/?intcmp=hpbt1
The guys made an app used by drivers (who get a % of X) and riders (who pay X). Where does the money go? I'd be equally surprised if Paypal is said to 'lose millions'!
Slashdot, fix the reply notifications... You won't get away with it...
Pardon my ire, but Uber's management has clearly demonstrated that they are interested in the exact opposite of sharing. They can go fuck themselves and stop pretending that they're interested in helping anyone other than themselves.
Uber is stealing jobs from real employees that have benefits. It is good that their Republican-style "everyone is a contractor with no rights and no benefits" model is failing. No responsible society should ever allow this sort of thing to happen.
This sort of mad rush for the finish line tends to upset the men in grey suits. But when you are in a gold rush you don't spend time making detailed maps, building beautiful camps for the miners, setting up a day care, and otherwise making everything perfect. You yell "Charge!" and run at the enemy with your sword waving above your head.
Even the business plan should simply read we don't really know and even then the plan will change. Love Uber or hate uber we must all admit that it is shaking things up. I recently took a normal taxi in my city from the airport for the "standard" $55 plus a tip. I took uber back to the airport for $32 and no tip. But also at the airport I asked the first driver what the charge was and he said, "Standard charge $75 same as everyone else." except that he was a "Limo" driver. So the first taxi driver in my new city lied to me and tried pulling a fast one. With Uber this sort of crap is massively curtailed.
So on this issue get back to me when uber has finished growing; if at that point they still don't have profits then it might not actually be an uber good business model.
Uber has a ton of infrastructure investment - it's mostly been clearing the way for the company to exist, legally speaking. They've already shown they can grow profits regularly where they are allowed to operate, so that is a way bigger deal than people are allowing for.
Because Uber is the first in, they are also in a position to drive what regulations they will be subject to as rules change. That too is a huge advantage because other companies have to figure out what those rules are and how to comply with them, while Uber is built city by city to work within the regulations that cities desire to set forth.
User's infrastructure was MUCH HARDER to build out than Amazon's, which is just code and servers... Uber had to deal with real people - and not just people, but government officials.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I will no longer use Uber because of their anti Second Amendment Civil rights policy prohibiting both drivers and passengers that are licensed to carry from doing so.
You don't want "my kind" in your cars, no problem. I'll take a cab.
* Carthago Delenda Est *
... the reliable news source.
Maybe they should stop giving new users 3 free rides...
That's why every few years they have a new ridiculously higher valuation, accompanied by another round of funding.
"First they came for the slanderers and i said nothing."
From Uber being sued to infinity. Cha-ching. Major cash cow for lawyers everywhere.
So apparently if you don't post profits immediately, you are a failed company? Isn't it standard to post losses for 2-3 years before you become profitable. Well, 3 years in California. After 3 you cant write off the losses from your company anymore.
I assume it's just fighting off the lawsuits. Their business model is fundamentally sound. Horribly, horribly vile, but sound. They find folks who recently lost a job and still have a decent car, declare them 'contractors' while forcing them to act as employees in all respects (can't work for anyone else, work when we say or we fire you, use our phone, etc, etc), don't pay benefits or unemployment. They get the benefits of employees without the responsibilities, which for a society like America where we're based our entire quality of life on your job ends fabulously for the employer.
Uber's just like Amazon. They'll keep getting money because if they can clear their hurdles (for Uber it's legal, or Amazon it's just killing brick n mortar) they'll be insanely profitable. If you're a billionaire investor then you can afford to wait it out.
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Amen to that!
Trump 2016
Nobody is supposed to know that until after the IPO, when most of the shares have been sold to the general public.
In case anyone can't see that employment chart, here is a screenshot of it.
Your comment makes no sense. Uber will only really take off when self-driving cars become mandatory.
SDCs would destroy Uber's business model.
Their entire business model is predicated on "not a taxi company, a rideshare Schelling Point company".
If they owned their own SDCs, they would immediately *actually* be a taxi company; it's the fact that they do *NOT* own a fleet of cars that makes their contracted drivers contractors, rather than employees.
It also means that the could afford to drop $1.6M to boot every taxi cab in Paris, making the hated "taxi cab traffic slowdowns" go away for a week, and gaining MUCH love among everyone but the taxis, who already hate their guts anyway.
It means they could spend $12.2M to set up every Uber driver with a Delaware Ride Contracting Corp., and deal with the contracting corps instead of dealing with the drivers, to ensure that they are *NOT* in a legal grey area with regard to employee status. Yes, they are employees... of one of a million Delaware S corps which THEN contract driving services to Uber... which ONLY employs contractors.
It means that they could spend $8.6M, and set up a wholly owned subsidiary that sells franchises to people who want to be drivers for "$1 and other valuable considerations", and then charges per unit plus a percentage for use of their scheduling network. And THEN they still ONLY employ contractors.
There's a lot of ways out of the regulatory mire of being considered a taxi service -- but owning a fleet is NOT one of them.
They are a privately held company, if you post a profit, you're doing it wrong.
Can't leave the house without a gun.
>Documents leaked to Gawker
Into the trash it goes
Any idiot can run a company in the red, doubly so when it's already established. The CEO likely has no idea how to even read the books or why a bottom line is actually important because it often makes no difference in how they are paid.
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They build an app to hook up drivers with riders, and then they take a cut of the fare.
The drivers shoulder the large CapEx costs of buying a car and the OpEx costs of maintaining it.
So what is Uber spending their money on? Lawyers and lobbyists?
they stop letting you drive. This is well documented. That's because like any business they need reliable employees. I will grant they let you use your own phone now. My other points still stand. You don't make enough off Uber to keep a car running after 200,000 miles. After that you'll need a new car, and the $15/hr or so their best 'black' drivers can make won't get you a car nice enough to do the work. When you're driving for Uber you're on borrowed time.
Uber isn't the sharing economy, it's the desperation economy.
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Other than hosting, a few computers, and like 12 people to run the computers?
And how long did it take Amazon to become profitable?
"...over a protracted period of good times, capitalist economies tend to move from a financial structure dominated by hedge finance units to a structure in which there is large weight to units engaged in speculative and Ponzi finance. Furthermore, if an economy with a sizeable body of speculative financial units is in an inflationary state, and the authorities attempt to exorcise inflation by monetary constraint, then speculative units will become Ponzi units and the net worth of previously Ponzi units will quickly evaporate. Consequently, units with cash flow shortfalls will be forced to try to make position by selling out position. This is likely to lead to a collapse of asset values.â
-- Hyman Minsky, "The Financial Instability Hypothesis"
Isn't their whole business model - we'll build a nice app (done) and take a substantial cut from the driver's revenue? How can you be *losing* money with that?
Anti-uber trolls, you are some of the most pathetic cowards I've ever seen.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Whenever someone posts a logical, impassioned, and reasoned comment in favor of gun ownership, some coward who thinks it's possible to make problems go away by ignoring them moderates them down. And that's why Slashdotters think that all gun owners are idiots. Congratulations, Slashdot, on maintenance of your groupthink!
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"