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Uber Spent $10.7 Billion in Nine Years. Does It Have Enough to Show for It? (bloomberg.com)

Posted by msmash on from the closer-look dept.

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.

3 of 91 comments (clear)

  1. Emperor without clothes by sprins · · Score: 4, Insightful

    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).

    1. Re:Emperor without clothes by ShanghaiBill · · Score: 4, Insightful

      I don't get it either. There is no customer loyalty or lock-in and no network-effect. Many riders use both Uber and Lyft, and readily switch from one to the other based on price and availability. Likewise, many drivers have both apps, and take the first fare from either. When Uber and Lyft pulled out of Austin, alternative ride-share companies popup up immediately. The same will happen if Uber tries to raise prices enough to be profitable. The barrier to entry is very low.

      Can Uber become a profitable company? Sure. Can they become obscenely profitable enough to justify their astronomically high valuation? I don't see how that is possible.

    2. Re:Emperor without clothes by slew · · Score: 4, Insightful

      ...I mean funny of them to do what they want with their money :).

      Whose money? Uber is only borrowing it (albeit with a vague promise to pay it back with unspecified amounts of interest, but...)

      Technically, Uber is simply tricking investors out of their money.

      There is no vague promise for Uber pay any money back at all, but merely an implied notion that they could potentially sell the share of the company that they paid money for to someone else in the future (presumably one of the suckers born every minute).

      If instead Uber were to give a vague promise to pay money back to their current "investors" with money they would collect in the future, Uber would probably qualify as a ponzi scheme. Instead they make no promise at all...

      Some people buy beanie babies with their money, some buy bitcoin, some people (who have connections to the digerati) buy shares of Uber. All hope they will be able to sell it to someone else one day for more than they paid for it...