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Comment by austenallred | Hacker News Reader

This is kindergarten-level financial analysis from a socialist magazine. All this to say that Uber is losing money right now - we already knew that. Then a bunch of other random stories of other companies that have lost money in the past, including, well, some of the biggest and most successful companies on earth.

The question is will revenue overtake costs as it grows more quickly - no serious analyst would insinuate Uber will be gross margin unprofitable over the long-term. It would be awfully difficult to do so given they collect a percentage of every sale.

Uber has opened offices all over and has high fixed costs. It’s waiting on the small variable revenue from each trip to catch up with those costs, and the question is “will it?” That’s all.

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Not that the meta of your assumption is particularly interesting (as a discussion), but there is plenty of mainstream articles questioning whether Uber can make money long term.

https://www.economist.com/business/2019/04/27/can-uber-ever-... https://www.forbes.com/sites/lensherman/2017/12/14/why-cant-... https://www.wsj.com/articles/uber-wants-to-be-the-uber-of-ev...

> The question is will revenue overtake costs as it grows more quickly - no serious analyst would insinuate Uber will be gross margin unprofitable over the long-term.

How much room do they have to grow? Uber is already a, what, multi-billion-dollar company? If they're not gross margin profitable now, where's the tipping point?

> Uber has opened offices all over and has high fixed costs. It’s waiting on the small variable revenue from each trip to catch up with those costs, and the question is “will it?” That’s all.

What's the high fixed cost? App development surely can't cost that much. Drivers, server hosting, support, lawsuits etc. are all going to be variable cost.

> How much room do they have to grow? Uber is already a, what, multi-billion-dollar company? If they're not gross margin profitable now, where's the tipping point?

Lets consider Block Buster Video. Their business model was to use cheap access to debt to push out all their small competitors. This is Ubers business model as well. I'm not sure they actually made a profit that wasn't financed by debt for their whole 28 years in business.

Uber is almost the quintessential example of that old chestnut: Sure, we lose money on every sale, but we'll make it up in volume!

Except they don’t lose money on every sale...

There are two factors that make me think Uber isn't sustainable. One is that they're relying on drivers being contractors, which won't last. The second issue is that Tesla is coming and nobody will be able to compete with not having to pay any driver.

You'd think that a socialist of all people would understand that it pays off to bleed money in the beginning in order to get a market controlling position.

I don't think they like monopolies they don't control.

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