Uber loses $2.9B, offloads bike and scooter business | Hacker News Reader

Uber loses $2.9B, offloads bike and scooter business

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165 pointsfinphil132 comments

"Net loss attributable to Uber Technologies, Inc. of $2.9 billion, which includes $277 million in stock-based compensation expense and pre-tax impairment write-downs of $2.1 billion. Net loss attributable to Uber Technologies, Inc. excluding the impairment write-downs, net of the tax benefit would have been $1.1 billion."

So a loss of $1.1bn is an improvement on $1.4 last quarter, not including write-downs associated with investments in Didi and Grab. This explains why the stock went up not down after earnings.

>https://www.marketwatch.com/press-release/uber-plows-forward...

you shouldn't ignore impairment. it's a place to stuff a bunch of bad decisions, and an amorphous bucket where value can be plausibly inflated and deflated to control the performance story of a company (i.e., where fraud can happen).

This is all true, but it can also be a place to acknowledge the bad decisions Kalinack made.

When you have a grab bag collection of growth businesses like Uber, the important question is whether the core business can be profitable, and to that end you need to exclude the failures of the non core businesses.

isn't uber still priced as if they had grown to be a profitable business across all of their growth businesses? I have a hard time understanding the valuation of Uber given any negative indications on any of their businesses.

In this particular case it is mainly the value of the investments in DiDi, Yandex.Taxi and Grab. Once those will bounce back, Uber will have a very profitable quarter. Of course then it will be ignored as just increased value of investments.

It’s very hard to “explain” why a stock goes up or down after earnings using only a handful of the reported KPIs.

Lots of factors, company specific and macro, factor in.

First, they were gonna make the jump to be an autonomous robotaxi service, but that's going nowhere fast.

Then they were going to be mobility service - cars, bikes, scooters, everything would go through them. But no more.

So what are they going to be now? Just milk their taxi service until Waymo, Tesla or whoever comes and wipes them off the market? Honestly, what are their long-term prospects? I've been staying away from Uber stock because they have a market cap of 50B. They're not going to be paying dividends, so what's going to make them be a 100-200B company?

This is what I want to know.

Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc.

I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices? It's just that you have to clear that point first, otherwise :pile of burning cash emoji:

I think Uber is a lost cause, sorry to say but the food delivery business cannot be profitable for a majority of customers to where they will still pay for takeout. Their ATS service(self driving cars etc) was using stolen technology from waymo, now they are forced to using their own technologies they are way behind waymo, aurora, nuro, etc. Even ride hailing which is supposed to be their bread and butter is losing money, trying to up the ride costs and expect a huge drop in riders. Lastly Covid-19 joined the party, nobody wants to ride in a strangers car who could be infected (or visa-versa). This mindset of fear of the virus could take a year or so to subside, by then how much money will they have burnt?

The worst part is consumers have also lost because of uber. The promise of convenient, affordable transportation will not be delivered. Uber/Lyft rides will be more expensive than cab rides were because users have to support Uber's overhead.

self driving cars are the answer, which are impervious to pandemics like coronavirus as an added bonus and will reduce the human death toll inflicted from motor-vehicle casualties at the hands of human drivers.

I'm not convinced that self driving cars are pandemic proof, on the contrary. Who's gonna desinfect the car seates and handles of an autonomous self driving car during a deadly pandemic? It's a lot safer to use your own car than a virus and bacteria ridden shared car used by God knows how many infected people. The customer isn't gonna clean it. So you need workers to clean and desinfect the car after every single ride. Even if you use robots, the cars must drive to the cleaning facility first, dramatically reducing their availability on the streets and profitability.

Yes, I can't wait to buy a self driving car :)

Ride hailing wasn’t losing money.

Not only was it not losing money. It was actually quite profitable pre-covid.

Even that monopoly-style strategy never made sense to me since the barrier to entry for a competitor to create a ride-coordination app is low (Lyft has made one, Google, certainly could) and the switching-cost to the end user is low (I have zero loyalty to Uber or Lyft).

>Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc.

Though right now seems like a pretty good time to raise prices to the degree that they haven't already. I suspect that for some time to come those who can afford to do so will pay a significant premium to avoid public transit.

Why would you say they are underpriced?

For a long time ubers have been more expensive in sydney (which is known to be one of their most profitable markets) for many rides than taxis - there is an added convenience of Uber that taxis are only just catching up to (in terms of seeing where your ride is/wait time) but a fair percentage of the time I prefer taxis these days now - fixed price and the driver generally knows where he’s going instead of following a map and driving like a person who only got behind the wheel last week

> I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices?

You forgot: drive sustainable incumbents out of business by undercutting them, even though you have higher actual cost, with VC subsidies.

They were also going to be a global logistics/courier business.

The truth is now settling in that Uber was a dot bomb?

> First, they were gonna make the jump to be an autonomous robotaxi service

Anyone who fell for this is a fool. Nobody could answer the question, “How is self-driving cheaper than exploiting human drivers like they are now?”

And, furthermore, assuming the availability of self-driving at the highest degree of difficulty--namely relatively dense cities.

The financial benefit seems pretty clear, conditional on self-driving tech working. The capital cost of the hardware would be amortized. Let’s say a driver costs $10/hour. If the self-driving car is active for 16 hours a day it saves you $58k a year in driver wages. Then over more years that number multiplies. It seems totally realistic for self driving tech to cost five figures per vehicle. With mass production the cost of hardware would go down like it always does. I also think it makes a lot of less driver-time-inefficient routes more viable, like driving someone from the city deep into the suburbs with little chance of a return fare. This grows the addressable market.

There are also ethical, legal, and P.R. disadvantages to exploiting human drivers that seem to be getting more significant over time. Personally I’m not super optimistic about the near-term technical viability of self driving cars but it does seem to make Uber’s prospects look better to investors given some possible paths the future might take.

So instead of paying a bunch of people $10/hour, Uber is going to pony up front for a huge number of vehicles and the staff it takes to maintain them? Or are scads of private owners going to hand over their car to Uber to run as AI-taxis for $10/hr?

$10/hour is a rough estimate for the after expenses earnings for Uber drivers. The gross Uber pays is more like $16/hour so that’s the number to compare if you are going to look at Uber’s all-in cost to run a fleet. Using the 16 hours/day estimate it comes out to $93k a year of driver payments saved, which seems like it should easily pay for the purchase and maintenance of a car (especially if the car lasts multiple years). Uber has access to capital so they can handle the “up front” nature of the expense. Paying people to drive a car around all day is expensive and if Uber could avoid that they would have a better business.

Yeah, 16 hours of driving a day, 7 days a week, 365 days a year for multiple years does seem reasonable for a car. Feeling like a fool for doubting Uber’s self-driving end game.

> Nobody could answer the question, “How is self-driving cheaper than exploiting human drivers like they are now?”

Huh?

There are SEVERAL obvious advantages.

* AI drivers don't get tired - they can drive 24 hrs/day if there's demand. This lowers cost because the (fixed) cost of the vehicle is amortized over more rides.

* They don't get a cut. See above.

* AI doesn't incur hr costs and can't sue you or try to unionize

Who owns the AI-driven car? Who maintains it?

Either Uber is spending a shitload of money to build, maintain, and replace their own fleet or they‘ll be leasing cars from private car owners for about what they paid human drivers in the first place.

Consider a very simple city model which requires 10,000 cars to meet demand during rush hour (3 morning hours, 3 evening hours) and 4,000 cars to meet demand the rest of the time.

A self-driving model requires the up-front purchase of 10,000 cars, 6,000 of which sit idle 18 hours per day, earning nothing. Meanwhile Uber and Lyft have zero up-front costs, and only pay drivers when the company itself is earning revenue (and presumably, a marginal profit).

I never understand why people expect there won't be self-driving cars for sale to the public which voids the need for self-driving car taxis? I would prefer buying such as car than keep taking taxis. In the end I think it would be much more convenient if you could call via app your own car in a similar way :)

That's the kind of future I am imagining

I've invested in uber so here's my take -

If uber leaves growth mode and makes smarter investments in new services/markets, they can be profitable. They have positive margin on ridesharing in most markets. I believe uber eats could also earn money in the short term. And I want them to continue investing in last-mile delivery (which I believe they have canceled for now).

Even though eats isn't earning a lot now, I believe that once all the money-burning food delivery startups go out of business and the market price for food delivery is no longer so depressed, it's a solid business Uber can make money on. I would prefer Uber just switch the business off in markets where it's impossible to turn a profit and just restart the networks/ecosystem once delivery prices normalize, but Uber is uniquely strong here because they are the only food delivery platform to also have a huge driver network they can easily tap into.

Last mile delivery is also very synergistic with their business and IMO it's just something they need to spend time on getting right and building relationships with big partners. Once this, eats, and rideshare are all working well together you have a really synergestic business. I think if Uber can pass on the efficiency/demand gains from these three products working in tandem to drivers, they can also work towards building a stronger moat around their network.

AV is the big unknown. However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch. Going from scratch is kind of risky, because it makes the whole venture dependent on the success of the vertical and requires good execution on getting people to actually use the service - it's much safer to simply sell the tech to automakers, rideshare, etc. since we know there is already demand for it there (I think there are also brand implications to Waymo/Google/Alphabet and Tesla that will make them hesitant to vertically integrate). Uber is of course also working on AV and in their case, they already have the messy business side of that vertical figured out, so I think their upside is a lot higher.

> "I believe uber eats could also earn money in the short term."

uber eats isn't a revenue play, so investors shouldn't expect any real margin contribution from it. instead, it's meant to protect the flanks--to control supply-side costs for rideshare and provide some risk mitigation through product diversification.

That's fair. To be clear I don't expect it to be a huge money maker in the short term, just something that's worth doing. Long term the margins look much better once the food delivery market starts to see some consolidation/higher margins due to less promotions and subsidies.

Very good point on the supply-side costs for rideshare, hadn't thought of that.

even long-term, it's tempting to think that synergies and market consolidation would lead to higher utilization rates through stacking (making multiple delveries at once), but indications from current players in the space are discouraging in that regard.

last-mile logistics is an exceedingly tough nut. i think it's really going to take a wholesale reconfiguration of cities around much more density and mixed-use where shared industrial kitchens and warehouses can make the synergies work out, but of course that's decades in the making.

>i think it's really going to take a wholesale reconfiguration of cities around much more density and mixed-use where shared industrial kitchens and warehouses can make the synergies work out, but of course that's decades in the making.

It's actually closer than it seems if this bet plays out: https://www.cloudkitchens.com/

yes, that's the easiest part and where there has been some activity, but even then, it's a capital-intensive business without obvious super-scalar competitive advantages.

shared industrial kitchens become advantageous only with density, proximity (mixed-use), and (unfortunately) high land values.

If that’s true it’s a really dumb idea because it doesn’t protect anything. Losing money on side hustles is what got Uber into this mess in the first place.

> However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch.

Yeah, but that puts all value add in waymo or Tesla's hands, not Uber's. Uber will have no advantage, and cannot charge juicy margins.

Uber will have the largest network of customers and that’s far from trivial to build. It easily costs $2+ per customer to get your app installed on their phone, and takes years to get hundreds of millions of installs.

If we can agree that switching costs are low for users, and that the cost of building an autonomous vehicle fleet is very large, then the advantage goes to Google who has both a huge distribution machine (owning Google Maps) and massive amounts of free cash flow to deploy.

They could purchase 100k vehicles in a blink of an eye, outfit them with AI, deploy in NYC Chicago Atlanta Austin LA and bam users will convert. They don't need to cover the globe, just the absolute most lucrative cities (which Uber relies on to subsidize smaller cities).

Additionally, I am not convinced the transition from largest taxi service to AV will be smooth sailing from a personnel perspective. Not having to manage the politics of a deeply embedded global supply chain is one of Tesla's advantages relative to big auto. At some point, drivers may say F* this in dealing with Uber which Google avoids from the get go.

The consumers are in Ubers pocket. Wayne and Tesla will be smooching to be Uner's chosen one. Businesses are demand based, not supply based.

I'm not sure you're considering how fickle riders are. I work in a (what used to be) high travel group of tech. Most all of my peers and I are heavy rideshare users. Honestly, we don't care who the app owner is, but want the rides to be consistent and reliable. None of my peers is tied to Lyft or Uber, even with promotions and "status" gimmicks. If a ride can show up 3 minutes faster on Lyft - I'm taking that over Uber. To say the consumers are in Uber's pocket is ill informed. If you're taking hundreds or thousands of rides a year and aren't paying for any of those rides - the ride share company has little to no bearing on your choice. It's not like flying an airline where there's significant advantages to reap.

I often hear people say ubers tend to be easier/faster to get than lyfts.

When I visited Japan last year, I wasn't going to bother finding out what competitors existed. Just firing up the uber app is no-brainer in comparison.

This is similar to the dichotomy of McDonald's being almost universally considered bad junk food, yet they are packed in roadside locations in small towns because they are popular rest areas among travellers whereas local mom-and-pop competitors are far less successful. Brand is a powerful thing.

You are discounting the difficulty of getting typical consumers (not "high travel group of tech") to install a 3rd, 4th, 5th app to perform the same function that Uber and Lyft already do. And when you are in a hurry, you might check 2 apps, but will you check and compare 5?

Yeah, I got my parents to start using Uber. They are not very technologically literate and could definitely not be bothered to download a new app to save 10%.

But it isn't 10% - it's probably closer to 50%.

The car is $30-50k with a lifetime of what, 10 years?

The driver needs to earn $40k/yr.

The vast majority of the cost is the driver - insurance and fuel are next, ultimately followed by vehicle capex and maintenance.

Also don't underestimate the amount of local news coverage the driverless taxi will get - combined with the "there's no rude, smelly person driving me".

I think you're severely overestimating your case, not to mention the cost will probably be determined by a multitude of factors, one of the big ones being how advanced the self-driving tech is. Most of your points are just theoretical anecdotes.

You're not counting the RD cost that needs to be recouped. You're overestimating the trust people will have with "oh didn't that once kill a person"-autopilot will have.

> not to mention the cost will probably be determined by a multitude of factors,

yes of course, but i included the big ones.

>You're not counting the RD cost that needs to be recouped.

Majority will be sunk costs by the time anyone is making money. But obviously, they will charge what the market will bear - but the margin improvement vs driven vehicles will be very significant.

The first robotaxi fleet be able to put any driver-based taxi company out of business simply by undercutting on price for as long as it takes. The only enemy is time to build that base - but the first company to successfully bring a robotaxi to market will necessarily have absurdly deep pockets because they invested the R&D necessary to build something that drives itself. If someone has a robotaxi that isn't Uber, Uber is going to be in very big trouble.

Also, I'm not really invested because I don't care - but it's really hard to overestimate the implications this has to the cost of (non-mass) transportation.

I used to work for Thoughtworks and I just used Lyft all the time. I’m not going to look at both apps wasting time basically comparing prices. Definitely not just to save three minutes. I think this kind of thinking, is a very small minority, they probably all read HN too, am I right?

I don’t use Uber cus of ideological reasons. A lot of people, even in this community, are the same.

> I don’t use Uber cus of ideological reasons. A lot of people, even in this community, are the same.

Uber/Lyft marketshare in all US markets tell another story. This community is a small echo chamber and thus rather uninformed.

Yeah, you’re right. I see what you’re saying.

I even forgot what my ideological reason was, something about them stealing tips.

I still don’t think riders are fickle like that, comparing prices amongst multiple ride share app and uninterested in promotions. I think people pick one and stick with it, more out of habit that anything else, not likely to change unless something crazy happens

I was all on Uber until they had some old controversy that I totally forgot about, but I’m not going to use it again, not for something as small as saving a couple dollars or a few minutes time difference

I worked directly in the space and I can tell you you're overestimating your "persona"s portion on the market. Also, why so you think that car is arriving faster for you on another app?

They're running more bonuses at timeframe, e.g. it's more costly.

The airline example is great. Because that's exactly the direction ridehailing is going. Just look at Uber rewards. At least with an airline you actually book weeks in advance. With ridehailing you're buying super close to the actual event.

Beieeve me, Uber has done one thing well and that's consumer ToM..

Businesses are a function of supply and demand

But most evidence is pointing to the chicken-egg game starting from the demand side :)

I wouldn't be too worried about Tesla if I was Uber. Even if they get the hardware first without competition it would be a massive undertaking to build out a competitive transport business. The capital costs to create a fleet to have similar hailing times to Uber would be absolutely massive - now you have to buy the car instead of just recruiting a driver - plus they'd have to catch up on the logistics to try to pay for a tens-of-thousands-of-dollars car 5-to-20 bucks at a time.

Waymo is more interesting since things like Google Maps routing and Waze being under the same roof give them a ton of logistics expertise to potentially tap, Alphabet also has a shitton of capital if they wanted to expend it, and they could look at it as a long play where they aren't just getting the cost of the ride back, but they're also collecting all the data. (However, it's not clear to me that this is much more data than Google already HAS just from phone location history.

barring a change in interest rates, established companies with the ability to borrow should have effectively limitless capital to deploy. We're arguably at a unique point in history with respect to small businesses ability to add leverage to throw around megacap capex e.g. WeWork

Unless TSLA or Waymo decided that they didn't want to deal with a taxi network there shouldn't be any reason they couldn't form an independent company to absorb the loan risk ( with a PE partner potentially ).

Tens of billions is not really that massive in 2020.

Tesla's plan is to have an option, after you purchase or lease the car, to make it available as part of the Tesla network. This is something you could likely enable from the Tesla app on your smartphone. That way, they don't need to pay for any vehicles to build a fleet. They have a huge advantage, being a vertically integrated automaker.

Not really, Uber has accumulated around 3 million drivers, Tesla has around 1 million cars with FSD capabilities and growing much faster than Uber. Tesla has the advantage that their fleet would be composed with their owned cars plus customer cars, my prediction would be that they would quickly becoming bigger than Uber's fleet of drivers once they have FSD and with a click of a button you could send your car to make money for you.

They can still be the top level app for all of that. They just bought shares in Lime.

Here's what I don't get about the robotaxi stuff - did the company and the investors ever actually believe that the robotaxi stuff was even close to viable, or was it just a scam all along? To me it seems obvious that fully self-driving cars are almost certainly, at best, several decades away - and, if it turns out that fully self-driving technology really does require artificial general intelligence, it's quite plausible that humanity actually will never build fully self-driving cars. This isn't something that I've just realized recently - I've thought for several years now that full self-driving is almost certainly at best quite far away. How did it happen that thousands and thousands of rather smart people fell for the delusion that there was any realistic chance of implementing full self-driving any time soon? Of course it's not just Uber in question, it's also Tesla, Waymo, and so on.

> did the company and the investors ever actually believe that the robotaxi stuff was even close to viable

IMO, absolutely. The hype for self driving cars a few years ago was massive. I forget who, but a prominent SV investor offered to make a bet with someone that self-driving taxis would be on the road in five years. There was plenty of it in HN, too.

That's the investors. Did Travis think so too? The insane amounts of money they spent on acquisitions and developing the tech suggests yes: they were trying to be first to a huge potential market. But maybe he was doing all that to scam investors, who can tell.

I think all the self-driving cars hysteria was just momentum from the hype of deep learning advances. I remember thinking about the idea of self driving cars within 10 years, "this seems crazy, but I guess I've been wrong before...". A few years later it seems even crazier. But I've also been wronger than that...

There were (are?) people talking about Artificial General Intelligence being just around the corner, which is a sign of people buying way too much into the hype cycle.

It's the sort of problem that is easily prone to extreme optimism extreme pessimism cycles. You get 90% of the way there and then the difficulty skyrockets. Getting to 95% is as hard as going from 0 to 90%. Getting to where you need to be for it to be mainstream is like 10-20X as hard as making an impressive looking proof of concept.

Space flight is another thing like that. We were supposed to have manned flights to the outer solar system by 2000. We're getting reusable first stages that are actually economical to fly and commercial orbital spacecraft in 2020. That was supposed to be 1980s stuff according to 1950s and 1960s space hype.

Putting someone on the moon? 1969. But that was done with a monstrously expensive finicky one-off architecture that could never be anywhere close to economical, and it was dangerous as hell. Routine trips to the moon that could even approach economic sustainability are at least 10X as hard as Apollo.

I strongly suspect safe, sustainable, and affordable nuclear fission power is yet another one. Getting some atoms to smash and boil some water? Easy! Build some power plants? A little harder. Then you hit the edge of that bath tub curve and the problems (waste, safety, fuel cycle, cost management) multiply and it gets brutally hard really fast.

We should learn to recognize engineering problems that have this kind of "bath tub curve" for difficulty vs ones with gentler learning curves.

I like these analogies to other engineering challenges!

It's easy to make predictions when outside a field (and I'm guilty of this fallacy too), but easy to miss the true challenges. For example, a lot of people just assume that fusion reactors will be better than fission, because that's what they were told their entire life and because we still haven't figured it out. But looking at energy density or thermal transference and fusion just looks like a really crappy heat source, something that would be incredibly difficult to ever engineer into a product without a secondary invention that is just as difficult, if not more, than the initial idea of fusion.

Fusion is much better on safety, waste, and fuel cycle. The thing I wonder is whether it can be made cost competitive with renewables plus storage when the latter is experiencing falling costs at scale. At midday solar is already cheaper than most other power sources, and economical storage at scale is probably a much easier problem than fusion (or really good scalable fission for that matter).

I work in machine learning, and I've noticed a particular dynamic in how people treat predictions like this.

In general, when there is a breakthrough in a field of research—like what deep learning went through recently—there is a gold rush of new projects that push the boundaries.

A certain category of people look at these new startups, and project that momentum out to some extremely distant problem (like AGI or fully autonomous vehicles), without understanding if this field of research necessarily leads to solutions to those problems, at least in linear fashion.

Then there is another category of person who looks at those predictions and dismisses the entire field as hype, ignoring the surge of valuable projects that kicked it all off.

Totally agree, and as newcomers enter the field they can have a mistaken sense of time as they digest a bunch of really amazing new ideas, like has happened with deep learning in the past decade (the decades before that felt much slower to me).

There are certainly some overly optimistic timelines being promised by some people and companies, but "several decades" seems extremely pessimistic. There are self-driving cars driving all over San Francisco (and presumably other cities) with minimal human driver intervention. I'm sure they're not perfect, and they might not be as good as whatever human driving ability baseline will be needed for mainstream and regulatory acceptance of self-driving cars, but I don't think there's any huge leap (like the development of AGI) required to get to that acceptance from where we are now.

There is a huge leap in regulations and public acceptance needed. Either way it doesn’t affect Uber because the tech will be easily licensable.

Several decades ago, I was hearing about flying cars. The technology existed for years. Commercial flight is a thing too, but 20 years later we're still no closer to having flying cars.

Why would self driving cars be different?

I don't know, why would any new technology be different? I feel like the similarities between flying cars and self driving cars are superficial.

The factors seems weighted very differently. Flying cars are even more dangerous than SDV (a flying ton near buildings ?). The technological soil of the era might be less nurturing than today.

> Flying cars are even more dangerous than SDV

Are they though? Statistically speaking, planes are safer than cars, and SDVs don't exactly have a pristine record track already.

Commercial planes are inspected regularly by qualified technicians, flown by professional pilots, and they don't fly between buildings in densely populated areas. Imagine if every average joe owned a helicopter, and maintained it the way he maintains his rusty old car... Small planes don't have nearly the safety record of commercial planes, and if everyone owned aerial vehicles that fly inside cities, you can be sure it would be a disaster.

I think there's an argument to be made that if flying cars were owned by a company like Uber, regularly inspected, and flown by a computer, the safety could be there, but then you're still left with issues such as noise and energy efficiency.

I never could swallow the statistics of flight safety. Of course they're safer, there's nothing in the sky. I assure you I can drive a million mile in a flat desert without a single incident while sleeping[0].

Flying cars were probably asking to operate in close proximity to things and people and it would make the probs a lot different IMO.

[0] end of hyperbole.

One of the promises about flying cars was speed: you would theoretically be able to live in LA and commute to SF. So there was definitely some amount of disruption talk.

With that said, this is sort of the point: SDVs would be close to arms reach of pedestrians virtually all the time, so I'd imagine that when all is said and done, the safety/regulatory barrier ought to be an extremely high hurdle to overcome.

There are many things that we can talk about in terms of "if only X was solved, that would change the world" (e.g. X being the cure for cancer, or X being singularity, etc). But the devil is of course in the details: until we know what X is, it _could_ be a single breakthrough but it most likely is a nearly insurmountable wall of a million factors). For SDVs, X is L5 autonomy.

Yeah they're even closer but they're not flying. I'm not even arguing for SDV or against flying cars but I do believe that flying tons in cities is (unless you have Transformers level of tech) non sequitur.

That said I'm far more about co-disrupting the world by .. walking.

General aviation (the closes comparison to driving) is more than 20x more dangerous than driving.

https://philip.greenspun.com/flying/safety

I’m not sure I understand the argument. Surely you can’t conclude from the lack of flying cars that nothing will ever happen.

I'm questioning the notion that SDV are somehow just around the corner, considering that another technology with similar regulatory/safety/public opinion challenges still hasn't become ubiquitous after over 20 years.

Flying cars aren’t (as far as I know) being routinely tested in major cities the same way self-driving cars are.

> I've been staying away from Uber stock because they have a market cap of 50B

Not defending Uber here in the slightest, but given your post history on Tesla, I find it amusing you think Uber's market cap is egregious

Why is it amusing?

Not the commenter you responded to, but am bullish on Tesla and bearish on Uber.

I don't see the parallels between Uber, a taxi broker, and Tesla, a vertically integrated energy and automotive company.

What is your perspective? Why is Uber worth $50B and Tesla overvalued?

> Why is it amusing?

Because Uber's market cap is indeed egregious, but not nearly as inflated as Tesla. So it's amusing when people like yourself rationally find issue with Uber, but cannot find any flaw in the valuation of Tesla.

Did they actually announce that they were going to do autonomous robo-taxis? I always thought their R&D in self-driving was mostly defensive, and that it was random other people assuming they were going to be autonomous. It just seems their core product has always been their marketplace of drivers. Any investments in autonomous tech would have been behind Google anyways.

Scooters were just as dubious as their robo-taxi business. Bird has basically no path to profitability, there is no obvious reason why Uber would be able to turn a profit with scooters either, especially since Uber never had a deep operations bench.

Somewhere on reddit I saw an info graphic showing what parts of the US were dominated by food delivery businesses. Uber Eats was apparently the top delivery service in the Georgia region. I don’t recall them being anywhere else.

I have this weird feeling with people ordering out food, Uber could easily shift to being a delivery service.

1) You keep your fit economy workers employed. 2) They have an app to tell them where to go from point a to point b for deliveries. 3) People are shipping more things across town and social distancing.

Honestly for what I do for my job, I’d rather pay an Uber to pick up the equipment I need to ship out biweekly and take it to UPS to get boxed and shipped. Sort of a TaskRabbit for deliveries.

The whole bad image Uber gets for drivers sexually assaulting passengers or even attacking passengers goes away.

Is Uber not already in the delivery business in the US?

In Australia, Uber Eats grew 3x post Coronavirus, and they even landed contracts with our two biggest supermarket chains to fill the gaps in their home grocery delivery services. Both companies didn't have enough trucks or drivers to meet the surge in demand:

https://thenewdaily.com.au/finance/consumer/2020/04/27/woolw...

And three weeks ago, Uber Australia launched Uber Connect, a parcel delivery service. They're running a promotion for Mother's Day - since we're still meant to be distancing from the elderly, you can use Uber Connect to deliver a home-made package to your Mom same day, faster than the postal system (which has just about collapsed in Australia).

https://www.uber.com/en-AU/newsroom/uberconnect-2/

So what you're suggesting Uber try has already happened in foreign markets - I'm surprised if Uber US hasn't already built that out there.

Uber has another problem I haven't seen mentioned. Many drivers have quit (for fear of getting sick I presume.) I know this because I drive for them (I like it) and the number of long drives to do a pickup for a short ride is way up, indicating there are no drivers nearby. I'm not going to drive 25 minutes to make $5, so I decline and the customer doesn't get a ride, I assume. If Uber wants drivers to come back they need to do more for driver safety. A really high quality mask would be a start.

Could someone w/ an understanding of accounting add to this report? Uber is "offloading" bike/scooter business to Lime, but also making an investment in Lime... is this just a way to hide losses? Essentially paying Lime to take the red off Uber's balance sheet, while maintaining an option in the micromobility market?

IANAAccountant, but I think the investment was in the past, and this announcement is that they are ditching the investment. But I could be reading that wrong.

https://www.bloomberg.com/news/articles/2020-05-07/uber-lead...

They are refocusing on what's their core business. They found out that they're too late to the scooter game and just thought best to be a platform where other providers compete

They are swapping equity. Uber exchanges its ownership of jump against shares of lime. It's a common operation and uber has done it many times. It's not directly tied to losses, because the value of the transaction is based on the operational performance of both businesses. It's not shady.

It doesn't offload their losses. It offloads their risk, since the Lime investment can't go below zero, but that's genuine and not just accounting (if Lime goes bankrupt, Uber is not on the hook for it). Buying and selling in stock is normal and legitimate, particularly in times like these where a valuation of Jump in terms of Lime shares is probably a lot more stable than a valuation of Jump in terms of cash.

I feel sorry of what happened to Jump. They had a good product, but Uber bought them and now when they wanted to make their income look pretty while 'protecting their lime investment', they gutted Jump and handed the carcass to lime.

Can anyone explain why Lyft is not experiencing the same pain? I've always used them over Uber (not an investor in either, just a customer) and now as much as ever Lyft just seems to be a smarter, more mature company.

But they are? Lyft laid off 17% of its staff the other day, despite promising no layoffs weeks ago [1]. Lyft doesn’t have Uber’s exposure in other business sectors like food delivery or scooters (a sector it actually exited in November), and it doesn’t have Uber’s global business (for better or for worse — it could be better now but be worse if other parts of the world recover before the US), but I would hardly call it the “smarter, more mature company.”

This sector is in trouble, period. Lyft is the smaller player. That could work to their advantage or not — but I would say both companies are experiencing the same pain and are equally troubled.

[1]: https://www.businessinsider.com/laid-off-lyft-employees-desc...

Quick correction: Lyft continues to operate scooters (as well as bikeshare), e.g. see this recent program: https://www.lyft.com/blog/posts/LyftUp-Scooter-Critical-Work...

I thought Lyft's pain was pretty similar. They had about the same percentage layoffs:

https://news.ycombinator.com/item?id=23020812

And reduced internship salaries:

https://news.ycombinator.com/item?id=23047687

Although from searching the recent news it does look like they've seen some good news as well, like a share price rally after the Q1 report:

https://news.ycombinator.com/item?id=23095844

So Lyft got hit hard, but probably less so because they have fewer quixotic sub-ventures than Uber.

I missed these. Thank you!

Given that Lyft doesn't have a food delivery business to rely on, this is pretty hard on them.

Lyft doesn't have the huge ownership stakes in ride sharing services other countries that have to be adjusted at inopportune times. Probably best to compare income and cash flow statement for both companies and to take a look at capital structure.

> The challenges are continuing in the second quarter. In April, rides were down 80% globally compared to last year, Khosrowshahi said. But rides have been increasing for the past three weeks and bookings in large cities across Georgia and Texas, two states that started re-opening, are up 43% and 50% respectively from their lowest points, he said.

This isn't exactly what he said, but 1 * (1-0.80) * 1.43 is... -72% from the original.

I mean, an 80% loss isn't good, but a 400% gain is pretty excellent. Growth like that is how you get to the moon!

Where is 400% coming from?

The joke is if you drop 80% and later increase 400%, you're back where you started.

Best of luck to anyone working for Uber in these times.

I'd rather rent a bike or scooter right now than get in a stranger's car. I don't get it.

Yes, but how much will you pay? Bike rental like Jump or Lyft hasn't ever been profitable, nor should it be. It should be viewed by cities as a way to manage their street capacity, and like bus service, should not be expected to be internally profitable. This was the model of Motivate (Citibike, Bay Area Bike Share) before Lyft acquired them.

I agree completely to that principle.

I guess read what I wrote as for-profit car rental sounds stupider than for-profit bike rental in these times. Still a weird call for Uber which must lie to itself about the potential for profit.

At least here none of the bike or scooter rental services are currently working. Jump in the Uber app only shows "We will be pausing Jump in your city."

I doubt many of Uber’s casual users understand how insanely unprofitable the current business model is. 2.9 billion is 3 unicorns. Even before COVID they’ve been losing something on the order of a billion a year.

It’ll be interesting to see if they can turn this around.

I wonder what it takes to take down Uber and alike. These companies keep losing money but still going on.

Is it possible that they pivot the whole business to Uber Eats only?

...or "pivot" to selling themselves to GM or Avis or some taxicab company, at pennies on the dollar?

What would qualify as a turn around? If three years from now they are a $50 million company that's profitable, would that work?

I don't think so. Being a 50mm company probably includes no longer serving the majority of markets they do now. At 50mm they become a regional taxi service with phone hailing rides.

Truth is - now that they are public ~ I'm not sure what success is... for a lot of people who started there a long time ago - the IPO was 'the success' now the public is left holding the bag (mostly by their own choice of buying the stock).

I think they meant $50 million in profit.

No, I was talking market cap. That's the size of some nation-wide retailers (like J.C. Penney).

I think Uber can exist, I just don't see how what they do is worth billions. When Uber withdrew from Austin, it took a couple of days for very similar replacements to pop up.

> 2.9 billion is 3 unicorns.

Hmm, unicorns are usually defined by $1B valuation, while the number of $2.9B in loss is related to revenue. So I think the comparison doesn't hold, it's apples to oranges.

Seems like a fair comparison, they could have acquired 3 unicorn companies with that money.

Good point

Per year.

(Comparisons involving both stock and flow measures are somewhat dodgy, but they’re made all the time (debt/GDP, annual rent/house price, unicorns/revenue)).

Edit to add: they’re not really dodgy per se, but the result is a rate, ie has a time dimension.

Didn't they just buy another scooter company days ago?

I read that same headline yesterday: Uber leads $170 million investment in scooter company Lime. Wtf?

https://www.cnbc.com/2020/05/07/uber-leads-170-million-inves...

The problem with the bike and scooter rental businesses is they're unable to offload the maintenance burden to someone else like the car business.

Uber thought it was a good transportation business. It was wrong. It's a good market maker, and a good middle-man.

Ebay? Middle-man. All retailers? Middle-man. Pay Pal? Middle-man.

Find out how to be the middle-man.

I wonder what will happen with all their e-bikes? I wonder if they will resell them?

Uber never had $2.9B to lose.

The article says "Uber brought in $3.54 billion in revenue in the first quarter, up 14% from the same time last year." so they did and more than last year before incurring loss.

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