'Uber Is Doomed', Argues Transportation Reporter (jalopnik.com)

When an Uber self-driving car ran a red light last year, they blamed and suspended the car's driver, even though it was the car's software that malfunctioned, according to two former employees, ultimately causing Uber cars to run six different red lights. But technical issues may be only the beginning. An anonymous reader writes: Jalopnik points out that in 2016 Uber "burned through more than $2 billion, amid findings that rider fares only cover roughly 40% of a ride, with the remainder subsidized by venture capitalists" (covering even less than the fares of government-subsidized mass transit systems). So despite Google's lawsuit and other recent bad publicity, "even when those factors are removed, it's becoming more evident that Uber will collapse on its own."

Their long analysis argues that the problems are already becoming apparent. "Uber, which didn't respond to questions from Jalopnik about its viability, recently paid $20 million to settle claims that it grossly misled how much drivers could earn on Craigslist ads. The company's explosive growth also fundamentally required it to begin offering subprime auto loans to prospective drivers without a vehicle."
Last month transportation industry analyst Hubert Horan calculated that Uber Global's losses have been "substantially greater than any venture capital-funded startup in history."

Comments

Re: Bloggers

[Anonymous Coward]

Jalopnik is a big step above random basement bloggers. Most car companies do respond to them.

Re:Uber is pursuing the wrong thing

[Motherfucking Shit]

Uber is a taxi company, it made a name and got support by creating jobs and employing people

Don't try telling them that. According to Uber, they're creating "ride sharing opportunities" and they're "independently contracting" people.

Re:Maybe, but maybe not

[Hadlock]

Sure but my Uber account works in 20+ countries worldwide, I don't have to sign up for the local transit whatever. That's a huge plus. Not only that but sales people use uber religiously as they don't even need to expense their uber travel, they just charge it to the company card, that's a massive, massive boost. Uber and AirBnB are the largest business expenses in total number of line items for many companies these days. You can't auto-expense every single local transit app automatically, with uber comes that convenience. As someone traveling in Hawaii, California, Texas, London and Hungary it's really nice to be able to just open the app, plug in the location, and have someone drive you there without having to worry about the local currency, working out how to sign up for the service in Hungarian or Maltese or whatever. Step off the plane and GO. I don't care if it's 5% more, for the three days I'm going to be there, the cost difference just doesn't matter.

Re:I remember the same predictions about Amazon

[Karlt1]

Amazon wasn't profitable as a whole because it kept plowing money from its profitable departments into expanding into new markets. Amazon's most profitable division right now is AWS. AWS is a scalable business where cost don't scale linearly with the number of customers. Uber is not profitable because it is subsidizing each ride. Uber doesn't gain the benefits of scale using its current business model.

Re:They said the same of Amazon.com in its early d

[Anonymous Coward]

It was completely clear by anyone that could read a general ledger that Amazon made the choice to be not profitable, but to expand and to turn their revenue back into the business. Their day to day P/L in fact looked very healthy early, it was simply the case they spend their money building datacentres / warehouses / accqusitions / (insert method of business growth here), which on the ledger for a financial year is a loss but pays dividends down the road. Remove a lot of the business expansion and you have a company that at it's core has a very sound day to day balance sheet and business plan, ie the fundamentals are excellent. Which is why investors tolerated losses or no dividends and Amazon now is extremely large and very healthy.

Uber have neither a solid day to day balance sheet nor business plan. This wont be tolerated long. Uber are burning cash with no solid outcome in sight. A ledger reading shows a company where the fundamentals are NOT good, the day to day P/L is very bad. It is now becoming clear investors are not going to tolerate this bleed for much longer.

Re:Uber is pursuing the wrong thing

[knorthern knight]

> And Android still makes almost no money for Google.

Stock Android phones come with Chrome, Google Search, etc, and collect tons of telemetry for Google. Google makes its money off of data about people. So, yes, Android does (indirectly) boost Google's bottom line.

Re:Sounds good to me

[TheRaven64]

For the employer it's a win, but for consumers and staff it's not always

It actually isn't. There was a Freakonomics episode about this a few months ago. The problem is that front-of-house staff in the USA are now getting a significant proportion of their income from tips, which are a percentage of the total cost. This means that their income has gone up a lot more over the past couple of decades than that of kitchen staff, to the point where someone with a cooking qualification can still make more money waiting tables than being a chef. Even worse, it means that the income varies hugely between days, so it's trivial to find someone to work on a Friday or Saturday night, because they'll make loads of money, but restaurants often can't find people to work on Wednesday or Thursdays, because they'll make a lot less (for regular slots, you can establish a rota, but if you need cover for a sick employee then it's much harder).

Re:Sounds good to me

[The-Ixian]

Taxi driver in Long Island N.Y. here. "TIPS" is an acronym for To Insure Prompt Service"

I'm no English expert but shouldn't that be TEPS (To Ensure Prompt Service)?

You are not insuring prompt service against financial loss, after all.