Uber discusses plan to lay off about 20% of employees | Hacker News Reader

Uber discusses plan to lay off about 20% of employees

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458 pointsceohockey60430 comments

Uber is a net destructive play. Yes, taxi was a broken model but what uber did is suck social capital out of taxi, put driver against driver, rent seeking and import money to America from the world.

A plague on uber and Airbnb. May they both rot.

Btw this is not just troll bait this is my honest opinion. I talk to taxi drivers and use taxi and these people got predated on for a thin profit outcome.

The sharing economy overall is a rotten model. Offloading externalities. It did give a kick to the taxi business because they had become overly complacent though so that’s a positive. But I won’t be sad either to see Airbnb and Uber die.

It's not just sharing, but it's platforms. One gatekeeper regulating an entire market of poorly paid workers. Everything from food delivery services to App Stores.

So the encompassing term would be, I think, gig economy.

I can't think of a single gig economy company that wasn't an ethical disaster.

At the risk of sounding argumentative, I will suggest Textbroker does a pretty good job.

http://writepay.blogspot.com/2020/03/the-textbroker-solution...

I don't think the gig economy has to be an ethical disaster. I'm aware a lot of gig platforms are awful in that regard, but I don't think it simply can't be done well just because it mostly hasn't been done well.

"Ninety percent of everything is crap."

I wasn't saying gig economy couldn't be done ethically, just that I've never heard of a case where it was. I'll take a look at Textbroker.

> "Ninety percent of everything is crap."

I never seen that applied to ethics before. I so hope it's wrong...

I was thinking more in terms of "companies in a new economic model getting some parts of it very wrong."

We try a thing, it goes horribly sideways, people freak out over "ethics," which often means large scale, social consequences that weren't necessarily readily apparent before you did the thing.

If you're talking about journalists and bloggers buying into the hype and only noticing problems once things "go horribly sideways", then I agree; it's also fair to point out that second-order consequences are very often not obvious, and only apparent in hindsight. Hell, in my more naive days, I was also bullish on some of those companies, before I started reading about and contemplating the issues that were brought up later on.

But the cynical me wants to point out that any particular company doing gig economy/"share" economy/locust economy[0] business has to design and understand their own business model. Many of the ethical issues are already apparent at this stage; when you look at Cost Structure and Revenue Streams segments of your Business Model Canvas, take a stock of regulatory requirements affecting you, you can already what corners you cut and who's going to get a short end of your value proposition stick.

So e.g. I do not believe AirBnB was initially aware of the impact their business will have on the housing market, but I'm rather certain all the evil shenanigans Uber pulled were intentional.

EDIT: also: I know that I'm being an armchair ethicist here, that it's easy to see the larger picture from a high horse, especially when one doesn't need to use said businesses. But to my defense: doing that is a valid market signal on its own; to the extent I don't deal with businesses I consider ethically challenged, and discourage others from dealing with them, this sends a (however small) signal to the free market that those issues are something that matters to some customers, and are worth competing on.

[0] - I only now remembered this article, https://www.ribbonfarm.com/2013/04/03/the-locust-economy/. Worth pointing out that it was written in 2013, about when the "share economy" hype was at its peak, and everyone wanted to do a startup with this model.

AirBnB pivoted. Their initial model was more like paid couch surfing and that's not what took, basically. So, no, I don't think they really knew what they were getting into and I don't think they intended it to go where it went.

I think the efficiency gains of the gig economy are real and can potentially benefit all parties. The fact that they often don't is something that I tend to "attribute to stupidity rather than malice" as the saying goes.

I'm really short of sleep and maybe that's the problem here, or part of it. I'm happy to discuss this with you, but I wasn't accusing you of anything at all.

I have thought a great deal about this and I run r/GigWorks because I feel strongly that gig work can be "the next industrial revolution."

When I was homeless and began doing gig work, I sometimes made like $1.25/hour, which is terrible. But it was more than I would have otherwise had and it allowed me to build towards something better and it made sense for me.

When I'm having a good a day, I can make more like $20/hour these days. The flexibility mattered to me and I continue to struggle to articulate the very real value of details like that.

We keep raising the bar and raising the bar until you have to have a PhD and be making a mint to have any hope of moving out of your parents basement, so to speak. And that's a problem.

Thanks for your detailed reply. I'm open to being wrong in my views about the gig economy, and will happily continue this conversation in an e-mail.

I know you weren't accusing me of anything; it just occurred to me, while writing n-th comment in this thread, that what I write may be perceived as arrogant or pretentious, so I wanted to add a caveat about it. I know you actually depended on gig work, which is a perspective I lack.

You are more than welcome to email me. I'm very short of sleep, so nothing is occurring to me as something more I want to say, but I'm happy to reply to you about your thoughts on the topic and engage in further discussion.

Cheers.

I'm curious, what makes you certain Uber has been malicious?

There are certainly positive aspects, but I think they are mostly for short-term money problems.

The main problem with the gig/platform economy is that in a sense it's the worst of both worlds: those in favor of a laissez-faire economy will see that markets are regulated anyway (not by governments but by corporations); and those in favor of government regulation also lose.

The problem is that for most gig economy companies, the entire point was to shift a large percentage of the risk onto their quasi-employees, so that they could undercut companies that actually paid benefits and right-sized their staff to meet long term demands. The entire premise, for at least most gig-economy companies, was rotten.

That doesn’t mean that a company that’s genuinely based around providing consumers access to rarely distributed skills and products is necessarily bad. But it’s got to be the kind of service/product that the company couldn’t offer via traditional staffing methods.

I'm still hoping for those platforms to eventually get displaced by ones run by foundations or coops. Sure, those have a hard time initially competing against platforms powered by infinite greed, but in the end being trustable by the vendor side of platform users should be an unbeatable advantage.

Calling it "sharing economy" is doublespeak. Most AirBnB hosts and Uber drivers are not just occasionally letting spare space in their homes or picking up strangers who happen to be going the same direction.

AirBnB hosts are short-let landlords, same as any other operator of holiday lets.

Uber drivers are minicab drivers, same as any other minicab driver.

They like to pretend otherwise in an attempt to bypass laws designed for consumer and worker protection.

> Most AirBnB hosts and Uber drivers are not just occasionally letting spare space in their homes

I don't believe this is true for Airbnb, both anecdotally and from Airbnb's own statement about NYC:

> "87 percent of Airbnb hosts in New York share only the home in which they live.”

https://skift.com/2014/02/13/airbnb-in-nyc-the-real-numbers-...

And the other 13% make up what percent of new York Airbnb stays (for, say, 2019)?

That's misdirection. 87% of hosts, sure, but what percentage of rentals? Does it matter if there are a lot of accounts that only list a few days a year?

Notice that 2/3 of rentals are for entire apartments, the hosts that share their own home clearly can't do that very often.

I agree. I'm curious why you chose to reply to my comment with this complaint when I was directly responding to the claim, which you quite reasonably view to be "misdirection," in the parent comment.

frobozz wrote:

> Most AirBnB hosts and Uber drivers are not just occasionally letting spare space in their homes

you replied:

> I don't believe this is true for Airbnb, both anecdotally and from Airbnb's own statement about NYC

and provided as evidence:

> "87 percent of Airbnb hosts in New York share only the home in which they live."

ric2b replied:

> That's misdirection. 87% of hosts, sure, but what percentage of rentals?

My reading is that ric2b's was implying that whilst 87% of _hosts_ might be sharing their own home, if you were to look at rentals then there would be a different picture, presumably on the basis that the other 13% are "sharing" multiple properties.

ric2b's accusation of misdirection was aimed at your 87% claim, because, whilst it was technically accurate (unlike what frobozz said), it "misdirects" from the more important picture, which is that, to quote frobozz opening sentiment:

> Calling it "sharing economy" is doublespeak.

That being the case for aforementioned reasons.

That article is from 2014. This one from 2017 says otherwise.

https://skift.com/2017/03/10/airbnbs-growth-is-being-driven-...

In the US as a whole, 64% were renting out an entire home unit. Obviously, some of those could be owner-occupiers letting their own home whilst on holiday themselves.

I have no trouble believing that Uber and AirBnB may have started out as facilitators of sharing. However, that is not what they have become.

I may be wrong in saying "most hosts". There is a potential long tail of thousands of not-very-active spare-room hosts. However, do such operators count much terms of numbers of stays and money spent?

A) That’s from 2014. The market has changed

B) I do not trust AirBnB to not lie or twist the numbers; they have an enormous incentive to do so

C) This does not align with my experience, having both rented and lived near units that were clearly taken off the market for purely short term rental.

B - They have done so.

Their 2015 NYC stats had several commercial hosts excluded, making it look as though they were still just a way to make a bit of pocket money from your spare room.

Yes, and NYC is among the most expensive real estate markets in the world. I'm not surprised most people renting out an Airbnb can't afford a second property. I'm positive that outside of NYC the numbers look different.

Yeah, Airbnb is an interesting case. I've used some nicely built apartments in peoples backyards and i've stayed in apartment buildings where there are full-time resident neighbors, but the apartment itself is purely Airbnb.

The latter I find odd because I can only imagine the impact on local renters, I also assume the ones that draw up the leases are the ones renting this our via airbnb. I bet everyone else has a no sublet clause.

> import money to America from the world.

While I wish this were true, Uber is yet another tax dodging corporation like so many others: https://fortune.com/2015/10/22/uber-tax-shell/

That's the funny thing: all these tech companies are basically bleeding the rest of the world dry (Facebook is basically killing local newspapers across the world) and then they're hoarding money.

But it's disingenuous to pretend there aren't any benefits for the US as the hundreds of thousands if not millions of people working in tech companies in the US for very high salaries can attest. Very high salaries both for the US and definitely for the rest of the world.

hundreds of thousands if not millions of people working in tech companies in the US for very high salaries can attest

I think you are off by one or two orders of magnitude.

Nope, not really.

According to various sources the number of software developers in the US is around 3.3 million (https://dqydj.com/number-of-developers-in-america-and-per-st...). Even by a pessimistic estimate, let's say that 25% of these have very high salaries compared to the average or median wage in the US. Either because their seniority or because they work for big companies.

So that would mean something like 0.8 million.

Now, on top of that, add associated engineers working for tech companies, add middle managers (which are generally paid more than individual contributors), etc., and it's easily 1 million highly paid individuals.

Just think about it: Amazon, Microsoft, Google, Apple, Facebook, Cisco, Netflix, Oracle, IBM, Adobe, Uber, HP, Verizon, AT&T, Intuit, ServiceNow, VMWare, Salesforce, Workday, Dell, Intel, Qualcomm, Ebay, Paypal, Activision, and probably another 1000 companies with at least 1000 employees in the US, that I don't know. Plus non-tech companies that have huge tech departments, such as Walmart, and that pay salaries that are competitive with the ones paid by purely tech companies.

On top of that, American software devs have no idea how good they have it. In Europe getting 100k as a fresh grad is impossible even in Switzerland (Switzerland having much higher salaries than the rest of Europe), unless you work for... a US giant (FAANG). And those spots are a minuscule part of the tech world in Europe. And now imagine that Europe is better off than 95% of the rest of the world.

The idea of a regular Joe Developer having a decent shot of having made (made, not saved!) a million by the time they're 35 is frankly ludicrous for most of the rest of the world.

The drivers and engineers are filing plenty of 1040s and W2s regardless of whatever Uber files.

As Uber will happily insist to you, "drivers aren't employees of Uber".

So they file a 1040 instead of a W2.

How many drivers are making enough money to pay any kind of substantial taxes? They work for next to nothing.

You’re asking me? Who bloody knows? They still have to file, contribute to Social Security (the employer and employee side) and pay whatever income tax they owe. For some, it isn’t their only job, and for others, they make their own choices about how many hours it is worth driving.

They’re neither slaves nor indentured servants nor necessarily any worse off or better off than your average Café worker. They make the choices they make in exchange for a paycheck, no different than you and I in that regard. The income they receive goes somewhere, and some of that goes to the government in the form of taxes, no different than your or I. Feel free to dig into the numbers yourself to figure out how much, but figure in that some of that is likely going into the car, which means auto shops and car dealers, some of that is going to coffee or tea, some of that is going to their rent, and some of that is going to the food they eat. All of which is eventually ending up in someone else’s paycheck as taxable income for which some will file a W2 and others will file a 1040 whether that’s tomorrow or 20 years from now.

one could argue with Uber having almost never made money it's redistributing VC money to ordinary people. just about the only upside

If these drivers are unhappy they can choose not be drivers ? Both these companies eroded existing shitty models. I'm a happy consumer.

> If these drivers are unhappy they can choose not be drivers

This is oversimplified to a painful degree.

How so? Coming from the service industry, I have noticed many including myself work hard to escape and progress. If people want more they need to earn it.

>A plague on uber and Airbnb. May they both rot.

Don't agree with that. It is a new model which have advantages and disadvantages. You would know if you are a foreigner in a remote town and want to get a Taxi. If the model is bad the market will correct it eventually. I think what's bad is the VC's funding or persuading founders to continue to run with loss making business models for cornering the market. These companies then pump huge marketing money without a profitability in near future. That destroys the local competition if any and skew the market towards them for a while. Sometimes it will work out but many times it would fail. Again time will correct the practice if it's not sustainable, we have to wait.

Also Airbnb and Uber have enabled lot of people earn livelihood without having to wait for trade union approvals for sharing taxi stands or getting hotel licences. If the model is sustainable it will go back to old models, but i feel it's gonna stay whether through Uber or other service(s).

>import money to America from the world

What about CocaCola, Pepsi, Amazon (and AWS) Google, Microsoft, Facebook, Nike and hundreds of other brands ?

Well it is a two-sided platform market that may very well be sustainable.

However it is set up to extract rents from both consumers and drivers, which is a problem for the latter. In effect, it captures profits from transportation markets and sends them to a company in the US.

And that may be both sustainable, since its a platform market, and it may create suffering and poverty for many drivers.

Handily, the existence and further political support for traditional taxis implies that a regulatory approach on competitive misconduct is unlikely. So these companies may not only be economically stable, but even in terms of competition policy.

In any case, I hope you see the difference between companies selling a product, and those selling a platform, for a local economy.

> If the model is bad the market will correct it eventually.

The "model" of selling leaded gasoline took 90 years to correct. I'd venture to say that the market correcting itself after a lifetime is not what most people want.

Not that I care in this case, just pointing out a flaw in this logic.

It took that many years to collect enough research and attention on the topic, and then force the industry's hand by regulatory measures, and it only worked because when the lead phaseout started, there already were alternatives developed. Without all that, the market wouldn't self-correct at all.

I mean, it's such a common failure mode of free markets, it should IMO be taught to kids in schools. If a product/service has damaging side effects that aren't immediately apparent, or the damage is diffuse, or takes a long time to manifest, then the market is blind to those costs. A product that mitigates these side effects is usually more expensive. Such a safer alternative isn't competitive on the market and won't succeed until it becomes as cheap as the less safe one (or cheaper than it).

Conclusion being: don't expect the market to correct against profits on its own. In fact, it will resist correction, so for the change to happen, you need strong regulatory pressure and/or innovation aimed at making the correction more profitable. In reality, you need both.

> Lead's toxicity was recognized and recorded as early as 2000 BC

Not quite, it was known to be a bad idea at the time, and there were alternatives available. So...why? Because market control, patents, and the usual cast of idiots having nothing to do with "doing the right thing":

https://www.smithsonianmag.com/smart-news/leaded-gas-poison-...

Except AirBNB has been shown to radically distort local housing markets.

> Also Airbnb and Uber have enabled lot of people earn livelihood without having to wait for trade union approvals for sharing taxi stands or getting hotel licences.

There were reasons those approvals and licenses existed in the first place, as a lot of cities are learning right now. That said, shortcomings were also revealed.

> but i feel it's gonna stay whether through Uber or other service(s).

I don't mind the other services, in particular ones that can take what works and what doesn't, and do it like civilized people do - by working together with the cities to provide said benefits in a legally above-board framework, and without disastrous externalities.

As for Uber, may it rot in hell.

> What about CocaCola, Pepsi, Amazon (and AWS) Google, Microsoft, Facebook, Nike and hundreds of other brands ?

I don't think any of these brands ever claimed they're a poor upstart fighting the good fight against the Evil Taxi Mafia (whereas in reality, they were VC-backed international corporation, leveraging their deep purse to conquer market after market, extinguishing local competitors).

We'll die waiting for market correction on climate.

I live not in USA, and before Uber taxi services were a total mess.

I would bet Uber has created wealth, a lot of it. Uber didn't just sway rides from Medallions, i would imagine it increased rides by manifold. Note: Not considering environmental impact. (E) I'm not saying it's a flawless model, but you can't discount how it led to more people taking ride shares in contrast to car ownership. I think this is obvious in urban areas.

Genuinely curious about this cycle of opinion on Hacker news. It's trendy to shit on these companies until it's not.

could you explain more about "created wealth" especially related to your point about "it led to more people taking ride shares in contrast to car ownership" .

rides are cheap because Uber is doing actual dumping of taxi industry by operating on a loss. Uber drivers are earning very little + spending money on car maintenance etc. so basically only one benefit is cheap rides but even this is damaging overall system and is not sustainable.

so again.. where is that wealth creation (apart uber itself maybe)?

Looking at it from my consumer perspective Uber is net positive - even if it ends up being unsustainable and goes bust eventually. The prices in the local taxi market didn't go down a few % it got fractionally cheaper - it went from being barely affordable and only used in exceptional cases to a substitute for car ownership and not having to think about using it (depending on your daily commute). The market expanded incredibly around here.

Also traveling around with Uber is a great experience (in countries that didn't ban it) - the service has been consistent across Europe and it's another thing I don't have to worry about when travelling - not having to navigate public transport or roads in a foreign country while also being relatively sure you're not getting ripped off by the local taxi service is amazing.

> The prices in the local taxi market didn't go down a few % it got fractionally cheaper - it went from being barely affordable and only used in exceptional cases to a substitute for car ownership and not having to think about using it (depending on your daily commute).

That's because they loose money with every ride? I mean it really can't be cheap to have your have your personal driver for your daily commute.

The thing is there are other taxi services locally that are competing with Uber at similar prices. Even if prices went up 30% it would still be in the "I don't have to think about it" territory.

I'm not sure how this is possible as afaik taxi fares are heavy regulated. Just because Uber subsedises rides no city council will change the taxi fares.

https://www1.nyc.gov/site/tlc/passengers/taxi-fare.page

Oh I should mention I'm in Europe and have no idea about how Uber works in the US.

"Taxi" taxis are not the only types of services like this. Depending on where in the world we're talking there have been other companies - often locally run or covering a few neighboring countries that use the same model Uber is using. Or offering similar ridesharing options via a phone since 1980s or 1990s.

In my area (Eastern Europe) Uber matched the prices of other unofficial "taxi" services that existed for 40+ years. However, the convenience of having an app, not dealing with cash, ability to see your driver getting to meet you, etc. boosted the number of taxi riders tenfold.

Many other ridesharing companies are offering apps these days, too. So even when Uber goes bust, the industry won't revert back to cash payments and phone numbers. So like the grandparent said it's a net positive for consumers.

Do you know NYC and SF are not the only places where people live?

Yeah, i'm from germany but most people here would have trouble reading german taxi regulation.

A lot of places there is a sharp licensing distinction between requirements for those who want to be able to pick up unscheduled passengers on the street or taxi ranks, vs. those who only pick up on request or from their own locations. Overall the latter category tends to face far fewer limitations and be a lot more competitive.

They do not lose money with every ride, at least according to their most recent investor presentation [1]. Their rides segment is already profitable - albeit on an EBITDA basis, but with decent and growing margins.

[1] https://s23.q4cdn.com/407969754/files/doc_financials/2019/sr... (slide 15)

Of course it's a net positive to consumers. It's a business being run at a loss, and propped up with constant capital inflow - i.e. a massive transfer of wealth from investors to consumers.

My point is that it's not just about operating on a loss - other companies locally are competing with Uber and amongst each other and the market that was once protected by shady licensing monopoly is now open wide - even a price increase of 20-30% will not change the way I use taxis right now - and that would be very sustainable (I don't see local uber as a loss generator with their pricing as the other taxi companies are able to compete - the marketing money Uber is sinking is probably what's generating the losses)

A price increase of 20-30% may not effect how you use taxis, but it will effect how lots of other people use taxis, and because loads less people will use taxis at 20% more they won't need to charge 20% more, they'll need to charge 20% + their decrease in utilization. Suddenly you're in a death spiral where they can't charge enough to make a living at any price.

I doubt this. Initially when Uber arrived there was no regulation around here - the prices were ~30% lower and people driving Uber were actual part time drivers with clunky old cars - this was the ideal Uber time for me because in my smaller hometown I could get a ride almost instantly in any part of the city and I didn't care about ride quality if I didn't get dirty or smelt bad after I left the car. After taxi protests the government stepped in to basically enforce rules where part time driving became really hard - you have to have a car newer than 5 years, need to have some sort of work contract - not necessarily with Uber but a lot of forms of started small companies that then partner with Uber - but you no longer had limited taxi licenses - anyone can get a car and setup Uber. This resulted in prices eventually rising by 30-50% depending on the city, more importantly it resulted in lower availability in smaller places because it blocked small part time drivers. At this point local taxi companies are still complaining but there are now taxi services cheaper than uber depending on mileage. So in a way this Uber market transformation already happened.

Like even at current prices an average taxi ride is 2-3x cheaper than it would be 10 years ago when it was basically a government granted cartel. And you were at the mercy of the driver randomly quoting you whatever he though you would pay in a lot of situations. Uber brought a lot of consistency and availability to the market.

I'm an consumer, not an investor, so I'm more-or-less fine with this. How many examples do we have of staggeringly astronomical transfers of wealth to investors from consumers? I'm not going to cry over billionaires and millionaires becoming slightly less so.

I mean, if you thought the transfers were going to last forever, I have a bridge to sell you. Their plan the entire time was either to bankrupt everyone else and charge monopoly prices, which would be worse for the consumer, or to develop A.I. cars and fire the humans, which has other consequences.

I don’t think you can charge Monopoly prices when the barrier to entry is so low. Without robot cars anyone can compete locally with Uber. With robot cars they win, but again not sure they can raise prices much.

The barrier of entry appears to be billions of dollars worth of VC cash, so I’m a bit less optimistic.

But regardless of whether they can pull it off, I’ve always viewed Uber as a wolf in sheep’s clothing. Sure, they’re pro-consumer now, but they absolutely intend to go anti-consumer the moment they’re given a chance.

> The barrier of entry appears to be billions of dollars worth of VC cash, so I’m a bit less optimistic.

The barrier of entry to what? Sure, the barrier of entry to autonomous cars without drivers is extremely high, but even if Uber is the only one in the market that possessed the technology, they wouldn't be able to drive market prices for taxis higher than the cost of a drive in a manned car. I don't know about you, but I have no real preference for driving in an unmanned car if the manned option is significantly cheaper.

The barrier to entry into the market, not the barrier of entry to self driving cars. Uber raised $24B, and Lyft raised $5B (and they’re not even making a self driving car). To my eye these are the only two that’ve ever gained any significant success, as I couldn’t name any other options, and googling produced a small smattering of apps that don’t even work where I live.

I entered into the discussion with the context that Uber slashed local taxi market prices to a fraction of what they were previously so that might be where we had different assumptions. I'm saying that even if Uber turns anti-consumer, the situation can hardly get worse than it was so it is probably a consumer win.

[I can speak only from a UK perspective] surely it's convenience, not price? It's a generally good, convenient service built around an extremely slick and extremely usable app. Maybe it's slightly cheaper than local, but saying it's slashed local taxi prices? The only time Uber seems drastically cheaper is when it's entering an area and is operating at a much-higher-than-normal loss in an attempt to drive out competition. Once that period is over, it seems to use surge pricing very heavily, so often ends up more expensive (to their credit, they're normally quite good about refunding overcharges if they happen)

It is a consumer win, I'd agree with that, but I'd argue that's not to do with cost. Same as Amazon.

Taxis were super expensive before Uber.

This seems an incredibly general statement. Where? As I say, maybe this is just UK? Maybe taxis are more expensive or Uber is much cheaper outside the UK? But in the UK Uber isn't drastically cheaper except when they're attempting to crush competition in an area by burning cash. Which is great for consumers! But that doesn't go on for very long, the prices creep back up because it's not sustainable.

In my European country, taxi prices were exorbitant and taxi usage was very low. You only used taxis on very special occasions, like getting to your destination from an airport or train station. Once Uber came, taxi prices dropped drastically and several new local companies formed to try to compete, many of them with their own (less slick, but still very usable) apps.

Overall, Uber seems to have introduced healthy competition and taxi usage has changed from rare to commonplace.

"In my European country, taxi prices were exorbitant and taxi usage was very low." <-- this is so true. in France (to give another example), this is even worse: in Paris you don't pick the taxi, the taxi picks you (and if where you're going doesn't fancy them, they will refuse you... which they legally cannot do, but they still do it). Taxis were an entrenched rent-seeker, they were in need of disruption, for the public good. I'm not necessarily a big fan of Uber, but the taxis as a corporation deserve the competition.

And that's not even taking about the phone app and its capabilities, which were just out of reach of regular taxis (even the taxi companies that own a large fleet, these are still very small and have no tech capability). IMHO that's another front where the competition was healthy.

Isn't that only the barrier to entry worldwide? If they started charging monopoly prices with our robots then local taxi services would start coming back

I don’t know what it would cost to enter local markets only, but I suspect that has less utility than being national or international. I don’t want a taxi app per city, I want the same app to get me to/from LAX to get me to/from JFK, and I doubt that’s my particular quirk.

On the latter, I don’t know what would happen if they charged monopoly prices. I suspect you’re right, cabs might come back.

But _most_ of the time you'd be using the one in your city.

If you are from Manchester, UK and you live there, how often do you need a taxi app that works in Bangkok, or NY, or Oslo?

Maybe I’m unusual, but use of Uber is overwhelmingly travel related. The only time I use it in my own city is transit to/from my airport, because I can’t easily use public transit.

Car AIs are coming. Whether Uber, Waymo or someone else, they're coming. Nothing will stop that train.

Plenty of things could slow or derail that train for many years.

We could, for example, discover that getting the required accuracy outside of areas with specific characteristics is infeasibly hard to solve in general, let alone with the onboard computer.

We could have one or two horrific accidents fuel legal crackdowns that forbid driving AIs for a generation or more.

Its coming, there is no doubt there. The question is: when? There are a lot of technical issues to solve, and Uber's capital burn isn't going to last forever. Are they (and their investors) willing to hold their breath for decades for truly safe, truly autonomous vehicles?

I was very bullish on self driving cars back in 2016, but nearly half a decade later and it doesn’t seem like we’ve made any progress at all, and it seems like a decent number of experts and industry insiders agree with me.

Self driving cars are coming, sure. But when?

Maybe in a few decades. The imminent arrival of autonomous vehicles has been BS from the beginning. Our machine learning capabilities aren't anywhere close to making the idea viable.

That may be the plan, but SoftBank and the Saudis are not exactly smart money.

Maybe not astronomical but I really enjoyed Moviepass while they existed.

I mean, same - my main point was that it's not sustainable. Sooner or later SoftBank and the Saudis are going to run out of patience, so just enjoy it while you can.

Uber reported profitability in their last earnings statement with high confidence of being fully profitable this year, before the pandemic happened.

Various regions have been profitable for years and the company has spent a lot on growth and marketing. It seems they're finding an optimal price that is sustainable but still much better than anything that we had before.

That's why you can't look at it just from your consumer perspective. The only thing necessary for the triumph of evil is to hide it from good men behind a layer of indirection.

Another thing is: taxi innovation isn't either Uber or nothing. All these improvements Uber boasts about could have been achieved (many were achieved in some places) without tolerating illegal business practices by a thoroughly sociopathic international corporation. Maybe the progress would've been a bit slower, maybe there would be more competition on the market (which is usually considered a good thing). But it would be there, and done the way civilized people do things.

And before someone replies, "but MLK was also doing illegal things!" - which is a response I see surprisingly often in Uber threads - let me remind everyone, that MLK was engaging in civil disobedience to fight for the common people and a just cause. Uber is a for-profit company with long and documented history of antisocial behavior, and one which only cares about dominating their market by dumping any and all externalities onto the society at large.

It is fine for consumers to look at things from a consumer's perspective. And it isn't controversial that Uber is offering the consumers a fantastic deal.

The real question to me is do Uber's stockholders understand that they own the stock, or ar they indirectly holding them through some sort of pension -> managed fund -> ??? style chain where they are exposed to the madness without realising it.

As long as Uber's owners know who they are, it is on their heads if burning money turns out to be a bad idea. Not a problem for the rest of us, if we can be confident we don't own the company.

Assuming the government doesn't helpfully bail them out at some point.

>> they indirectly holding them through some sort of pension -> managed fund -> ??? style chain where they are exposed to the madness without realising it.

This is the main reason why big companies are never allowed to fail. Why banks and all the traditional giant establishments continue to live. It's also why publicly listed companies that have been dividend paying for some time would rather layoff employees when growth prospects are scarce than to rather maintain them on payroll.

So if your company's stock is ever owned by government/pension funds, you'll have a pretty good argument for getting bailed out until you find your next trick.

> It is fine for consumers to look at things from a consumer's perspective.

That's just refusing to exercise personal responsibility. I'd hope an average consumer is capable of more than that.

People shouldn't assume the free market will somehow optimize for fair play, because it doesn't. The market quite directly optimizes for the things people (in aggregate) use to discriminate between purchase options; unless people vote with their wallets on the conduct of companies, you cannot expect the market to provide your conscience for you.

[Obsolete]

Fair enough. I'm sorry. I'll edit it out. To my defense, I assumed the phrase was overused in popular culture to the point that it doesn't evoke the Holocaust anymore, but I may have been wrong about it.

>> It is fine for consumers to look at things from a consumer's perspective.

This, in combination with 'small government' and deregulation, is a recipe for a race-to-the-bottom disaster where everyone gets shafted (including the customer themselves) except the big corporations that run the whole show.

I think it has been sufficiently shown by now that making everything as cheap and abundant as possible, everything else be damned, is a net negative in the long term.

> making everything as cheap and abundant as possible, everything else be damned, is a net negative in the long term

The supply chain flavor of that is playing right in front of us now.

> "Looking at it from my consumer perspective Uber is net positive - even if it ends up being unsustainable and goes bust eventually."

Leaving behind what options for short-range travel? If Uber goes bust and in the process, they've killed off both their competition and traditional taxis, what options does that leave for short-range individual commuting where bikes and scooters aren't sensible?

The Uber model is pretty easy to duplicate. See e.g., http://www.rideaustin.com/

Sure. But why would anyone pursue it if they've demonstrated that long-term it's financially insolvent?

Presumably prices will increase to a sustainable level if the big VC-money-burning firms go out of business. I can see ride sharing becoming more expensive -- I just don't see any future in which it goes away.

Even mass transit is experimenting with Flex semi-fixed routing.

A net positive from a consumer is not equivalent to a net positive for society.

I mainly agree, but quality of taxi services varies from location to location.

Agree the business model is questionable, but it's a great example of using technology for an essential service.

Uber pulled off a massive bait-and-switch in India. Offered drivers incredible bonuses, baited them with "rumors" that the bonuses were permanent, encouraged them to apply for loans to buy cars and even has a financing program of its own.

And then they pulled out the bonuses, practically forcing drivers to work 12+ hours/day (some even sleep in their cars) just to make minimum loan payments. No driver I've ever spoken to has been happy driving for Uber, but they do it because they have a car to pay off

To be fair, they sound like any new car dealer here (get the sale and often the auto-loan sale as well).

Except these people would never get loans without Uber's backing. Indian lenders are notoriously risk averse and make it very hard for self-employed people to get loans.

Moreover, without Uber's (formerly) juicy carrot, they would never be in the market for a car in the first place

As a consumer, Uber and similar businesses are an enormous net positive. It is a much better experience than taxis.

It enabled me and my family to get around. Even if taxis had a consistent app across cities, the quality of the vehicle tends to be much lower and the drivers are not as kind. That may be just because Uber drivers can be reported much more easily than a taxi driver.

For smaller cities with a low taxi density, many Uber drivers treat it as an additional source of income to a primary job and I've had a lot of "stay-at-home" moms pick me up in Rochester NY. In NYC, I've noticed the opposite, with most Uber drivers treating it as a full-time job.

Lastly, without Uber, my wife and I would have had to purchase another vehicle. Thanks to Uber, sharing a single vehicle works great when we can't sync up start/end times for work (pre-quarantine).

In most larger cities the Uber drivers are either now taxi drivers using personal cars, or are beginning to behave exactly like taxi drivers do.

I agree 100% on airbnb. I disagree completely on uber. Uber is safer, better and fairer than taxis. The strategy of growing it quickly is aggressive and clearly short term but the value of having uber in a community where driving is the only option makes drinking out so much safer. Girls getting rides alone are protected by verifying drivers, having so much more data for the entire trip and transaction. They clearly were able to gain market share with vc backing, but I will 100% take an uber over a taxi every day.

This feels like an odd question to ask, but are they losing money faster or slower now? They were previously spending billions in marketing costs, and it sounded like at least some rides were a net loss.

People would say things like “losing money on every ride” but this didn’t appear to be correct based on the released financials. It was more like “making some money on rides overall, but spending tons of money on overhead”. Losing ride volume only makes that situation worse.

But that overhead was largely marketing and they bundled discount prices into marketing expenses.

If you look at the Uber 2019 annual report, page 64, you can see that revenue was $14.1B, cost of revenue was $7.1B, and sales and marketing was $4.6B.

$14.1B - $7.1B - $4.6B = $2.4B

Driver bonuses fall under cost of revenue, and user promotions fall under sales and marketing. It’s only after subtracting other overhead that the company becomes unprofitable.

Other overhead includes operations and support, research and development, and general administrative. If you read the descriptions of these categories it becomes apparent that they are going to need to lay people off if they cut spending there. Sales and marketing also includes a lot of headcount.

All the above math includes both rides and eats. There are other numbers in the annual report that show that rides is making more money overall while other areas are losing more.

For those wondering where the rest of the $$$ went, the main other costs were about $5.8 billion to R&D, and $3.3 billion to “General and Administrative.” Although, R&D costs were very inflated in Q2, due to stock payouts and whatnot related to the IPO, in the other quarters R&D costs were well below Sales and Marketing. So normally “cost of revenue” and “sales and marketing” would be the top two categories, then R&D.

Realistically, they need to cut from pretty much everywhere, especially with revenue tanking during COVID. Even without that one-time IPO related payout of about $3.6 billion last year, they still would’ve burnt ~$5 billion. Their losses this year, with massively decreased revenue due to COVID, could probably be $10+ billion (if they didn’t lay people off). That’d be for non-IPO costs staying static while revenue drops ~35%. And I believe their nest egg is only ~$10 billion, so that’s very roughly around 1 year of runway, much too short. They need to cut a LOT of costs.

In 2019, Uber's selling and gen admin costs were $7.9B though, which was more than their gross profits of $6.9B.

By your definition many successful companies would be performing poorly as they immediately invest all their profits.

Marketing is an investment, because the benefits of marketing are in the future and are aimed at increasing business.

You're getting downvoted but GAAP treatment aside it's actually an interesting business question.

It's often useful to think of marketing expenses on a continuum between "upper funnel" and "lower funnel". "Upper funnel" expenses tend to be more like investments (Brand TV advertising).Lower funnel tend to be more like "cost of sales" (promotion to buy more).

Marketing spends on direct user acquisition tends to fall somewhere in the middle and that's where the whole controversy lies. One could argue as many start-ups have done that only if you acquire users aggressively will your future growth come and hence the spend is more "investment like".

One could also argue that consumers are disloyal and will take their business to whatever "good enough" competitor exists that offers better value.

A few decades of academic research in buyer behavior suggests that the latter is the norm in consumer facing industries (soaps, corn flakes, hotels, air tickets...). Purchase behavior in these industries tend to follow very well defined patterns (NBD-Dirichlet) but of course network effects, patents and regulatory capture can up-end this (Google, Facebook Comcast, eInk Corp...)

In many ways, the marketing models of Uber and similar startups are bets that network effects break the patterns.

I think "fake it till you make it" is a proven, successful marketing strategy aimed at bringing actual business later on.

When investors bring money they don't necessarily need to have profits immediately, it is ok to risk some of it for promise of future benefits (that is very definition of investing).

I understand subsidizing rides might be questionable way of doing this, but do not mistake it for invalid business model.

Employing children from poor asian countries to produce clothes you are selling is questionable but it sure as hell is profitable unless we collectively decide to make it unprofitable by outlawing or penalizing it in some other way.

In the end, if we think rides should not be subsidized or maybe drivers should be paid enough to have a living there is nothing stopping us from electing reputable representatives that can be trusted to do just that.

Sure, marketing is an investment. But sometimes what get categorized as "marketing" is really just subsidized pricing. Sure, low pricing will get more people using and interested in your service/product, bit if the unsubsidized version of your product is unrealistically high, then you are just rearranging deck chairs.

That's only a problem if you can't get off the ship before the IPO.

There's a big difference between "Let's build a viable and sustainable business" and "Let's build a hollow shell of a business by carpet-bombing potential retail investors with metrics management, PR, and brand marketing, and then cash in with an IPO and/or a sale to a Greater Fool."

There's been more of the latter than the former in this round. But the tide has gone out now. (See also WeWork, etc.)

Based on my observation of Uber and similar businesses, they are likely losing money slower during this downturn, and this layoff will help preserve more needed cash.

Less rides means less revenue but also less cloud compute cost to serve them, payout to drivers, and certainly no driver subsidies at this point, which during normal times is quite costly. Many of these are variable costs tied to ride volume.

The only major fix costs to operating Uber's ridesharing business is people, office commercial leases, and maintaining IT infrastructure (I believe Uber operates its own cloud, but not 100% sure).

And now it's cutting the "people" part to preserve more cash for the long-haul.

According to their last earnings call, Uber's rides business was making enough profit paying for all of R&D costs. It's been a long time since the "losing money on every ride" narrative was true.

Weren't the massive quantity of discounts required to entice people to use them factored into marketing? Further I believe they counted the entire price of a shared ride as "revenue" while they only counted 30% of regular rides, even though shared rides likely made them even less money? That would restore the narrative.

Their annual report[1] shows 2019 revenue of $14.1bn, with cost of revenue of $7.2bn and sales and marketing costs of $4.6bn.

Both cost of revenue and sales and marketing (for simplicity's sake I'll call these "direct costs") grew proportionately to revenue growth year on year from 2018 to 2019, running at 77% of revenue in 2018 and 83% of revenue in 2019. The 5% swing there is almost purely marketing: cost of revenue was 49.8% of revenue in 2018 and 50.9% in 2019, whereas marketing grew from 27.9% to 32.6%. So they could be hiding subsidies (prefer this term to discounts) in marketing costs, although it's not such a significant figure that it loses them money.

It's conceivable that they're still doing some hocus pocus with the treatment of pool revenue, but it would have to be a significant portion of their revenue for it to have an impact. I can't find the disclosures on this if they're in there (although they do disclose that they treat three people pooling as three rides, which seems fair enough).

The business suffered a 2.8x increase in losses from operations -- $8.5bn up from $3bn -- but this appears to mainly be attributable to R&D costs growing from $1.5bn to $4.8bn YOY.

[1] https://investor.uber.com/news-events/news/press-release-det...

The cloud compute cost for an individual ride can't even be one US cent!

Surely?

Supposedly lyft’s cost per ride was $0.14:

https://mobile.twitter.com/mohapatrahemant/status/1102401615...

How much of the expense is directly for a ride versus other support activities? I imagine everything from 1099 and taxes to dev qa staging runs on aws?

Interesting!

All their AWS costs are probably not ride related, but most probably are, one way or another.

The marginal cost for one more ride, is probably much smaller, but I don't know that that is the right way to think about this.

Likely faster, considering the largest cost (employee salaries) is staying fixed. Which is probably what triggered these layoffs.

I've asked The Information to unlock this article for HN readers (see https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...) but in the meantime the hard paywall means we have to bury it.

Edit: done now. Thanks!

Will be keeping an eye out for it, thanks!

There is an older Hacker News comment by an Uber employee about how they built and maintained their own chat app. I suspect they realized that not everything need be custom.

https://news.ycombinator.com/item?id=20931644

and then in the replies to that comment, it's revealed that they actually did not build and maintain their own chat app, they just had a custom-branded release of mattermost.

probably not the best example of not-invented-here syndrome.

And now they are on Slack. https://markets.businessinsider.com/news/stocks/slack-stock-...

Yeah, except they did rewrite the entire Mattermost mobile clients in React Native (And contributed it back, too - https://eng.uber.com/uchat/) Look, I'm all for Uber firing some of their 27,000 employees (27,000 seems like the wrong number), but their engineering team make a tonne of cool stuff and are really good open source citizens. H3 Geospatial indexing, Kepler.gl, and yes the Mattermost react native client - I use them all every day. Maybe let's trim in the HR and marketing departments, instead?

How many of these contributions have became part of Uber's core business? I agree that their open source contributions are laudable, but it seems unfair to expect them to bankroll projects that don't contribute to the bottom line, especially if they are bleeding cash. It would be different if they were rolling in cash like the faang companies.

This is an interesting conundrum: Uber needs to splurge to be the kind of company that attracts fang talent but their revenue is still not at Faang level just yet.

I'm sure they benefit a lot from FOSS projects they don't contribute back to. I don't think it's so unreasonable to expect them to contribute back to other projects at least.

They also maintain https://github.com/uber/ios-snapshot-test-case

It’s surreal how they can need 27k employees to run their business. 27,000. It’s a small town worth of people. Seriously...

> and are really good open source citizens

I don't know much of the contributions Uber has made but all I remember is they slammed Postgres as been a bad database because they were trying to open multiple multi hour transactions to do things which is just insane. And then tell us that 'microservices' don't work and they are gonna use this new fandangled 'macroservices' when it sounds like they just didn't make microservices to begin with.

The issue I have with this is people go and read these things and say "oh we shouldn't use postgres cos uber", "we shouldn't do microservices cos uber". There's never any preface to these statements on what they did wrong, they blame the tool or technology instead.

If you don't come up with a NIH project to keep you busy, someone might realize you're superfluous. Time to start another internal tool project! Or maybe a full architecture remaster. I hear Golang is hot right now

This is out of date and not representative of current Uber business. Keep in mind Slack did not exist for several years after Uber was founded. Also, today all of Uber uses Slack, which gave them a nice stock bump. https://markets.businessinsider.com/news/stocks/slack-stock-...

Msttermost was founded after slack as a slack clone so this timeline doesn't make sense.

How are the 3800 engineers divided up at a company like this? I know it's easy to say "why on earth are there 3800 devs, what are they doing all day?" but that does seem like a substantial amount.

Yes I wonder the same thing - I think about Apple and how many engineers they have which also seems crazy for their "output" in terms of product variations. Uber is on a whole nother level, at least from the perspective of the average consumer.

Not everybody works on customer facing products. Apple has a ton of software to manage their supply chain and other logistical things, which requires a lot of engineering effort. That’s what happen when you try to control every part of your product development.

That engineering work is largely contracted out through IS&T. Apple’s product engineering org is famously lean.

Apple builds a lot of pretty complicated desktop software, cloud infrastructure, two popular programming languages and tooling for them, and even their own operating system, and their own hardware.

I don't think it can truly be compared to a company built around a single app. Even if that app is very popular.

Join a large company and inspect the engineering org structure, and you will have the answer. Or ask someone that works at one :)

Not every large company.

> Layoffs of that magnitude, which haven’t been finalized but could be announced in stages in the coming weeks, could result in more than 5,400 of Uber’s 27,000 employees losing their jobs. ...

That figure of 27K total employees is surprisingly high, given that AFAIK, it doesn't include actual drivers. I'd be interested in knowing how these jobs break down by task.

They're a global company that operates in 900 cities. I don't understand why so many people on this site seem to think it should be a few programmers and some suits to sign the checks.

because for the past 11 years, and people tend to forget how long this company has existed, they have been burning through money faster than star athletes after retirement while inventing increasingly convoluted metrics to claim to be actually profitable.

Many people are just tired of seeing glorified sales and taxi companies disguising themselves as tech companies.

The defining feature of a technology firm is reduction of marginal costs at scale. If you're adding human labour with every city you expand into you might have a problem on your hands if your banking on making facebook margins.There is an underlying exhaustion among some people, myself included, who want to see investments into basic research and real technological advances rather than yet another app delivering pizza being valuated at 50 billion dollars.

Uber’s engineering infrastructure is nothing to scoff at.

Yes, and I think that's the problem. The infrastructure is actually a cost for Uber. It's better to have less infrastructure. I have sometimes the feeling the infrastructure team at Uber is trying to build the tower of Babel to touch the heavens or something rather than considering that the end goal is giving people rides and not building more infrastructure.

I think people should recognise that the taxi market has an advantage. It's a distributed system and a market. Taxis organise themselves.

If you're going to replace an entire market with a centrally planned system and a giant electricity and compute eating machine then you better have something to show for it in terms of efficiency.

Exactly. It's like measuring the success of building an airplane by how much it weights.

What's especially interesting to me here is how the landscape has changed since Uber launched 10 years ago. In 2010, you legitimate had to build a lot of your own stuff; at that point Amazon hadn't even launched SNS or Redshift. [1] Docker didn't exist. Etc, etc.

So the question for me isn't, "Can Uber justify their apparently large infrastructure?" It's more, "If somebody started an Uber competitor today, how much of the work could they get from open source, PaaS, and SaaS providers?"

A really interesting question indeed. While Docker containers are a blessing from many perspectives, their orchestration is far from easy (yes k8s I am looking at you). Another consideration of a CTO, when choosing buy vs build, would be the cloud vendor lock-in and pricing consideration. Big cloud vendors may be a good offering for startups, when you need to move fast, growth is more important than margin and vendor lock-in is not an issue. However, as you grow, these things become increasingly important. Just to provoke some constructive thinking, I urge you to consider what businesses would become possible if running cost of IT & online payments equaled zero :)

(Serious questions, seeking clarity in my own mind)

Is Netflix a tech company?

Is a company that sells ebooks a tech company? What about scientific journals? Are they tech companies?

Is Instagram a tech company? What about ad brokers?

I'd suggest the OECD definition:

Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product Classification", OECD Science, Technology and Industry Working Papers, No. 1997/02, OECD Publishing, Paris.

https://read.oecd-ilibrary.org/science-and-technology/revisi...

Page 7 specifically divides manufacturing industries (it doesn't address services) into four technology levels, high, medium-high, medium low, and low:

High technology: Aerospace, computers, office machinery, electronics-communications, pharmaceuticals.

Medium-high technology: Scientific instruments, motor vehicles, electrical machinery, chemicals, other transport equipment, non-electrical machinery.

Medium-low technoogy: Rubber and plastic products, shipbuilding, other manufacturing, non-ferrous metals, non-metallic mineral products, fabricated metal products, petroleum refining, ferrous metals.

Low-technology: Paper printing, textiles and clothing, food, beverages, and tabacco, wood and furniture.

Given J.S. Mill's wonderful definition of technology, 'the study of effects", there's little in human activity which is completely atechnological. There remains, however, much that is quite some remove from the cutting edge.

(http://www.gutenberg.org/files/12004/12004-h/12004-h.htm#FNa...)

In the technology adoption lifecycle, high tech are innovators. An early-adopter firm is itself still not high tech itself.

(Previously: https://news.ycombinator.com/item?id=22884971)

Yes, Netflix is a tech company. Eventually all companies that are enabled by technology and software become tech companies. Even banking is becoming a tech industry.

That's 30 employees per city, for those who didn't do the mental math. Seems way more reasonable considering for each given market, you'll need a number of support staff + supervisors, marketing people, staff to support drivers and their enrollment, and staff to support an office if one exists. Divvy up corporate HQ heads (engineering, exec team, etc.) and I can see that number hitting 30 per city.

Don't forget people that deal with all sorts of compliance issues.

Most programmers are completely oblivious to the world of sales and how large it is.

> I don't understand why so many people on this site seem to think it should be a few programmers and some suits to sign the checks.

I don't, either, but then again I never said that. I'm merely wondering how the jobs break down.

> comes as the 3,800-person Uber engineering group could be slashed by nearly 800 people in the coming weeks

That leaves 23,000 people to account for.

Marketing is probably a lot of it. And I'd bet they have a substantial legal department given their history.

They also have a substantial “public policy and government relations” department on K street and globally.

A bulk of those positions are probably sales and marketing and customer service.

They're not. Most of them are operations.

[deleted]

So many lawyers.

They'll be coming after OP for the staffing disclosure, especially when someone in HR sees the comment

This..

I'd recommend removing the above orgchart comment, especially since it was extremely easy to figure out who you are. (WebDev at Uber)

I don't think I'd get in trouble, but better safe than sorry, I guess </shrug>

But now the context is here - maybe everyone should scrub their comments so it's unclear what was discussed.

So many regional variations. Sounds terrible to have to work with.

well, that company is going into entrenched businesses, so of course the incumbents are going to defend themselves and not just go away..

I did read the following on the internet, not long time ago, I don't know if they are legit numbers, they could be fake :

  Rides: 
  - Operations: 12k (+ 2.4k) 
  - Engineering: 3.8k (+ 700) 
  - Marketing: 1k 
  - Finance: 1.2k (+ 1.7k) 
  - HR: 1k (+ 2.4k) 
  - Legal: 0.9k (+ 1.2k) 
  Eats: 2.2k (+ 1k) 
  Self driving: 1.4k (+ 150) 
  Freight: 1.2k 
  Elevate: 100

Every time there is any discussion about the number of employees at a large company there is some comment like this. Whether it be Uber, Airbnb or twitter.

No large organization is going to be 100% efficient with their workforce, but what's more likely? 1) They (and judging by HN comments, every large company) just massively over hired without realizing it or 2) running a global company is more complicated and involves more moving parts than it appears on the surface.

I guess it is 1. If your competetive edge is running a slick taxi operation, having that many employees seems ... counterinuitive. That is probably why Uber gets a "what are they all doing" alot.

Compliance with local laws, localized marketing, localized support, localized administration, etc. It adds up quick.

In the same way Netflix is just a slick tv station, google is just a slick search engine and amazon is just a slick e-commerce site. Calling Uber’s operation just a “slick taxi operation” doesn’t hold water and purposely ignores all the complexity operating at scale and globally entails.

I mean how many corporate employees would you have if you ran Uber?

Amazon does logistics, Netflix does their own content and Google mainly do advertising and is surely not a slick search engine. Neither are slick.

Uber on the other hand is an app together with some driver administration. The main operation of the taxis are on the drivers.

How many customer support agents do you think it takes to support millions of drivers and almost 100 million monthly riders across the globe in various languages? How many people in operations to onboard the drivers that come in and deal with local regulations? How many internal tools to automate as much of those processes as possible?

Uber operates in: ride sharing, food delivery, bike messenger, corporate travel, freight, helicopter, and gig economy jobs, and more - and these are just the publicly launched products. Each of those lines has its own external _and_ internal products, with their own features, and their own regulatory burden. They each have their own cost structure and incentive models. They're live in over 900 cities across 85 countries, many of which have their own local regulatory burden such as NYC.

Then, on top of that, you've got 91 million monthly active users. Assume each one takes only one ride per month, and only 1% of them have some kind of issue that requires them to reach out to support - that's still 30,000 new issues per day many of which will require coordinating between both parties involved in the transaction.

Do they have more employees than they need? Define need. It's easy to hire above what's necessary to sustain operations when the cost of capital is cheap. More people can develop new products and grow margins for the business overall. But Uber is seriously far from "an app together with some driver administration" any more than Amazon is "a website with some seller administration."

w.r.t "Uber is an app together with some driver administration" : this is true, but taxi drivers (even highly organized ones, such as taxi companies that have employees for drivers) are intrinsically incapable of producing something like the Uber app and operating it at scale. Uber did bring something to the taxi industry that it never had.

If they can lay off 20% of their employees then it appears that 1) is true. Overhiring 5400 employees isn't just about something being "more complicated".

This isn’t really a useful line of reasoning. It’s true that businesses will cut their workforce to remain a functioning business, and just that fact does not imply there was “waste”. Longer term investments are cut, which can affect the competitiveness of the business. Corners are cut where they can be. Is it a productive use of Ubers time trying to hyperoptimize their finances versus focusing on their actual business?

An article that gives some insight into why these tech companies seem to have a bloated workforce is https://danluu.com/sounds-easy/.

Part of it is that the MVP might be easy to create, but scalability and edge cases add a lot of extra complexity. The other part of it is that it's not so much that a company _needs_ every employee it has, but it will keep hiring until the marginal benefit of an employee is no longer positive.

They aren't profitable anyway - is this really in reaction to decreased revenue or is it a culling and reorg, timed and justified opportunistically to avoid bad PR and publicity?

Rides is bordering on profitability as of Nov last year: https://arstechnica.com/cars/2019/11/uber-lost-1-1-billion-l...

Were the virus not to occur, the company was planning to be legitimately profitable by end 2020: https://www.reuters.com/article/us-uber-results/uber-sees-pr...

Something about "planning to be legitimately profitable by end of 2020" makes me chuckle. Like most founders probably plan this for their businesses haha

I mean, the market agreed it was legitimate and Lyft was promising much the same in 2021: https://www.bloomberg.com/news/articles/2019-10-22/lyft-fore...

Market has never been wrong, bandwagoned or knee-jerked before.

Random outsiders with no understanding of the company are never wrong and their criticism is always spot on.

Aren't rando outsiders effectively "The Market"? Appealing to the authority of "The Market", as if it is this great metric of truth, while it currently runs around like a chicken with its head cut off, is not the best argument.

Shares surging by 9% on a vague promise to be profitable in 2 years time sounds like bandwagon behavior. Simple "Good News - Buy, Bad News - Sell" signalling. This is also "Adjusted EBITDA profitability", which is squirrelly, and 2021 means "Q4 of 2021". With recent events, it also seems less likely "The Market" was accurate in its assessment. Honestly that may not be entirely fair given the unprecedented nature, but isn't "The Market" supposed to factor in long-term threats, instead of short-sighted potential profitability proposals? If we were listening to the markets over the last few weeks, the world was either ending or the economy was booming and "nothing was wrong", all depending on what day of the week it was. Lots of sage wisdom being gained there.

Just ask WeWork and Enron and Luckin Coffee investors!

Let's keep citing some famous failures to dismiss anything market might predict because these few examples mean none of it can be useful information. We obviously know better than the market and if we don't it's because markets are full of shit and manipulated by the feds. Furthermore all companies are evil, greedy and nobody wants to build things that develop and grow the world. All decisions made are corrupt and no one cares for our best interests.

It's hard to argue that the market can get, uh, frothy from time to time. This is especially true as low-interest-rate money is chasing such limited yields (or more frequently, negative yields) in low-risk asset classes like bonds.

Large investors and VCs are more interested in growth than they are in fundamentals because they believe the fundamentals will follow the growth. Often they do, but sometimes they don't. The size and employee counts of those organizations don't always mean much. It's worth being skeptical.

I think you'd have made the same reply if I'd cited Luckin before last week, ya know?

Especially for a company like Uber, whose operating economics have been -- let's just call them bleak. They burned $1B/quarter for years. I really like the write-up from Naked Capitalism (a few years old now, but aging well imo) [1]

They have lost more money so far than any startup in recent history. But I'm sure genuine profitability is right around the corner ;)

> Furthermore all companies are evil, greedy and nobody wants to build things that develop and grow the world.

Uh... sir, this is a Wendy's. IRL, just because you really deeply want something doesn't mean you'll get it -- or that it was even a good idea to begin with. And it certainly doesn't mean losing a billion dollars per quarter is going to magically generate a profitable business from thin air.

OR, I'm totally wrong! Either way's fine :)

[1] https://www.nakedcapitalism.com/2016/11/can-uber-ever-delive...

It's worth being skeptical, but it seems to me that people who criticise do so without having any idea how the business internally operates or what its goals and expectations are - and it seems like on falsely based assumptions.

"Burning" cash is already an unfair term which to me implies that analysis is not founded on fair terms.

How can you tell they are "burning" cash and not "investing" it in r&d and expansion which will have effect in the future? If you can differentiate between the two and bring forth a solid reason why it's actually burning, not investing in itself, I might think there's some truth to it.

Certainly there are viable conditions in which it's possible to invest $1B in itself, right? You could certainly prove that with maths, if for example this $1B spent now will mean maybe $1B extra revenue after 5 years?

> They have lost more money so far than any startup in recent history

How can that be an argument? How can you tell it isn't "They have invested more money so far than any startup in recent history"?

For what it's worth I'd really recommend reading the Naked Capitalism write-up I linked to, as I do agree with their assessments broadly, but tldr:

1. There's no economy of scale in moving people from place to place in town. If there was it's likely we'd have national taxi companies by now. In fact, taxi companies recognize better unit economics than an Uber does because they pool their fleet leases and insurance, which not every Uber driver is interested in (or even offered).

2. Starting from a higher cost basis than a taxi means that people would have to pay more than a taxi for a profitable Uber company to exist. There's no evidence people are willing to pay as much as a taxi for their day to day transportation, let alone more than a taxi costs.

3. There's no consumer loyalty so margins are likely to remain razor thin in a race to the bottom commodity product -- only competitive against their incumbents (taxis) when priced at below the cost to deliver.

4. Unlike other startups which sell zero marginal cost products, Uber is selling a negative margin product at scale. There's no clear path toward meaningful margin expansion no matter what scale of ridership Uber achieves.

Or alternatively, if it's not possible to eek out a profit off the back of $65B in rides per year in peak economic conditions as of Q4 2019, how many more rides can you possibly require to turn a profit? Let alone pay back your investors/debt holders $20B of capital.

It's a crap business model, it was crap when they went public with an $85B market cap, and it's crap today with a $50B market cap. They're trading with a market cap of just 2.5X their VC investment -- think about that! You can justify a 5X valuation on your personal savings account when you take out a mortgage.

These are good arguments, so it comes down to the question whether this type of business could be profitable in the first place.

As a frequent user of these services I would be fine with paying a bit more. What I most enjoy is the ability to get a ride within 1 minute timeframe and very comfortably through the app. Ideal to not lose any daily time when going to work and back. Taxis require more organising and waiting time. There is definite value for me. Are there enough other people who find value in this? I am not sure, but we definitely will find out.

Do you think Uber blindly believes they can ask customer's more money or reduce their costs or are they deceitful?

Regarding starting from higher price point. This seems like a solvable issue. I in general don't think we need specialist drivers or so called taxi to exist unless for niche crowds. It seems a lot more optimal if most people can go in and out when they want and do it. This must be cheaper and optimal due to scale and algorithms ability to select fitting driver's from a huge pool.

One thing unnoted is though future potential for self driving transport.

Right now I will be long on Uber though.

My life has gotten so much easier with ride hailing services (I don't have a car and I find it cheaper to ride hail than to maintain a car anyway) so it definitely makes sense for me to invest in them.

> I in general don't think we need specialist drivers or so called taxi to exist unless for niche crowds. It seems a lot more optimal if most people can go in and out when they want and do it. This must be cheaper and optimal due to scale and algorithms ability to select fitting driver's from a huge pool.

Cars are idle 99% of the time because individuals who just wanna jump in and make a few extra bucks are at work during the day. I don't think Uber even pretends to have an ad-hoc fleet of anything other than professional drivers.

> One thing unnoted is though future potential for self driving transport.

That'll be so much worse for Uber. At best, if they deliver it first, they'll see a temporary first-mover advantage. Then every other automaker in the world will jump into the fray, and likely individuals won't own cars at all and it'll be either more commoditized (or less so) depending on what kind of ride people want.

The automakers may even cut Uber out -- why sell to their competition? I don't think it's a margin improvement play but an existential threat.

> This must be cheaper and optimal due to scale and algorithms ability to select fitting driver's from a huge pool.

FWIW I did point out why it wouldn't be optimal: insurance can't be pooled and depreciation of the personal vehicle may far outstrip any benefits gained from Uber. If average drivers ran the numbers I think they'd be really disappointed.

How about listing the 99.99..% of legitimate forecasts and analysis?

Their CEO is not the founder, and was brought in specifically for this purpose.

"planning to be profitable" in this situation means that the financials are losing less money each month and at an identifiable point in time breakeven and beyond will occur.

It doesn't mean "at some point I intend to change some things and hope it makes the business profitable" in the same way "I plan on getting a haircut".

To be fair I was planning on getting a haircut before the world shut down a few months ago. Things aren't looking great up there haha. Now, I plan on getting a haircut in the same way a startup founder plans on achieving profitability: ideally, at some point, before it falls out.

So, they are going to do a haircut after summer or ask their mom to do it now?

A "ramen profitable" haircut if you will.

Why is this misleading claim repeated so often? They are profitable on every. single ride. Even including all the marketing costs, they're profitable on the rideshare.

It's the investment into new ventures like Uber Eats that cuts into the revenue because it' expanding so fast.

Uber is down 27% from its IPO. Not as bad as one may assume, given the hard data coming from its filings and, of course, the news coverage. Lyft is down 58%.

At the troughs, Uber was down 48% and Lyft 72%.

This moment --the layoffs and departure-- feels like a capitulation of the private equity valuations. We shouldn't feel good about people losing. But many have been shouting about how insane the blitzscale model is. Maybe it achieves it purposes for early investors -- that peak moment of IPO liquidation. But it certainly is no good for the employees and their morale for carrying on.

Measuring equity cap with different levels of scale and capital structures across companies is not always insightful

Bunch of random engineers in this thread talking about business when they have no clue how companies are run.

Yes- Uber was making loss before. But their ridership was growing and they were giving incentives on the supply side (drivers) to bring more players in. Thus it made sense to continue investing in headcount to grow. Now, though, everything is disrupted. It doesn't matter that they are losing money slower - if the outlook of the business is weak then they cut costs and reduce headcount.

“Lose money on every sale but make it up on volume” is not a sustainable business model.

Oh please. Once you have very high volume and strong market share you can gradually increase prices to improve profitability.

How much higher can Uber’s volume get? They will probably never exceed the volume they were seeing a few months ago and they still managed to lose $8.5 billion last year. How in the world do you increase prices by that much without losing most of your customers? Unfortunately in the age of coronavirus, the irrational exuberance is gone now.

It's bound to happen when the business is at a complete halt for a few months. :-(

True, but look at all the things Uber has been getting into. While Silicon Valley start ups have been trying to be the “Uber of <whatever>”. Uber doesn’t seem to want to be Uber, at least not the potentially fair/unfair drive share program.

I think it’s been clear they have been looking to change models, maybe this lines up with that.

There's still Uber Eats -- I'd expect that's grown significantly which would help soften the blow.

As I understand it, Uber/Lyft were making a profit on actual rides in the mature markets. Uber was taking a heavy loss on each food delivery. So this crisis has been a double whammy to margins even though I suppose increased volume/adoption is good long term.

Food delivery is a huge premium on top of already inflated restaurant prices. I would expect most people are trying to save money and making a lot of their own food.

Yeah, since the lockdown started we haven't had any takeaways, just cooking everything at home. Feels like ordering food in this situation is too frivolous.

Feels like ordering food in this situation is too frivolous.

Rest assured, your neighborhood restaurants would beg to differ.

Different people have different means and need. The restraints are in a tough place, but so is everyone who can’t wfh in tech. Some people can’t make rent or pay their mortgage, and paying a markup for takeout is frivolous

Food delivery is surging during the pandemic interestingly: https://www.axios.com/food-delivery-coronavirus-a55e0bf2-a75...

Many of us lucky enough to have a reliable well paying job working from home probably realize they have food as almost the only fun we get these days when there are no events, no traveling, no restaurants.

I probably doubled my budget for food, both takeout and groceries, compared to last year. The wine delivery guy knows my name now.

A lot of people are used to eating at a workplace cafeteria or eating out as part of their normal routine. In my case I’ve shifted to ordering delivery or takeout for some meals which I almost never did before. I recognize that I’m privileged to be able to afford to do this, but I think it’s common among a big chunk of the population. People are checking on local restaurants and spreading the word about which are offering takeout to try to keep them going. I feel like it’s the least I can do to help.

Very few people actually work in places like this. Common on HN, but in the grand scheme of things most people are shift workers. 4/10 Americans can't come up with $400 without debt or selling something, and that was before the pandemic and 20% unemployment. I actually read that only 45% of LA county has a job right now. I have been buying takeout myself, but restaurants are failing left and right. A lot of places I try to call have folded already :(

Stats can be misleading. At full employment, and excluding students and retirees, LA County might only have 70% (example number, not researched) of people with jobs.

Uber eats is still a small but growing part of their business. I'm pretty sure Uber is still losing money on Uber Eats and many of their large markets are trying to pass legislation to cap the fees they can charge. If they aren't making money now, they aren't going to make money with fees lowered by 50-60%.

See page 71 of Uber's 2019 annual report [0]. The short of it is that Uber made $1.383 billion in "adjusted net revenue" on Eats (on a total revenue of $12.897 billion) but lost $1.372 billion on an "adjusted EBITDA" basis (on a total adjusted EBITDA value of -$2.725 billion). Every company defines those terms differently, but you should assume that the bias is towards making them look better than reality.

[0]: https://s23.q4cdn.com/407969754/files/doc_financials/2019/ar...

I've stopped using delivery apps, and am calling my local restaurants directly. Some have, um, less formal delivery options, and I fall back to just walking over.

In my estimation, my local restaurants need that 30+% more than public companies.

In this environment, I generally prefer to pick the food up myself because I see it as less risky. There is one less person touching the food (and who knows what else in their car.)

Delivery people also get lost around here pretty often, and I hate having to track them down. Plus I am leaving extra trips for the restaurant instead of the delivery driver.

Agreed, I've had business owners tell me so (the extra 30% is meaningful to them)

Yeah, I've been ordering more directly as well as ordering more food than I usually would specifically to help support any local restaurants that are still alive.

I lost the O and Threadgill's in the same week. :(

Wait do you mean The O in Pittsburgh? I haven't heard about that but I'd hate to see them close.

Yes. The O in Pittsburgh. <cries>

https://goodfoodpittsburgh.com/riptheo-pittsburgh-mourns-the...

This is almost as traumatic as when they closed Chiodo's Tavern in Homestead.

Most businesses aren't charging normal prices via apps. They're marked up due to platform / middleman fees. The notion of giving 30% more likely is not reality. Leave a larger tip, or buy more, to support them in these times.

You're wasting gas, though, and hurting the environment.

This is an incredibly US-biased comment, plus the comment you responded to even spelled out explicitly that they walk to their local restaurants...

> Some have, um, less formal delivery options, and I fall back to just walking over.

He only walks to some, not all. And I don't live in the US, so if it's incredibly US biased, I just got lucky, I guess.

Yes, to those that don't have delivery options. What makes delivery organized by the restaurant more wasteful than the delivery by someone working for a gig-economy app?

Because the restaurant can't combine its orders with those of its competitors in one run. Economies of scale.

I believe they said they walk but even so I cannot imagine much difference.

If you are concerned the logical thing is to cook your own dinner and burn zero gas.

He said he sometimes walks. I'm just saying there is a downside that he didn't mention/consider to what he does.

What I do doesn't really effect that.

I don't own a car, and use one less that once a month on average. Somewhere around half the folks who bring me food don't use cars to deliver, either.

But I'm certain you walk literally everywhere you go, wear only second-hand clothes, avoid buying necessities with packaging or that has to be transported far, don't use disposable paper products, compost everything you can, and so on, right?

Because surely only the environmentally saintly would feel entitled to off-topic carp about trivial energy use when they don't know anything about the lifestyle of the person they're trying to call out.

As an interesting side note it was also in the article's last paragraph about Uber not using Public Clouds such as AWS. Is that becoming more common or less? Is there any other examples of enterprises seeing benefits of running their own services?

Referring to this part: ...they chose to largely manage their own online servers. While that led to some rocky moments early on, people who have worked at the company have said Uber was able to save substantially on costs.

If you can manage the upfront capital costs, physical servers are an order of magnitude cheaper than virtual servers for services that run continuously.

As a sibling mentioned, cheaper long term costs are a huge factor. Dropbox is another public example of a company that has transitioned away from the cloud [0]. Twitter famously still uses a data center for their big data processing. [1]

0: https://builtin.com/hardware/dropbox-magic-pocket-distribute...

1: https://cloud.google.com/twitter

Lyft is about to layoff roughly 30% tomorrow. That's the rumor anyway.

from who?

Oh, it looks like 17%. 1000 employees got laid off +300 furloughed. They are giving severance through mid July and they’re giving Modern Health mental health coverage through end of December.

Plus a 10% pay cut across the board.

So is it full health coverage through end of Decemeber or only mental health coverage through the end of December? Anyway - sounds like decent severance by US standards.

Full health coverage, I believe. It's about as good a severance as you're gonna get in the US.

The amount of corporate debt could be a real problem in the coming months. I'm curious to see how all of these economic recovery programs end up working when we look back in a year.

I'm not well versed in the economics, so could you elaborate how the corporate debt would be a problem in this economy? Wouldn't the lowered rates & other activities by Fed be helpful for the entities with massive debt?

The fed can help with liquidity (i.e. ensuring that whoever needs to fund itself has liquidity by flooding the capital markets with cash). It cannot help with solvency though (if you can't afford your debt because your revenues collapsed, no private lender is going to lend to you, even if they have the capacity to fund the loan). The interest expense is low, but when your debt becomes due, it is the end of the game.

Ignoring (increasingly common) bailouts, basically, yeah.

Even if the Fed nationalized every US company, the interest rate would skyrocket in the corporate debt market. It actually makes things worse. No creditor will want to touch those bonds, hence the interest rate naturally increases to entice would be creditors.

When a downturn like this happens, the Federal Reserve lowers rates to encourage spending. But at the same time, people are less likely to hold corporate debt and instead hold cash. People are less likely to hold corporate debt because the corporation has less revenue to service its debt. In the case of a (highly) public company which doesn't have profits, if Uber were to try to sell bonds, the spread over, say, treasuries, would probably be above 8-10%.

In other words, corporate debt isn't priced according to lowered rates. It's priced according to what bond investors would need to be paid in order to adequately compensate for the risk of Uber going bankrupt.

The only way the Fed would help would be if the Fed bought Uber's bonds, but that would require Uber to be investment grade, which would be laughable, or a "fallen angel", a company which was investment grade before the crisis but has since been downgraded.

The Fed is buying junk bonds right now: https://www.bloomberg.com/news/articles/2020-04-09/fed-unlea...

This underscores the desperate maneuvers the Fed is undertaking to avoid the inevitable. They've killed the free market to save zombies like Uber, which are unprofitable.

From the article (emphasis added)

> The Fed said Thursday it will invest up to $2.3 trillion in loans to aid small and mid-sized businesses and state and local governments as well as fund the purchases of some types of high-yield bonds, collateralized loan obligations and commercial mortgage-backed securities.

The qualifier is the fallen angels clause which I mentioned. The way this works is that the Fed buys investment-grade ETFs. The underlying indices for those funds still have companies which have been downgraded to junk, which are the falled angels. The Fed isn't going out and purchasing bonds directly in the bond market, they're using existing infrastructure to perform market operations.

It's the same difference. It doesn't matter if you buy an ETF or not. You're propping up a broken system and destroying price discovery for the bond market. Price discovery is the pillar of capitalism and efficient markets.

If an ETF is composed of junk-grade bond debt, should the ETF also be considered junk-grade? How can the ETF remain "investment grade"?

last time the Wall St wizards were able to do that with the junk mortgage bonds. Slice and dice. Junk in, triple-A out. And as far as i see the wizards are still there.

I'm beginning to think they're going to let the Fed "explode" but then we're supposed to go on like nothing ever happened. The mechanics of the explosion are what I wouldn't understand, but it could be as simple as debt forgiveness and businesses just suddenly have to pay a lot less money per month or no one comes to collect.

I don't think it's impossible to do financial engineering and hacking to the point where we can ignore an occasional fundamental collapse. Like if I owe money to a mobster, but I somehow kill his entire mob and burn all of his notes, so no one has memory of my obligation. It's just throwing my debt into a black hole and I'm not going to pay a dead guy.

Worked* in the bible, every 50 years no work for a year and all debt goes bye bye.

Time to bring back the Jubilee?

Who owned that debt in the bible? It's not all sheiks and kings these days, but instead pension funds and insurance companies. I'm not sure you can just forget the debt without screwing a lot of people in the process. My guess is the Fed will just print the money as that's a lot more politically feasible than the alternative.

The only question is if we have to print more than other countries.

Yes but printing, too, has tons of risk and could lead to hyperinflation if overdone.

Whoever you borrowed from I guess. But also part of it was that if you sold your land during that time you also got it back when all the debt was forgiven. So if needed you could sell it for another 50 year lease at that time.

*am not a biblical scholar, feel free to correct

The Fed has announced a bunch of facilities but the only one affecting corporates that has made purchases has been the commercial paper facility. The primary and secondary facilities are still weeks off from being active. That's not to say that the announcements haven't had an effect on the market but even the CP facility is barely being used.

Thank you. Your number 8-10% was very useful in getting the idea of why the rate change would not affect those unprofitable companies.

>people are less likely to hold corporate debt and instead hold cash. People are less likely to hold corporate debt because the corporation has less revenue to service its debt.

This omits part of the investing dynamic and is too simplistic of a conclusion for what's going on right now. There has been sky high investment grade issuance over the past two months and there doesn't seem to be a lack of demand for it. What changes is the price the market demands to hold any asset. There is always a price and that's why companies (cruise and airlines) that are in way worse shape than Uber have been able to raise money both in the debt and equity markets.

>if Uber were to try to sell bonds, the spread over, say, treasuries, would probably be above 8-10%.

> In other words, corporate debt isn't priced according to lowered rates.

These two statements are contradictory. Nothing exists in a vacuum but all else equal, if rates are lower, issuers are usually able to issue for lower all-in yields. Additionally, high yield is a much more idiosyncratic market with way less interest rate sensitivity and new issuance is almost always priced on yield; not spread.

> The only way the Fed would help would be if the Fed bought Uber's bonds, but that would require Uber to be investment grade, which would be laughable, or a "fallen angel", a company which was investment grade before the crisis but has since been downgraded.

The Fed has already helped Uber as well as other high yield companies through the various facilities it has announced. They are not directly affected by any of them but as with all central bank policies, it creates a reach for yield that flows all the way down.

fed mostly only helps cover short-term debts, not long-term debts.

As if the job market wasn't difficult enough... now about 5,400 highly qualified and experienced developers are looking for the same positions as I am... What do I even do now...

Where do you get those numbers? I think a lot of companies are keeping engineering talent and laying off other types of employees (like recruiting, marketing, sales, etc.)

https://layoffs.fyi

That's very interesting web! I wonder where they are taking the data from?

Crowdsourcing news links and tips from the public.

For what it's worth, it's unlikely that all 5,400 employees would be engineers. Your odds might be better than you think!

From what I'm seeing on Linkedin, it's the sales, support and marketing that are being laid off,

From the start of the article before the paywall:

"the 3,800-person Uber engineering group could be slashed by nearly 800 people in the coming weeks under the proposed job cuts."

That's certainly not most of the cuts, but it's not negligible either.

Last sentence before paywall reads: "Pham has notified managers who report to him of his plan to leave, which comes as the 3,800-person Uber engineering group could be slashed by nearly 800 people in the coming weeks under the proposed job cuts."

For ages, I have argued that Google and Amazon owe much of their fortune to the Dot Com Bubble.

In a nutshell, the bubble put a TON of great engineers out of work. Those two companies were able to acquire talent that would have been impossible to find otherwise.

Same thing happened in 2008. This is also the reason shares of Microsoft, Google, Amazon, Facebook, Apple have steadily gone up the last couple of months. When things are tough, smaller companies (i.e. their competition) won't be able to survive, and they'll snap up their talent for pennies.

The ability to hire is a minuscule part of why these stocks do well in a downturn. The cash flow to weather the storm, entrenched positions, monopoly or near monopoly positions in their markets are all much higher on the list than picking up engineers who were applying to them for the high salary anyway.

Move literally anywhere other than Silicon Valley and there's still plenty of jobs

Most of the laid-off positions, assuming these layoffs do take place, probably won't be developers. During temporary crises, companies prefer to lay off the workers whose positions will be easiest to hire back after the crisis has ended. Engineering positions tend to be hard to hire for, so engineers are usually hit less hard by these types of layoffs than other roles.

But your mileage may vary: companies also understand that one big cut is better for morale than lots of small ones. The current crisis is temporary but might last a long time, so a company that thinks they might have to fire engineers eventually, could plausibly pull forward that decision in an attempt to save the business.

Times are hard all around.

Historically Uber was using "death by thousand cuts" strategy - layoff a little below 500 employees at a time, probably because of WARN act.

Per a comment above, looks like 800 of their 3800 developers may get laid off. Do you feel that number is on the higher end?

Uber doesn't even have 5400 engineers overall. You'll be fine.

The monthly "Who Is Hiring" and "Who Wants to Be Hired" threads will be coming out on Friday, so at least don't miss those.

https://news.ycombinator.com/submitted?id=whoishiring

YC also has a "Work at a Startup" offering, if that's the kind of job you'd like.

https://www.workatastartup.com/

Good luck!

The unblocked version says 800 out of 3800 engineers will be slashed. That is pretty uniform and brutal TBH.

Genuine questions here - Why does Uber have 27000 employees? What do they with that many people?

hoarding top-notch engineers in their pocket while they have enough capital?

Only 3800 are core engineers (people reporting to Thuan) https://techcrunch.com/2020/04/28/thuan-pham-who-fled-vietna...

People on HN tend to vastly underestimate the number of bodies that can be used in sales and marketing at a global scale. Typically you have local teams in both silos running on the ground.

Most of it it'd be local operations, support. Lots of compliance and local marketing. They operate "in more than 900 cities"[0]. For example many cities would require drivers to be licensed to drive - that would require local support.

The company is very far from dev. centric in that regard, just because they have headquarters in San Francisco. Likely they overhired development, HR and the like, of course.

[0]: https://www.uber.com/global/en/cities/

Uber's S-1 (quoted below) claims 5,400 direct employees in platform support alone. Interestingly, I've seen an Uber floor while touring a third-party call center in Manila, so they probably outsource even more these days.

Platform User Support

We have invested in a network of global support centers to support our worldwide operations. We have ten primary support centers in Chicago (U.S.), Phoenix (U.S.), Limerick (Ireland), Krakow (Poland), San Jose (Costa Rica), Hyderabad (India), São Paulo (Brazil), Manila (the Philippines), Lisbon (Portugal), and Cairo (Egypt) with approximately 5,400 employees and 400 independent contractors who provide 24/7 support for platform users in the United States and in certain other countries. In addition to in-app, web, and phone support, Drivers can visit Uber Greenlight Hub locations for in-person support.

https://www.sec.gov/Archives/edgar/data/1543151/000119312519...

More layoffs are coming. I know PayPal is going to shift a bunch of jobs from San Jose to Austin when this is all up. There will be way more layoffs or relocations.

Do you have a source, or just rumors?

I’m being let go and it’s super obvious. They hired our replacements in Austin in March and they started in April. But now management is playing games hiding them under other org trees, etc. They did the same thing last year. There was obviously going to be a lay-off at the end of March like last year, but they delayed it to not look bad PR-wise. My manager has even casually started making strange comments like “all the jobs will eventually be in Austin” and “sometimes you just have to get laid off” so it’s like they’re telegraphing it at this point.

That's rough, I'm sorry to hear that. All the best in your search for a new opportunity. Tough times all around.

Probably a good thing in the long run, this industry needs to come back down to earth it's ruining a lot of peoples lives

And pretty much a waste of american talent

If you think your team is going to get laid off you could maybe try to volunteer for it and negotiate for a more generous severance package. Big cos like that typically set aside money for those things and how it gets distributed is discretionary.

I may actually do this tomorrow. Thanks for the idea. Didn’t realize it was an option. The worst part is just waiting for it to happen.

That's what I would do in that situation. I worked for a bank back in 2008. Just sat around waiting for the inevitable. Your boss could be a dick and lay you off on the spot and it may blow up in your face. But you might also be able to get more than what might have been coming your way. I'd give it a shot. It sounds like you have already caught wind, so jockeying for position is probably a safe bet.

This is devastating. 20% unemployment rate as of last week, only getting worse as earnings come up. I don't know what the economy will look like when we emerge from this.

March 19th: "Uber shares soar after CEO says enough cash to ride out coronavirus crisis"

https://www.reuters.com/article/us-health-coronavirus-uber/u...

April 21: "Uber Bookings Now Down 80%"

https://news.ycombinator.com/item?id=22938687

April 28: Uber lays off 5400, CTO resigns

[edit] - Fixed the dates. I've lost all track of time.

Nit - I think you mean April 28.

Also April 21 (checked the HN link and it says 7 days ago).

those last two happened in April not March. I still think it's pretty stark to go from 'we are flush with cash' to '5400 laid off' in one month, but let's not push the idea that they fell off in one week.

all that can still be true, statement 1 is relative tho. ride out the virus for how long? 1 month? 3 months? 3 years? By laying off 5400, they are now even more flush with cash. it's business.

We are not an industry that is particularly strong on the capacity planning front.

I don't know where that stems from, but we are constantly surprised when we have too much or not nearly enough of whatever we need, and we don't know what the right amount is until after it has already happened.

Margins drive efficiencies. A grocery store is amazing at holiday planning but a tech company will make guesstimates.

Amusing. But, are we in March right now?

Maybe. Every day feels the same as the last.

Incorrect dates! Please update.

I wouldn't be surprised if they laid off 90%. They have the app and infra probably finished and stable, established brand, they tried all the markets they could, lawsuits should be over by now. They should just lay off, reduce fees and use the brand for market share

Would you be surprised if AirBnb laid off 90%? Or Google? Or Amazon? It's already built, right, so why do they need so many people just to keep the lights on?

Probably just keeping the lights on won't cut it when a competitor arises, and by then they would have run a opportunity loss.

On one hand, I don't understand why they need so many employees for a ride-sharing platform. On the other hand, I can understand that people are just so eager to find another growth point so anything looking like a growth point could get almost unlimited capitals then hire a lot.

That's the case for many tech companies, why does Twitter need thousands of employees?

Turns out there's lots of employees to do all kinds of things, the app side is only the tip of the iceberg. There needs to be people collecting metrics and analyzing them, people building the platform that employees use to deploy code and run batch jobs, maintaining infrastructure (IIRC Uber did onprem -> cloud -> onprem), people interacting with customers and drivers, local expansion teams, and so on.

Does twitter really need those metrics? Just because people want metrics doesn’t mean they need to or should be collected. I have seen over the years posted here and again that highly targeted advertising and the ensuing surveillance infrastructure that that entails hasn’t really resulted in a significant improvement over non-targeted generic advertising like keywords and brand based advertising. So they could probably be as effective from revenue perspective without all the infra to spy on people and the manpower that requires.

Huge revenue slumps like these tend to facilitate come to Jesus moments with regards to staffing and mission priorities. I suspect if twitter had or was going to losE confidence of the stock market and needed to show improvement a lot of the so called mission critical metrics would probably go.

Any change deployed by large software firms are checked to make sure that no team wide and company wide metrics are adversely affected. How do you do that if you don't have the metics in the first place?

Most metrics aren't really related to advertising or personal data collection, though. Things like monthly active users (part of the quarterly shareholder report), conversion rates, cart abandonment rates, feature usage, active minutes, and so on are all part of the usual development process.

These are used pretty heavily when launching new features or changes to existing features, in order to make sure that no key metrics are adversely impacted. For example, if one launches a new feature but users are confused by it, they might be less likely to succeed at completing a transaction, thus negatively impacting revenue. The change will then be re-evaluated or even rolled back.

This is a common trope on HN that's strange to me.

I feel like people are unable to see the complexity of an organization from the outside, but normally accept the complexity and need for employees while on the inside.

Might have something to do with the paycheck you're receiving regularly while on the inside...

Or just a better understanding of the organization and the problems they face. The inability to use that understanding and apply it elsewhere is what's strange to me.

"It is difficult to get a man to understand something, when his salary depends on his not understanding it."

Uhh that doesn't really apply here.

I'm sure executives could make a lot of money if they could get the same output with 20% of the workforce.

I'm not the one convincing people my services are needed. I'm the one being poached because they are.

This is needlessly personal, bordering on ad hominem. I've never received a paycheck from Uber but I have worked for large organisations. 3800 people on engineering doesn't seem unusual to me. I can't justify the employment of each of those 3800 but I know for sure that this product could not have been built by 100 engineers.

Sometimes an organization is complex because it has a lot of employees, rather than needing a lot of employees because it's inherently complex. You see the same thing with large software projects.

Sure, there's always going to be bloat, but complexity at scale isn't just because there are a lot of employees.

Twitter is a great example. I bet they have 20+ people working on a specific anti-abuse system. Another 20+ working on a specific ad type that makes the company money. Another team that just works on account security. Another team that works on internal tooling. Or the shared UI components team. Etc until you get the current state of Twitter.

All of those teams don't need to exist when Twitter is small, but do when they scale.

We can definitely agree that as a company grows, it needs more employees. I think the point at issue is that there is such thing as having too many employees. There are multiple opposing forces in tension here, and the tricky part is striking the right balance. I think that GP was trying to say that they hired too many people, and introduced complexity.

A layoff is certainly a sign that they hired too much, I agree.

I was going off what I figured the poster was getting at: they don't understand how Uber has even 80% of their employees.

Is that what they were getting at? It seems to me like you made up that 80% number just now, to prove your point.

I think you forgot what thread you're in.

Uber is discussing laying off 20% of employees. 100 - 20 = 80.

It's completely reasonable to assume the OP was trying to figure out how they have so many employees, even after the layoffs.

But it's not about employees. It's about capabilities, and working backwards.

eg look at datastores. If you can fit your data in postgres on a single (potentially really expensive!) computer, you probably need two or three of those computers for a primary plus a couple replicas and a DBA.

Once you outgrow that, going distributed costs a team. There is a big elbow in the cost and headcount curve.

Once you want a different specific capability beyond the standard distributed datastores, that costs multiple teams. Yet another big elbow in the cost and headcount curve.

This happens on data stores, applications, translations, currency, etc etc etc. Imagine a Greek person with a Greek bank account driving Uber in France being paid with an American amex card.

I talked to a friend of a friend working there. It sounds like they previously hired engineers before having projects they needed them for. It's fairly clear some of these companies just set targets for growth and hire people to match, rather than to meet some fundamental business demand.

Or people just see Uber the app and think to themselves why is that so hard. All the while ignoring / not seeing all the other pieces that are needed to support that app. And this is just from the technology perspective.

I don't have any insider knowledge, but I imagine just the support and operations org to manage and respond to all those riders and drivers can't be small.

>This is a common trope on HN that's strange to me.

It's because HN is not filled with people with knowledge of the industry anymore. People in tech are now the minority.

You must be joking.

Given the quality of discussion on this website, no im not.

It's the classic line: "That's so simple, I could have built that" which warrants the classic response: "fuck you, you didn't".

Why the hostility?

Sure we have the benefit of hindsight to solutions that fit within the product demand fitness landscape. But by identifying areas we could have attacked, we shape our intuition and gain the confidence to exploit other areas of opportunity. That's valuable.

I think this warrants a reframing - instead of focusing on missed opportunities, look ahead for new ones. There will be gradients for the foreseeable future. Learn to spot them, learn the skills you need, and then position yourself to solve the problems.

With the knowledge I have now, I could have built Facebook, Twitter, Uber. But I didn't know to do it then. I'm trying to put myself in the right place to solve problems that matter to me that I also think could move the needle.

It’s faux/facetious hostility. And it’s I response to a naive/offensive/belittling comment.

I’ve not worked in a company as big as Uber, but just in mid sized companies with also midsized markets and there is never an end to the work that needs done. I don’t see why it’s hard to believe it takes a lot of hands to build something like Uber.

And I think you’re wrong that you could have built Uber/Twitter/facebook even with what you k ow after the fact. You could have built a toy simulacrum, but put it before millions of users and it’d fall apart, and not just from scale, but missing features; all the different OSs, regional controls, payment controls, mapping, pricing models, etc.

If there was a spec for one of these companies it’d be thousands of thousands of pages long and most of it you don’t know about; no single person could.

So a little faux hostility seems warranted.

People tend to subconsciously assume the operations of an organization are linearly associated with the public-facing products and services they provide. People quantify based off of what they know and understand. Nobody can quantify the effort associated with an effort they didn't know existed.

I seen plenty of people who think their orgs are bloated. I know I've felt some teams could lose half the workforce at no real cost.

According to Price's Law 50% of the work is done by the square root of the number of people. As the amount of stuff you need to do grows linearly, the amount of people you need to do that stuff grows exponentially.

I think you mean quadratically.

In popular usage of the term, anything above linear is “exponential” unfortunately.

Price's Law is great. I think it provides insight into so much of how the world works.

I am curious to see how Red Hat performs now that it's been swallowed up by IBM.

Is there any empirical evidence of Price’s law? Would love to see it.

I could only find this study (admittedly from 1986) that disproved the original hypothesis - https://www.sciencedirect.com/science/article/abs/pii/030645...

Uber has tons of regional offices for local expansion, lobbying, marketing, loans, etc. Not sure what % that adds up to but I can imagine they have many many employees in that category internationally.

Read up on Uber's infrastructure, and you will be quick to reconsider.

How else would they re-write all their "data science" code from python to go?

Their ride sharing platform is very sophisticated, though. Pathfinding based on gps locations, maps, traffic, and other obstacles, and solving traveling salesman problems with constantly changing variables are generally not simple problems (every ride sharing platform does it, sure, but that doesn't mean it's easy, or that they all do it well). Plus they are at a very high scale and high reliability, both of which require large amounts of employees (things don't just scale themselves). On top of that they have a lot of vertical / horizontal integrations.

They are powered by Google,so travel routes, traffic info and all other difficult things come from them.Not saying it's easy, but main challenges are definitely somewhere else.

None of the above are powered by Google. And marketplace difficulty comes from regional constraints, product differentiation, and incentives to try and achieve equilibrium (e.g. demand forecasting). The resources required for these are massive.

From people I’ve spoken with, the only mapping thing google provides that they use is the base map and road segments. In some markets they use Open Street Maps or TomTom when the data is better than Google. All the routing tech is their own and works atop these three data sources.

https://www.google.com/amp/s/techcrunch.com/2015/11/12/uber-...

TL;DR, every marginal employee generates enough marginal revenue at scale that they more than pay for themselves, and so it's worth it for the company to keep adding people (at least while the business is doing well)

Think about landing at an airport in the before times and getting an Uber. You don't just put a marker on a map view, you have to be directed to where the airport set up ride share pickups. The drivers who want to wait in a queue to pickup airport riders need to be told where they're allowed to wait. There are millions of little edge cases like this, all with different, non-standard laws in every city they operate in. It's not just running a big server that keeps a table of pickup coordinates.

If layoffs are the only downside we have to massive unemployment, then I will consider us very lucky.

Another scenario that commonly follows periods of high unemployment is severe political unrest. That’s the kind of fertile environment that has historically preceded some very bad things. I hope the shutdown is worth it.

The president just suggested that people inject disinfectants and then lied about it being sarcasm the very next day. Even if that were true, what kind of world leader thinks it’s a good idea to be sarcastic during a global pandemic to troll the media?

Maybe it’s time for severe political unrest.

>Maybe it’s time for severe political unrest.

Yikes, you might not like Trump, but can you not call for "severe political unrest."

Our political system is full of perverse incentives that leads to a false sense of democracy. The electoral college and first past the post voting leads to a constant two party system, where people in most states don’t get a real vote since their state is safe for one party and winner takes all.

Neither party has any incentive to address it tho, since it benefits them both both equally. They hate each other and are as separate politically as they can be (often times taking a position just to spite the other party). But with only two parties with any real chance of winning, they’re chances are better and arguments easier to make than when facing a half dozen parties spanning the whole political spectrum.

So we go from more extreme liberal to more extreme conservatism leader, like America as a whole is manic depressive. We’re more polarized as a nation than we’ve ever been before, including the lead up to the civil war.

But now politician is a career, not a duty. And people make decisions that protect their careers. So in the current world we’ll never see an alternative vote introduced giving moderate candidates a shot. We’ll never see a change to the electoral college to make it so that votes against a “safe state”’s party matters at all.

I’m not calling for unrest. Lord no, that’s against the law. All I’m saying is that there is a real risk of it happening due to the current climate, but maybe that’s not entirely a bad thing.

>I’m not calling for unrest. Lord no, that’s against the law. All I’m saying is that there is a real risk of it happening due to the current climate, but maybe that’s not entirely a bad thing.

I don't know. Every president since GWB has been considered illegitimate by a significant fraction of the opposing party, some mix of Hitler (for the red team) or Stalin (for the blue team.) People believed Obama was a Kenyan born Al-Qaeda double agent, and the person most responsible for spreading that conspiracy theory is currently running the country (with, as expected, everyone on the other side certain he stole the election and is going to put everyone into the gas chambers.)

I've been hearing about the "cold civil war" ready to boil over into violence for years now, but it hasn't happened. Trump's election is the biggest response to that "unrest" that I'm aware of, and it seems to have been a net negative for American society and political discourse.

I agree that the electoral college and FPTP voting are problems that need to be addressed - but the parties themselves should stop fielding one and only one candidate per election. I feel like the primary phase should be done away with entirely.

> but the parties themselves should stop fielding one and only one candidate per election

Putting up two candidates in the election is a guaranteed way to never win again with our current system. All you’ll do is split the vote for your party, handing the win to the opposition wrapped up with a bow.

We could stand to do away with a lot of our current system, I'm just saying the game theory that leads to two candidates per presidental election is a big part of the problem, and one that at least doesn't require a constitutional convention to solve.

He didn’t actually suggest that. Why are you being dishonest?

Here’s the full, direct quote. Please let me know where the dishonesty is:

"And then I see the disinfectant where it knocks it out in a minute. One minute. And is there a way we can do something like that by injection inside or, or almost a cleaning? Because you see it gets on the lungs and it does a tremendous number, so it will be interesting to check that. So that you're going to have to use medical doctors.”

Your only possible argument for him not suggesting the injection of disinfectants is that it’s barely a coherent thought, like most of his brainless dribble.

But if your defense for stupid statements is that the president of the United States is illiterate, you need to take a hard look in the mirror.

I am not sure we need "unrest". We have democratic elections in November. Make sure you're registered to vote, then go vote!

Haha yes we have exactly 2 choices. "Democratic" elections.

The system is certainly biased towards having only two presidential candidates. (If one candidate is too similar to another candidate, they split the vote, and the most dissimilar one wins. That is the intrinsic design of first-past-the-post voting, and is a reason why we should get rid of it.)

My advice is to turn the focus local, where you can have more of an impact. The President of the United States is accountable for 330 million people, so your individual views matter very little. In your own congressional district, or city, or state, though, representatives are more accessible. You just have to decide what problems you want to solve and who can do it for you. Very often, the President doesn't have that power, so you probably don't have to feel too sad about not liking the choices.

Or simply voting in November. Seems easier.

Having 10 times the amount of people show up at hospitals and having to turn away 80% of them and leave them to die would have been a pretty gruesome sight.

I’m not suggesting the shutdown wasn’t the right choice. I’m only reminding people that there’s potentially a lot of things that can go wrong now. Unemployment is not the worst of them.

Since when is this news? Has their ever been a time when Uber hasn't wanted to lay off a large proportion of their 'staff'?

Didn't they just do a 20% layoff last September?

The article says 435 in Sept which was 8%.

Ah ok. Article is paywalled for me so I couldn't see that.

8% of what? All employees, or engineering? (435/0.08) ~= 5400, and Uber's S-1 filing says they had 22,263 employees as of 31-12-2018.

https://www.sec.gov/Archives/edgar/data/1543151/000119312519...

(ed. - article says 27,000... but Uber's had three low-hundreds firings chunks tallying ~1260 total over last summer, and said they were freezing engineering hires. Were the extra 8k hired in the first half of 2019?)

22,000 employees not counting drivers? Holy crap.

There were a few rounds, totaling at least 1000

https://www.nytimes.com/2019/10/14/technology/uber-layoffs.h...

Companies that are not profitable and have existed largely on hype/VC hype will continue to get crushed by their previous-years' bloat.

Companies that depend on people being out and about will get crushed by the coronavirus.

Uber is both.

I think Uber had a pretty clear path to profitability prior to this. The only open question was could they raise prices enough to not drive customers away and not be undercut by Lyft. Lyft is in the same boat, so it would probably be like when airlines started charging for checked bags--once one does it, they all do. As for the demand curve? I think they could make it work. Like Wework, what Uber does is a real business. It just got over-hyped.

Lyft isn't their only competition. If they (Uber or Lyft) raise prices they will lose out on a lot of their appeal over traditional taxis. Cost relative to taxis is the main reason Uber and Lyft were successful in the first place.

Many taxi dispatches have already adapted to app based ordering, tracking and payments as well.

Yeah, both companies existed to "disrupt" the traditional taxi industry and I think they succeeded. Traditional cabs have changed a lot (while continuing to charge what rides actually cost).

Well, they exist(ed?) to make money. They did so by innovating in the taxi industry. One of them did this by breaking the law in every jurisdiction they operated in then lobbying to make their conduct legal after the fact.

But yes, they did disrupt the industry and there are now COTS solutions for taxi brokerages to accept rides in similar ways such as iCabbi.

That seems like a waste to point out. All companies exist to make money. That's kind of inherent in being a company. You wouldn't write "To make money" as your mission statement when opening a business.

>You wouldn't write "To make money" as your mission statement when opening a business.

I've made a huge mistake...

As c-suite exec, better to be incompetent during the good times than to be competent during the bad times. makes sense that he’s leaving.

Personal attacks are not ok on HN, so please don't post like this. Maybe you don't owe a c-suite exec better, but you owe this community better if you're posting here. We're trying to stave off the default internet degeneration, to the extent possible.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

https://news.ycombinator.com/newsguidelines.html

Microworkforces are the new hot thing in SV.

Outline link for non paywall - https://outline.com/Yf3CLV

This includes the same snippet of the article listed on the website, and doesn't bypass the paywall, FYI.

> revenue to nosedive by $17 million to $22 million in the quarter.

It's interesting how often news articles get millions and billions mixed up. I feel like I see it all of the time. Apologies for the digression.

There's no billion/million mixup here.

Quarterly revenue will be down by 17-22 million.

Oh, indeed. Well, the phrasing still easily leads to confusion as it could be interpreted as falling to $22 million (which is way too little), rather than falling by a range of $17-22 million.

Would've been better as "revenue to nosedive by between $17 million and $22 million in the quarter"

That number can't be right, though. They have a billion in revenue per month. You wouldn't describe a 1% decline as plummeting.

> Uber said it expects an impairment charge of up to $2.2 billion in the first quarter due to the outbreak and for revenue to nosedive by $17 million to $22 million in the quarter.

The impairment charge is on the “reduced value of equity investments”. Not sure what that’s about.

But “revenue to nosedive $22 million...” this makes no sense. Last year Uber reported a net loss of $8.51 billion.

I think $22 million is the cost of programs it has put in place to help drivers during the pandemic. In other words, a pittance.

Last report was that Uber traffic had cratered 60-70% in Seattle as of March 19th. I can only imagine the world of hurt Uber is in for based on a global 60-70% revenue drop in the face of their fixed costs. $22 million ain’t it.

Indeed. In 2019 they had GAAP revenue of $14 billion (and GAAP net loss of $8.5 billion). The article is clearly wrong, their quarterly revenue is way above $39 million - they haven’t reported Q1 2020 earnings yet, but revenue will be in the billions.

Regardless, layoffs are necessary. Even before COVID, Uber was burning money at an absolutely insane rate, and really don’t have much runway for a public company. Obviously COVID makes the situation much worse. Heavy layoffs suck for everyone who loses their job, but they are necessary here.

Uber's q4 2019 revenue was 4B $.

A drop of 20 million (ignoring the fact that quarterly results look at YoY, as opposed to quarter to quarter) from expectations would be... quite impressive? ( quite in contrast to other reports of a 80% drop in volume of rides.)

I think what might be interesting to watch is their forecasts for next quarter, as well as for the year.

This was sloppy reporting/writing. The "revenue to nosedive by $17 million to $22 million" was the specific effect only attributable to their Covid-19 financial assistance program. Here's the quote directly from Uber's release:

"To support those whose earning opportunities have been depressed as a result of COVID-19, as well as communities hit hard by the virus, we announced and implemented several initiatives during the first quarter of 2020, including a financial assistance program for drivers and delivery people. We intend to account for this program as Contra Revenue, which we expect will reduce GAAP Revenue by an estimated $17 to $22 million in Q1 and an estimated $60 to $80 million in Q2."

https://investor.uber.com/news-events/news/press-release-det...

I wonder if the CTO really "resigned" or was kicked out. Uber's engineering culture is well known for not thinking about costs early in development. Moreover, ignoring infra costs, the revenue per engineer is really low, it is at around 1 million dollars per engineer; 11BN revenue / 10k engineers.

I work for a team in which the revenue per engineers is 2 times higher than that and we aren't any sort of unicorn.

Do you have a source for them having 10k engineers? That seems extremely high. I'm going to guess that you are wrong, and grossly exaggerating numbers to stroke your ego or because of bias.

Also I'm sure you understand that things change with scale. Comparing a tiny irrelevant company to a global one may not be as straightforward as you think.

Edit

From the article:

> which comes as the 3,800-person Uber engineering group

I was right, your numbers are way off.

I got my numbers from a projection that also had them at 11BN revenue by now. The actual number for 2019 is 4.1BN. So yeah, Uber makes earns very little per engineer/product member compared to healthy companies.

https://investor.uber.com/news-events/news/press-release-det...

Btw, no bias, but interesting that you took it there. What motivated the comment? Can't someone be critical of the performance of an executive? It seems that a lot of people believe that running things at scale somehow requires defying basic business principles, when in reality is quite the contrary. You need to be even more vigilant of those metrics.

> The actual number for 2019 is 4.1BN

You are wrong, again. 4.1BN is the revenue for Q4. From your very own link:

> GAAP Revenue 2019: $14BN

So yeah, I guess it's much healthier than your company isn't it?

It's fine to be critical, but let's not make up fake numbers and then draw conclusions from that. There also seem to be many people here who are overly critical of Uber specifically because of it's image.

I see I was wrong. I am not making up fake data, I read the data wrong.

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