Hacker News Reader

Comment by jasallen | Hacker News Reader

Seems like Uber would be a big step _down_ for Sandberg.

Agreed. I'd be shocked if she did this. FB is a premiere tech company. She's second in command there. If she leaves, it would be to be first in command at another premiere company.

Uber is a startup that doesn't make money (actually loses quite a bit per ride), has just been rocked by a major scandal and doesn't posses any sort of tech or business process that is really unique. There is nothing that Uber does right now that another startup could just copy.

They lose money on each ride, and it's incredibly unclear how they will make money outside of trying to run taxis companies out of business by subsidizing fares with VC money and then jacking up fares when there is no more competition.

Buy low, sell high.

On the flip-side, if she takes the helm at Uber and brings it from the brink to a huge IPO, she'll achieve GOAT status.

She also has lots of experience dealing / managing a strong-willed founder with all the equity control.

I really don't know anything about her personality and style, but if she's the super ambitious Mayer-type, I think she'll go for it (assuming she sees a path forward when she gets to see the behind-the-scenes numbers).

> it's incredibly unclear how they will make money outside of trying to run taxis companies out of business by subsidizing fares with VC money and then jacking up fares when there is no more competition

If you look at the numbers, all they need to do to reach profitability is increase fares by 7% without increasing the driver's cut.

I'm not suggesting they can just do that overnight without impacting their competitive position, but it's not "incredibly unclear" to me.

If I remember correctly they are also profitable in the US, but bleeding money in an attempt to corner other markets.

But they have $7.2B in cash, so they can "afford" it

A huge part of their appeal is unusually low fares. Raising their fares to a point of profitability is going to hurt what many customers like about them. But maybe their increased usability is still more than enough.

Raising fares 7% may get them to profitability, but does it get them to the point where a $70 billion valuation is justified?

"Raising fares 7% without increasing the driver's cut" is a complete fantasy at actually should emphasize how unprofitable Uber is. In many other transportation industries, 7% is just about the total profit margin - if companies in these other industries could raise their revenue by "just" 7% they would double their income. They don't because they can't.

I disagree. The average $15 fare becoming $16 will just absorb a lot of consumer surplus that Uber is leaving on the table for competitive advantage. Cabs are still generally more expensive.

And you don't see Lyft as seeing an opportunity to sell for $15?

Actually I think the bigger threat would be lyft charging $16 and paying the drivers more. But outside of a few big American cities Uber dwarfs lyft so they would need to scale up before they could really threaten

FB was not a premier tech company when Sheryl joined. She played a big part in making it one. In fact, Hacker News as far as I remember was deeply critical of Facebook for a long time.

Not saying Uber will go down the same path as FB but I am pointing out the flaw in your logic.

Reply on news.ycombinator.com