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Comment by albertgoeswoof | Hacker News Reader

Are Uber's costs really in the tech space? It's a complex tech operation for sure, but I wouldn't have thought they could make up much of the 1.5bn USD if they fired a bunch of developers. These bulk of these costs must be in marketing, customer acquisition and discounted fares, right?

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They have around 12,000 employees according to Wikipedia (and a few other sources show a similar figure). If we figure the average employee is 250,000/year in liabilities on the balance sheet (salary + benefits + options/RSUs) then thats $3 billion a year in employee expenses. I don't think $250k is too unrealistic considering the massive capital gains many employees must have on paper as well as the high level of talent Uber has lured away from competitors. They had the creator of Google Maps, the Otto acquisition (and the subsequent legal costs if we want to factor those in), and a whole lot of other experts around mapping / autonomous vehicles.

Don't confuse years and quarters. Their quarterly loss is $1.5B. If we accept a $3B yearly salary cost (I expect it's actually a lot lower, because their 12,000 worldwide employees, I think, include lots of local employees at far-flung cities who probably have very low salaries by silicon-valley-programmer standards), and extrapolate their quarterly loss to a year, then they could cut all of their salaries to 0 and still only reduce their loss from $6B/year to $3B/year.

That seems like an absurdly high number of employees for what's basically a taxi company, especially considering their drivers aren't employees.

That's roughly as many employees as Apple had in 2005, a company that was making laptops, desktops, servers, wireless routers, portable audio players, and entire operating systems.

Self driving cars and operations eat a lot of staff

It's not even clear why self-driving is an important pursuit at this point for a company like Uber. They're going to blow through billions on this and someone else will come in with a solution that just works.

I doubt a scrappy "startup" like Uber can beat companies like Toyota, Volkswagen, GM, Google or even Apple to market with a viable, certified self-driving car. They have, at best, a few billion left to dump into that venture. Those big companies could throw in ten times that if they wanted to.

Maybe someone needs to disrupt Uber. Go Lyft!

Uber has a lot of Operations staff all around the world who are getting faaar less than $250K a year (even if you add everything in the kitchen sink to reach the compensation number). And by faar I mean an order of magnitude less.

Other than engineering they also have a lot of people going around mapping cities, QAing those maps etc.

Most operational staff are hourly workers who don't get paid anywhere near what a engineer gets and hourly works usually don't get RSUs. You have to consider the 1000s people working on city ops, support, their insurance ops teams are huge, in the US alone they probably have 1 to 2k of people in support roles. Only salaried employees garner the big pay which is guess is less than half the company.

Ps... you'd crap your pants if you knew how many contractors they have doing operations work. Their mostly in low cost counties like the Philippines, and Brazil. Nothing about support scales with growth.

Sure on the other hand employees who got in early have pay packages that are easily in the tens of millions

250k may well be an average, but not the type of average that matters. The few high-pay people warp the average. They will not be culled before an IPO as doing so will reduce confidence. Uber needs to keep its headliners. They can only cut from the plebs costing in the 50-100K range. So either they need to fire 4x as many people, or a cull won't solve the problem.

I doubt that there's a single full-time employee (in the US) that only costs them 50k/year. Total overhead costs are a lot higher than the employee's salary. I have no idea what the distribution of salaries look like, so this doesn't necessarily invalidate your point.

Their sales/brand reps are reportedly paid 20$/hour, which works out to about 40k. I don't know what the benefit package is but I doubt it's much, as I doubt they are all paid for full 40-hour weeks. So I assume they have a pool of sub-40k people.

rule of thumb is 3x your salary is your cost to employer

Not at engineer salaries. Maybe if you're a minimum wage employee.

So remember that it's not that they burned $1.5B this quarter; they burned $3.5B (net revenue of $2B, $1.5B loss).

If their average employee costs them $500,000 a year (surely a generous estimate), then that's $125k per quarter. A $2B spend on salaries would suggest then that they had 16,000 employees (not counting drivers, who aren't part of this equation -- they're the difference between the $9.7B "gross bookings" and the $2B net revenue).

Uber employs apparently "more than 12,000 people," which is shocking, but salary still can't plausibly be the entire story here.

How about driver bonuses? Would those count as expenses, pr as the difference between gross bookings and net revenue? I know sometimes (especially in new markets) Uber let drivers keep 100% and then add bonuses on top of that.

I believe that bonuses and other incentives, to drivers and passengers, are the source of a huge amount of expenses and are counted out of the $2B net revenue, not included in the difference between bookings and revenue.

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