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Uber Spent $10.7 Billion in Nine Years. Does It Have Enough to Show for It? (bloomberg.com)
An anonymous reader shares a report: What makes Uber Technologies the most valuable venture-backed technology company in the world? Investors say size and growth. The business is transforming global transportation networks. On closer inspection of its financial performance, Uber also pioneered a very expensive way of establishing a market and staying on top. Uber has had little trouble finding investors eager to buy into its vision. It relishes telling backers about gross bookings, or the amount riders pay for service. That number is enormous, totaling $37 billion last year. But most of that goes to drivers. Uber's cut, or net revenue, came to $7.4 billion. Compared to public companies with similar valuations, Uber's revenue lags well behind. At the same time, Uber has worked to downplay its persistent losses. Because the company doesn't disclose financial results with much consistency, it's easy to lose sight of how much of investors' money Uber has spent. Since its founding nine years ago, Uber has burned through about $10.7 billion, according to a person familiar with the matter. Over the past decade, only one public technology company in North America lost more in a year than Uber lost in 2017. None has burned such a tremendous amount in the first stage of its life, according to data compiled by Bloomberg.
There, I called them out.
Never have I understood the appeal of a glorified taxi central. But then I’m from the time when BOO.COM was worth a fortune (shortly).
I can't figure out how they aren't profitable. It's a freaking simple app, with a backend that does some matching. How can that cost 11 billion dollars?
Uber is the perfect example of spending a lot of money because you HAVE a lot money. There's no reason a ride hailing app should cost this much. It's not as if they have a massive amount of infrastructure around the world to support.
yes -- it opens up the cab markets to everyone, including its competitors.
upper management has a lot of really nice stuff!
Did they make anything new with that money? Have we seen new developments since Uber first launched? Did they not just set a billion dollars on fire in China and leave with nothing to show for it?
The outrageous valuations of tech companies are pure fantasy.
And do the world a favour. Please?
family of a six-year-old girl who was struck and killed by an Uber X driver got an pay out from uber that must of cost them alot.
That's probably more than enough for the VC and other investors. They want as much marketshare as they can get while the getting is both cheap and the PR is good. They want to turn this into as much a monopoly as they can. Displacing traditional taxis and public transportation in the minds of the public so that when they've reached a monopoly position they can extract as much money as they can.
That's the plan.
When you consider the amount of money spent with all the scandals, lawsuits and bad news. (Frankly I'd be amazed to see a positive story on Slashdot on them...) It's a pretty conclusive no... About the only thing amazing is how much longer will this trainwreck keep going before it blows up or sinks.
Where I live the UberMoto drivers wear spectacularly ugly helmets. Designing something that awful must have cost a fortune.
Mo money for the execs and investors, tons of unemployed drivers!
Bernie Madoff had that too.
Well I guess it depends on how you look at it. He's a snake oil sales man and has some intelligence to steal money from morons, but he doesn't know how to run a company. Uber is a failing venture, unfortunately there are fools with money who can't see that. I guess it's all good if they can get a return, but few of them will.
Why is it that idiots like Dara and Trump can get people to follow and listen to them. They are clueless fucking morons.
While the US government does perform several necessary functions, when one observes the current condition of our infrastructure and our treatment of veterans, to name a few, one does wonder where all that money went.
I'm going to get modded down to oblivion, but I'm going to say something good about Uber. I don't use it much in the US, but used to live in Manila, Philippines and travel there about once per year. Having Uber there has been a godsend for me. The taxis there are often nasty and in poor repair, the drivers see an American and half the time start in on how their meter is broken, and, in general, they are a pain in the ass to hail unless you are at a mall and willing to stand in a long line.
Uber works well for me and for my wife when she's there (also American, BTW), an order of magnitude better than taxis. The rates are low enough that I almost always tip significantly above the fare. Some of our staff over there do the "side hustle" thing and enjoy making the extra money.
I know that my experience isn't everybody else's; and Uber in the US is a different beast. Uber absolutely needs to take proactive action regarding background checks and I know that will raise the price. It will still be better than the taxis, at least in Manila.
The losses (primarily from an extreme and presumably controlled r&d and lobbying spend, I presume, not from too little recent vs too high service operator costs) are to be expected.
Theyâ(TM)re on track to become the worldâ(TM)s biggest vehicle owner/operator (both road and drone) as car ownership will plummet (and it will. Fewer drivers, particularly genY+, smaller insurance pools, higher insurance premiums, even fewer drivers, feedback loop; meanwhile cost of ride from uber will drop, particularly when most expensive part of uber (driver) is removed, and at some point offer faster than car drone service. Even more feedback loop. It wonâ(TM)t go to zero, just like desktop PC sales didnâ(TM)t... but itâ(TM)ll shrink substantially with alternatives ). For uber, making the insane investments required in r&d (first In road traffic management, then in self driving, then in large scale drone fleet management per their collab with NASA) is the only right way to get there. Thatâ(TM)s how Iâ(TM)d be doing it. R&d off raised investment capital and loans registers as losses.
I really donâ(TM)t see the problem. Iâ(TM)d WANT them to be doing this if I was a (medium-long term) investor.
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Bike sharing and skateboard sharing is where urban dwellers are now.
-- Tigger warning: This post may contain tiggers! --
Uber is NOT a typical VC investment or a typical startup company. Often reports of VC activity and standards remove transactions involving Uber (and a few other choice companies) from their statistics and totals. The investments in Uber are so massive and strange that they skew the entire VC market.
That said, Uber is not the first company to run at billions of dollars of loss on the promise of future payoff, and they won't be the last. At least Uber is taking private investor money (which comes with the expectation of higher risk) rather than running this gamble on the public market, which was the big hit on Amazon for a long time.
Let's strip the article summary of distracting commentary and just show the most important revenue numbers used against Uber...
...last year... Uber's...net revenue, came to $7.4 billion.... Since its founding nine years ago, Uber has burned through about $10.7 billion...
So, Uber spent $10.7 billion over 9 years and now they make $7.4 billion in net revenue every single year. Where's the problem here?
This author stuck a bunch of fluff between big numbers hoping you would just remember the big numbers and not the context between them.
None has burned such a tremendous amount in the first stage of its life, according to data compiled by Bloomberg.
Musk will take it as an affront and a personal challenge. He will raise tons of money, do incredible things, lot of more superfantastic than a taxi company that is not a taxi company, things that wow people with tremendous achievements. Only thing he wont do is to make a profit for his investors, otherwise ...
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
The only assets it has is an app and a brand name
A) You are greatly discounting the incredible value a world-wide brand name has.
B) If they have "no assets" just where are all those Uber self driving trucks coming from? What about the self driving car assets which they have been working on for years? You seem to be totally ignoring very real office space, equipment and R&D expenses that have been incurred over the years and give the company real value.
C) I also find it laughable that someone on Slashdot, of all places, would claim "no assets" when they have a vast database of ride habits of hundreds of millions of users.
D) I find it more understandable but still sad you do not recognize the assets Uber has in operating agreements with cities all around the world. Contracts are indeed assets.
No, assets, my asset.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Spent 10 billion over a decade, revenue of 7 billion in one year, what am I missing?
There is no way Uber's infrastructure/staff costs even remotely close to 7 billion a year.
What else did we learn from the article? That Uber gets about 20% cut of what you pay for the drive. That's more than I'd thought (about 10%).
Their goal appears to have been to hold out long enough for self-driving cars and then become essentially an automated driverless taxi monopoly. It doesn't look like they'll survive long enough for that to happen.
not theirs (the top people at Uber in their posh offices).
mfwright@batnet.com
I do not see where you found the 20% cut figure in the article, which is critical to the rest of your argument. I agree that their infrastructure and staff costs are far below $7B.
However, I'm under the impression that they're not making any money on trips and furthermore that they are actively subsidizing trips to the tune of 30-60%, depending on a variety of factors. That will burn through cash at a prodigious rate.
Sorry for AC post. I have some upstream modding I want to keep.
Their survival isnâ(TM)t in doubt.
They donâ(TM)t need to continue funding r&d as aggressively as they are right now.
They can scale it down, and their ridiculous revenue will by far outstrip their tiny in comparison IT costs.
I can see them tweaking r&d and lobbying spend to live within their means.
I canâ(TM)t see them going under.
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