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

Posted by EditorDavid on from the car-talk dept.

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."

7 of 334 comments (clear)

  1. Sounds good to me by dugancent · · Score: 5, Insightful

    Few companies rival the dishonesty, misogyny and downright shadiness of Uber. The quicker they are gone and a better company can fill their shoe (Lyft perhaps?), the better.

    Nothing of value will be lost.

    --
    SJWs are the new boogeyman. -Me
    1. Re:Sounds good to me by penguinstorm7261 · · Score: 5, Insightful

      That's a bit of a ridiculous response: tipping is far from universal and, frankly, is often used as an excuse to pay less than minimum wage--wait staff in Canada generally gets less than the minimum wage on the *legal* basis that their tips make up for it. For the employer it's a win, but for consumers and staff it's not always. I've pointed this out to coffee shop employees: by putting a tip jar out they create an environment where tipping is expected and the norm. This puts their employer in the position to argue that they should be paid less than minimum wage...because, tipping. So here's a radical idea: charge me the value of your service and I'll pay the value of your service--whether it's a ride in a car, a good bolognese or a latte.

    2. Re:Sounds good to me by gordo3000 · · Score: 5, Insightful

      you mean switch to the system they use in most of the world?

    3. Re:Sounds good to me by mrvan · · Score: 5, Insightful

      This comment does have merit. One of the really annoying things about traditional taxis is the uncertainty cost.
      - You almost never know beforehand because the cost is calculated en route
      - in some countries (thailand, vietnam, probably more) they try to avoid using the meter if you don't know what you're doing
      - After the journey seemingly random extras can get added for luggage, toll roads, airport fees etc. In civilized countries most are probably legit, but as a visitor how do you know?
      - Tips add to the uncertainty. If you travel a lot, you need to learn tipping customs for each country you visit.

      With uber, you see the total price on the app, including service and all extras, before you book the ride. I hate their business model and their disrespect for local laws and practice, but in Europe I almost totally avoid cabs because of the reasons above, and a decent app would go a long way towards making me use taxis more often.

  2. A case study in overexpansion by Applehu+Akbar · · Score: 5, Insightful

    If I were running Uber, I would have had it concentrate on an assortment of US cities that are friendly to open-market taxi service, rather than blowing its budget fighting City Hall in every monopoly city in the world. By being profitable and having the capital to treat its drivers well in the short term while getting ready for self-driving cars in the long term, it would eventually expand into monopoly cities because the customers would demand it.

  3. Re:Maybe, but maybe not by BarbaraHudson · · Score: 5, Insightful

    Problem is that, unlike Amazon, which has huge barriers to entry (those warehouses cost money, and so do the schmoes who schlep the stock around inside), anyone can create a web app and let people post that they're looking to "share a ride from point A to point B". The drivers bear all the capital and running costs, as well as the legal risk.

    --
    "Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
  4. Re: Bloggers by DrXym · · Score: 5, Insightful
    Their product idea is to be a taxi operator but without abiding by the safeguards, and regulations that protect passengers or even the drivers themselves - police background checks, vehicle safety checks, adequate insurance, employee rights etc. Unsurprisingly this has lead to all kinds of adverse consequences for the company.

    If they're still burning through money after all that then there is something seriously fucked up with their product idea and their business model. I won't miss them if they go under. More likely they'll try to do an IPO and pass the buck onto some other saps. The founds and 1st round of investors will take the money and run.