Uber Loses at Least $1.2B in First Half of 2016

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How does a company like Uber continue to lose money like this and stay in business? An even bigger question is how does a company that consistently posts record losses have a $70 billion valuation? I guess Uber can continue this trend as long as people keep investing billions. :confused:

In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber's losses in the first half of 2016 totaled at least $1.27 billion.
 
Uber must be extremely top heavy. Two people could handle the marketing for it. I mean shit, it's an extremely simple idea, with a super simple model, and tech that's been out for over 20 years. How could something so simple bleed so much damn money?
 
alxlwson said:
Uber must be extremely top heavy. Two people could handle the marketing for it. I mean shit, it's an extremely simple idea, with a super simple model, and tech that's been out for over 20 years. How could something so simple bleed so much damn money?
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Probably fighting government laws to stay in business. A house bill could be passed and Uber becomes a distant memory.
I'm sure promotions, advertising, lobbyist, lawyers etc, eats at their revenue daily.
 
It is because they are trying to price Lyft (and traditional car service) out of Business. Rates keep dropping, thus revenue keeps dropping. I drive for them in my spare time. In the right areas money is still good. Others not so good.
 
IndyJoe said:
It is because they are trying to price Lyft (and traditional car service) out of Business. Rates keep dropping, thus revenue keeps dropping. I drive for them in my spare time. In the right areas money is still good. Others not so good.
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Get a cheap used bmw 5 series and run Uber Black. You make way more dough. And people forget nicer shit in it.
 
Stock valuations are determined using past performance and current asset/liability valuations, but also future expectations. Once Uber starts rolling out driverless cars, they can stop paying those pesky humans and start raking in cash like crazy. Believe it or not, the people on Wall Street have thought of this.
 
tuggernuts said:
Once Uber starts rolling out driverless cars, they can stop paying those pesky humans and start raking in cash like crazy. Believe it or not, the people on Wall Street have thought of this.
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They just stop paying pesky humans their minimum wage and operating costs to run, maintain and clean aging, depreciated Priuses and Uber takes on the task of directly buying, operating, maintaining and cleaning brand new expensive cars.

I suspect humans are cheaper; though there's little chance that Uber even survives until the era of real self-driving cars are available.
 
Uber is in its infancy right now, doling out cash left and right for marketing, penetration, and now R&D for self driving cars. I wouldn't stick my nose up at the company.
 
Modern day pyramid scheme. The initial investors get out making bank, each subsequent round gets weakened until the last few rounds take the hit.

Kinda like the mortgage crisis, initial paper writer makes some change, and it trickles down as the product gets resold over and over.
 
I don't understand what the fuck is so difficult about providing a very simple service that apparently is vastly more difficult than anyone at Uber seems to realize (it's really not that tough to do what they're doing, not at all). Then again I don't think they're worth anywhere near what the valuation is - $70 billion? My god, what the fuck is wrong with this reality?
 
uber in some markets is paying out far more than they take in

4-6 months ago it was surging all over the place in Los Angeles. Of course no one likes that other than drivers. People were shifting to Lift since there was less demand there. Uber had to do something. And they did. incentives. It varies, but apparently some drivers get bonuses or guarantees for doing a certain number of rides. In Los Angeles I remember one was give 75 rides for the week, get a 500 dollar bonus on top of whatever else you made.

Think about that. That's around double what many would take in with base fares, uber was and is paying out more than they take in to artificially keep the surge down and buy time and maintain marketshare until self driving cars come online. The MOMENT they do they will start replacing drivers asap and drive their labor costs as close to zero as possible. They can lower rates again, while being more profitable. If it takes another 4 years for self driving cars to come into prime time and be made legal, and the losses are maintained for 4 more years, that's around 9 billion more in the hole until they can completely flip the script and generate massive profits by ditching all of their human drivers.
 
Tiberian said:
I don't understand what the fuck is so difficult about providing a very simple service that apparently is vastly more difficult than anyone at Uber seems to realize (it's really not that tough to do what they're doing, not at all). Then again I don't think they're worth anywhere near what the valuation is - $70 billion? My god, what the fuck is wrong with this reality?
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Uber has this stupid plan to compete against private vehicles and mass transit, which requires such low fares that they wouldn't have enough drivers to drive at those rates. Therefore Uber has to subsidize them using the VC money they've been constantly raising.
 
SLee said:
Uber has this stupid plan to compete against private vehicles and mass transit, which requires such low fares that they wouldn't have enough drivers to drive at those rates. Therefore Uber has to subsidize them using the VC money they've been constantly raising.
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It all rests on driverless cars. They can EASILY compete with mass transit if they have legal and reliable driverless cars. No need to pay a driver. The cost? The initial capital cost of the electric driverless car and the energy cost of transportation. Everything above that is gravy, they can reduce the fares enough to make the cost of point to point transport much closer to something like a bus or train, not quite as low maybe, but close enough. This is not crazy talk, they are just using VC money to buy time. If driverless cars don't pan out though, they are doomed. Their entire future rests on stepping on the backs of human drivers long enough to sustain their vampiric rise to eventually suck the last traces of life out of their human hosts and replace them with more profitable robots.
 
I don't think robot cars will end up being nearly as profitable as they hope. Governments (state, local, federal) all need people working and paying taxes if they're going to provide services. At some point robots (including self driving cars / trucks) will be heavily taxed somehow in order to be able to pay all those unemployment / welfare checks to those no longer able to find jobs. I don't know how many jobs are associated with driving vehicles, but my guess is well north of 10 million people in this country alone. People can talk about 'new jobs', but I don't see where they're going to be coming from.... Or what percentage of the "drivers" will be qualified / trained enough to fill them if they do happen. Interesting times ahead for sure!
 
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