Hacker News Reader

Comment by paxys | Hacker News Reader

There are two factors at play here:

- Tech companies are moving to remote/hybrid work (whether by choice or not) and don't need the office space.

- Tech companies rode the bubble and made wild headcount projections between 2018-2021 and leased space accordingly. Now after the freezes and layoffs the exponential growth stopped and they realized they don't need as much of it anymore.

So while covid/remote work is partially to blame, it doesn't tell the full story. Companies in Uber's cohort have just never been sustainable at all. Now that VC money (including tens of billions from Softbank/Saudi Investment Fund) has stopped flowing in and the market demands actual profit, they are having to face reality and cut spending wherever they can.

View on HN

I agree in part, but the statement "Companies in Uber's cohort have just never been sustainable at all." is just not true. It's some sort of myth that Uber only ever worked by subsidizing rides with VC funding. But that's just not true from the analysis I've seen, before covid, Uber was profitable in their main markets like SF and NYC. Covid changed things but around they same time, they went public and stopped getting VC funding.

Here's their financial report plus an AI to chat with https://docalysis.com/files/5472910746

That document shows Uber lost $9billion in 2022, right?

Yup. Their free cash flow is positive, but that's because it ignores share based compensation (which is pretty crazy for a tech company).

Yes the share based comp in 2022 was $1.7b which is a lot, but the losses on marketable securities were the biggest factor in 2022 ($7b). Some of that may have been on own debt though.

What is the plan exactly? keep going at a loss until self driving cars? If they raise prices, do riders use lyft instead?

Uber calls all employees into the office on Tuesdays and Thursdays. https://www.uber.com/blog/our-return-to-the-office/

How many actually go, though?

> At the same time, employee feedback tells us that when people work in the office regularly they are more engaged, have a stronger sense of belonging and report overall higher satisfaction with work.

I love the corporate bullshit speak. The people who report “higher satisfaction” working in an office should go and do that instead of forcing their views on everyone else. Some of us have lives and don’t require forced socialization or a crowded open office to feel a sense of belonging.

I think an important piece of having that “higher satisfaction” is having the other folks you work with in the office with you. I think ultimately we will end up with remote companies and in-person companies. Both approaches work great. But the in-between not so much.

I don't understand why uber couldn't be profitable? Every time anyone uses their app, they bring in x dollars in fees. Seems pretty lucrative to get multiple dollars basically anytime a user opens your app.

You have to bribe drivers with rewards. The pool of people willing to drive around others for the actual $10 an hour they clear is not high enough to keep the market going (in many cities at least, sure it’s easier in huge cities)

It's not just the performance incentives that Uber and Lyft are paying either, they operate staffed offices in many markets to engage with potential, new and current drivers.

Leasing office space, paying employees and doing this in each city costs real money, and you need this infrastructure to keep your pipeline of active drivers filled.

Interesting tidbit in the article "Uber told CoStar News that the company never occupied the building." So looks like they over-provisioned by about a factor of 1/3

Third factor, unique to SF, is its unique system of taxing gross receipts.

Reply on news.ycombinator.com