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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).
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.
Re:What is Uber pissing away money on?
I can't figure out how they aren't profitable.
Hookers and blow is my go to answer.
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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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