Uber is just a terrible waste of capital to have an app company with an accumulated deficit almost five times as much as Tesla which makes cars.
2.) Fuel adoption by running in the red, subsidising consumer costs to keep prices low and fuel adoption.
3.) IPO and sucker all those consumers into buying shares in a company they know and love.
4.) Cash out and let the new shareholders figure out that the company isn't at all sustainable.
Curb is a bit more expensive than a street hail but generally less than Uber due to a lack of surge pricing. When it's raining, Uber is about 2x the price of a cab. When it's busy after an event at Madison Square Garden, Uber is about 3x the price of a cab. On a recent Friday evening, Uber was showing $105 for a 25 minute ride with a relatively long wait. I hailed a cab and it was $28 for the same ride. Both prices exclude tip.
Note, of course, that this is my own personal experience in NYC over the last year and will not apply to all cities or even all locations in NYC.
And to be fair, had self-driving cars indeed become commonplace by now (as many people ~10 years ago believed would have happened), Uber would rightly be one of the world’s most valuable companies.
1.) Techno-optimists including those who saw the extremely rapid progress in ML across various domains after very little progress for decades. If we've made so much progress in 5 years, surely we can achieve almost anything in ten more even if we're not quite sure how!
2.) People whose self-interest was wrapped up in it happening so they just didn't want to probe too deeply.
3.) Those who knew it was probably flim flam, but hey whatever parts the rubes from their money
4.) Those who just figured that so many people who apparently believed in it can't possibly be wrong. (And there were a bunch of, especially, younger people who really wanted this world where they didn't need to own a car.)
I do think today there's a better appreciation of just how challenging it is for AI to deal with an unconstrained physical world.
You give an extremely charitable explanation. Given what we know about Kalanick character I doubt if your explanation is reasonable.
Uber didn't start offering unsustainably cheap rides until mid 2013, when UberX was launched. Its self-driving research program was announced not long after in early 2015, so it's quite plausible that a long-term pivot to self-driving was indeed part of the UberX business strategy from the beginning.
Uber’s only path to levels of profitability commensurate with its VC valuation in 2013 that wouldn’t have involved self-driving cars would instead have required that the demand elasticity for taxi rides be so low that after getting people Ubering everywhere, Uber could successfully raise prices above the level of the taxi services it displaced without demand falling off a cliff.
Although Kalanick probably believed Uber was just that good, I doubt his investors did.
Or to put in reddit terms: how do you know when you've joined a pump-n-dump business?
The fable of the talking horse is probably apropos to a lot of these situations. https://naomistanford.com/2009/02/09/teaching-the-horse-to-t...
I thought Uber's line was that the drivers were independent contractors. By their own logic Uber only employs the engineers and support staff that actually work at Uber not the 4 million drivers.
Edit:
> They operate across all regions. All of that adds complexity.
I thought the idea was that by operating in multiple regions Uber could leverage economies of scale and deliver ride-hailing services cheaper than traditional taxi companies. Is this hypothesis completely incorrect then?
So your theory is probably correct, economies of scale don't exist. This is the same reason why a delivery company in Texas isn't also doing bike courier deliveries in Hanoi. On the surface it is very similar but they really have nothing to do with one another.
Pretty much yes. A local taxi services usually pays for their drivers and a few dispatchers. In my city they'd even introduced basic mobile apps around the same time Uber popped up. There's not really many places for money to go to waste.
Uber removes the dispatcher and then introduces software engineers, translators, product managers, SREs, executives, scrum masters, marketing, sales, etc.
From a customer perspective Uber is often worse as well. Pre-booking simply doesn't work. A traditional taxi company will make sure they have someone available at the right time for the booking. Uber just hopes someone will be available 30 minutes beforehand. Uber also doesn't seem to make it obvious to the driver that it's a pre-booking as they often show up 15 minutes early and angry that I'm not ready for them.
Correct. Which is exactly why they go to great lengths to reduce the power of the labour without which the company is a black hole of wasted capital.
so you should only count those drivers in jurdistiction where they've been clearly defined as Uber's employees
Sorry to be dumb, but can you explain this sentence a bit further? What do you mean by "burning $6B in accumulated losses"?
It means that they burned $6B in total before becoming profitable and eventually paying it all back. So they are now lifetime profitable on a cash basis.
Is this like an accounting term? Because the ordinary interpretation of that does not make sense, for obvious reasons.
Also, putting in 6B to (maybe) get back 6B 10 or so years later sounds like a shitty investment to me. ¯\_(ツ)_/¯
Note that the investment wasn't to get back $6b ten years later, it was for all future profits.
This was one of the very best investments in decades.
TSLA market cap is currently greater than 600B and it produced 6B in positive cashflow in 2021 alone.
Did you even check the website, btw?