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Uber CEO: We Could Be Profitable -- We Just Don't Want To Be (fastcompany.com)
Uber CEO Dara Khosrowshahi said he's not worried that his company lost $4.5 billion last year and claimed the company could "turn the knobs" to be profitable if it wanted to -- it just doesn't. From a report: Khosrowshahi made the comments at the Goldman Sachs Technology and Internet Conference in San Francisco this week where he explained that if Uber did turn those knobs to be an immediately profitable company it would "sacrifice growth and sacrifice innovation." He also spoke optimistically about the impact self-driving cars will have on transportation costs.
Serious question here, how does a company lose 4.5 BILLION dollars and survive? That's just mind boggling.
I'd be more impressed if he said he could take home a wage if he wanted to, but chooses no to.
When they came for the communists, I said "He's next door. Take him away. Goddam commies."
What's better, revenue, or profit? I worked once for a shop that had profit every single quarter (and tidy bonuses for all of us under the sharing plan), right up to the day they laid us all off and closed down the shop.
Actually.. It's CASH FLOW that kills more companies that lack of profit. You can make a tidy profit, but if you don't have the cash to pay the bills when they come due it's game over.
You need profit to stay in business long term but Cash flow will kill you today...
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
In its three biggest losing years, Amazon suffered losses of $0.7 billion in 1999, $1.1 billion in 2000, and $0.6 billion in 2001.
https://revenuesandprofits.com...
In fact, Amazon's losses in its first 8 years (1995-2002) together totaled $3.0 billion, which is still less than what Uber lost last year alone.
Amazon became profitable in 2003, nine years after its founding. Uber will be nine years old next month.
Reinvesting profits is not the same as losing money. Uber is only surviving on continued flow of investor money. Amazon was was surviving on its own sales revenue.
Knowing Uber I'm guessing hookers, blow and access to the office sex dungeon for investors.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Revenue is the cash (or equivalents) that you receive for the services or goods you provide.
Profit is how much of that cash you keep after paying for all of your costs.
So if you're an Uber competitor and you have ten customers, each of whom makes one journey, paying you $10 each, your revenue is $100.
You pay your drivers $3 per journey, so you have $30 in 'Cost of Goods Sold', giving you a 'gross profit' of $70.
Then you have your head office costs, including accountants, HR, your own salary, the office space you rent, IT costs, cleaning, etc. If that all adds up to $50 then your profit is now $100 - ($30 + $50), so $20.
Except that you pay corporation tax on that $20, so take $4 off, leaving a net profit of $16.
Which is why making a loss is attractive. Invest that $20 in R&D, or new premises, or marketing, and if your ROI (return on investment) is more than 80% then you add more value to the company than if you realise the profit and pay tax on it.
Just don't ask about weird shit like EBITDA, or we'll have to get accountants involved.
Reinvestment and loans put into the company.
Uber is using the current relatively low interest rates to buy cheap money to spend on things that will bring in more money then the cost of the cash.
Just as long as your investments bring in more then the cost your company can run it debt for eternity, and still pay off all the bills. That said. For most companies they grow to a point where such investments do not pay off as well the cost of money. So the company at some point will need to switch to profits.
For a small business or personal financing. This strategy is difficult to impossible.
1. Interest rates are governed by the risk so poorer people have to pay more. So money is more expensive.
2. Smaller investments lead to smaller rewards which could be easily eaten by a bad investment that didn’t pan out.
3. You don’t have the resources to fight and bargain with creditors.
4. Survival requires non investable purchases. $500 a month on food is money that you are not going to get back. Hence why a lot of successful businesses owners who start from nothing talk about eating Ramon for a few years.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.