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Businesses The Almighty Buck China Transportation Technology

Uber Lost $800 Million In Third Quarter (cnbc.com) 156

Posted by BeauHD from the pennies-on-the-dollar dept.
According to a report from The Information (Warning: paywalled), Uber has lost more than $800 million in the third quarter. CNBC reports: The results, The Information reported, put Uber on pace to record an 25 percent steeper operating loss than last year, of at least $2.8 billion in 2016, before interest, tax, depreciation and amortization. Despite steep results from one of the world's most valuable start-ups, these results would have been worse if not for a one-time windfall thanks to the sale of Uber's China business to Didi Chuxing, The Information reported. On the bright side, Uber's revenue is skyrocketing, and its rate of losses slowed from the prior quarter, The Information said. Still, the report comes as Uber's multi-billion dollar valuation has come under scrutiny from those who say its business model depends on subsidies and faces looming battles over regulation.
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Uber Lost $800 Million In Third Quarter More

Uber Lost $800 Million In Third Quarter

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  • Lost $800 Million (Score:5, Insightful)

    by Oswald McWeany ( 2428506 ) on Tuesday December 20, 2016 @09:05AM (#53521157)

    Imagine what they would lose if they had to face the same regulation and oversight as everybody else in the Taxi industry.

    • Re:Lost $800 Million (Score:5, Funny)

      by Entrope ( 68843 ) on Tuesday December 20, 2016 @09:13AM (#53521197) Homepage

      Sure, Uber is losing money now, but they'll make it up in volume.

      Startups want to be the next Amazon.com, but more often end up the next Pets.com.

      • Re:Lost $800 Million (Score:5, Interesting)

        by rmdingler ( 1955220 ) on Tuesday December 20, 2016 @09:27AM (#53521269) Journal
        It's the new business model: as long as you can keep investment capitol coming in, you expand like wildfire in the hope that what you do eventually becomes profitable.

        Uber's vehicles are provided and kept up by empl..., er, subcontractors, company recognition is approaching ubiquity, and the rider software is already in place. The largest expense now is lobbying to keep what they do legal... in a thousand different places.

        • Re: (Score:2)

          by mjwx ( 966435 )

          It's the new business model: as long as you can keep investment capitol coming in, you expand like wildfire in the hope that what you do eventually becomes profitable.

          Actually, the idea is to become so large that you are too big to fail. Then you can stop worrying about raising capital and just take it direct from the government.

          • Re:Lost $800 Million (Score:4, Interesting)

            by tehcyder ( 746570 ) on Tuesday December 20, 2016 @10:03AM (#53521455) Journal
            "Too big to fail only" really applies to industries like banks, where innocent customers would suffer serious hardship if the business went bust.

            If Uber went bust, the customers and drivers could just use Lyft, or conventional taxis.

            • Re: (Score:2)

              by plopez ( 54068 )

              See also the US auto industry, where a crash in employment would be a disaster for the global economy. Which is why Obama proved them up for a few years.

            • Too Big to Fail is a code phrase for "Monopoly/Oligarchy"

              The problem isn't that they are too big to fail, it is that we don't allow them to fail, so they take additional risks where normal sane people wouldn't. See the Derivative Market for Sub Prime Loans for example. The only people who lose are .. the same people who would lose anyways, we just shift the losses around the table enough to hide them in plain sight.

              The proper response to "too big to fail" is to start locking people up for their mismanagemen

              • The problem isn't that they are too big to fail, it is that we don't allow them to fail, so they take additional risks where normal sane people wouldn't

                "Too big to fail" occurs when a downward spiral is in view should said company fail. GM was a good example of this. GM failing was X number of jobs but the sprinkled impact was 5 - 10 times more jobs. It was cheaper for the government to bail them out and have them pay it back down the road which is what ended happening.

                The proper response to "too big to fail" is to start locking people up for their mismanagement under failure to do due diligence. Start locking up CxOs and all the Corporate Board members in jail, and strip them of their fortunes (including all their "protected assets" in trusts). An amoral economy is immoral at heart.

                I agree that they should be stripped of MOST of their fortune BUT locked up would depend on whether they were reckless or performed fraud. Plenty of companies have failed due to their inabil

        • Re: (Score:2)

          by mwvdlee ( 775178 )

          Who gives a shit about ever making a profit? As long as the investment capitol keeps flowing it, you'll be able to skim enough money to easily last you the rest of your life after your business has finally burst. The idea is to make investors believe they will get rich in the future; it's the oldest scam in the book.

        • Worse - they put an awful lot of good, solid companies out of business while they "disrupt" and then disappear - in this case, paying whoever the can to change whatever regulations they want along the way without any particular regard as to how they may affect others.

        • company recognition is approaching uberquity

          Fixed.

        • Re: (Score:2)

          by clodney ( 778910 )

          It's the new business model: as long as you can keep investment capitol coming in, you expand like wildfire in the hope that what you do eventually becomes profitable.

          As a way to build a new market, subsidized pricing works and may well be justified. When Amazon started, the notion of shopping for books on your computer was strange. For the most part people were used to browsing through their neighborhood bookstore, and it was not at all apparent that an online only store was viable. But by undercutting brick and mortar stores, they got people to try their services, which let them expand and continue to build their infrastructure.

          I haven't been paying much attention l

          • Re: (Score:2)

            by jbengt ( 874751 )

            As a way to build a new market, subsidized pricing works and may well be justified. When Amazon started, the notion of shopping for books on your computer was strange. For the most part people were used to browsing through their neighborhood bookstore, and it was not at all apparent that an online only store was viable. But by undercutting brick and mortar stores, they got people to try their services, which let them expand and continue to build their infrastructure.

            And now, I don't have a bookstore anywhe

    • Imagine what they would lose if they had to face the same regulation and oversight as everybody else in the Taxi industry.

      A lot less probably because nobody would loan them the money to do that.

      Never tear down a fence until you are absolutely certain why it was built in the first place.

    • I think you guys assume there is some "regulation" going on with the existing taxi industry, like training for the drivers, and regular safety checks on the equipment. Guess what? There isn't. There is no magical "regulation" fairy going around and checking to see if the taxi companies are complying with anything, except for paying their fees to the local government. It is laughable that people assume that there is some sort of actual oversight going on.

      • I actually should stop awnser ing more than one of your idiotic posts per day.
        You might be right about the USA. (but I doubt that)
        However Lyft and Uber are operating world wide. I can assure you: everything you claim, it would not exist, is existing very heavily in Germany and France, the two countries I'm most experienced in.

        • "is existing very heavily in Germany and France, the two countries I'm most experienced in."

          Bullshit. Like most Europeans you assume that it is happening, that there is oversight and people in charge that know what they are doing. But it isn't true: simply because of the mathematics involved. There are too many taxis in order for any real oversight to be performed. And there certainly isn't in the US. Anyhow, why do you care? If you like your expensive taxi service, then go use it. Uber makes transportatio
      • You mean regulations like worker rights and conditions. Because those do exist. Moron.
        • Really? What "worker rights" and "conditions" do taxi drivers enjoy? They drive a leased taxi all day long for money. You guys are comical, thinking that there is some magical fairy taking care of taxi drivers.

      • Re: (Score:2)

        by lhowaf ( 3348065 )
        In my (US) city, there's a whole chapter of city code devoted to taxi regulation. Granted, there isn't a lot of oversight for non-safety things but customers can lodge complaints for any other violation.

    • They just wouldn't be in business. Uber is not a tech or a transportation company. They are a lobbying company. Their business case is to make sure they can operate in conditions more favorable than their competitors.

      • Weird, they seem like a transportation company to me - every time I use their app, I've been successfully transported somewhere.

        As for the operating conditions, I'm all for it. Eventually the competitors and their payoffs.... erm, FEES.... to the local governments will go away. I don't see the problem.

        • So paying off the government to eliminate their competition through uneven regulation is ... good for business?

      • Uber is not a tech or a transportation company.

        Hogwash. They are a taxi service. Nothing more, nothing less. Their money comes from taxi fares so that is what they are. They make good use of tech but that doesn't make them a tech company, it makes them a tech savvy taxi company.

        They are a lobbying company.

        That might have some validity if they actually received money from lobbying. Any lobbying they do is to facilitate their business model but it isn't the core of what they do. Anyway mostly they just enter a market and completely ignore whatever laws are there rather than lo

        • They do lobby to change laws in their favor and they do get results in many jurisdictions. Of course during the process they ignore the law.

          They are a lobbying company because they receive money from investors and use it to change taxi laws all over the world and hope they can get a monopoly on taxi service down the road.

    • Imagine what they would lose if they had to face the same regulation and oversight as everybody else in the Taxi industry.

      Though the rest of the taxi industry is profitable, the fares are sufficient to pay for vehicles and wages, there's no fundamental reason Uber couldn't do the same.

      • Uber makes money by undercutting taxis. Anything that increases costs makes them less profitable, as well as reducing the number of people who would be eligible to drive for them. For example, requiring the same class driver's license, with the associated testing, would eliminate a large swath. Background check, there goes some more. Mandatory inspections and re-testing, and regular testing of vision and health will also force some to drop out. Enough of those and you lose the "convenience" factor because y

        • Uber makes money by undercutting taxis.

          My understanding is that they make money by providing an alternative service and taking advantage of whatever they can. Cheaper workers and costs being one. Being cheaper than their competition in probably most. However, they are apparently more expensive than taxis in several large locations, such as Seattle, but taxis in those locations have reputations for being trashy old cop cars sold at auction (often still with battering rams and search lights) and not even showing up to pick you up if they don't fee

          • ... and not even showing up to pick you up if they don't feel like it will be profitable enough for them.

            Uber drivers learn over time which rides look most profitable and which ones are likely a waste of time. I know some in my area are more selective than others in deciding which pings (ride requests) they will accept.

  • Went to Las Vegas this summer. Payed $12 for a shuttle ride to my hotel. Buy the ticket, wait 8 minutes on the bus for it to fill, then we take off and stop at two other hotels before we arrive at mine. On the trip back, my buddy gets an Uber. Three of us ride the same distance for a total of $7. I don't see how anyone can be making money at that low of a price.

    • Re: (Score:2)

      by Higaran ( 835598 )
      They are not, no one is, not the drivers, and not Uber apparently.
      • The drivers are making money. Try having a conversation with one sometime. As for Uber, I remember when guys like you were saying the exact same boring things about Amazon. ($857 million in profit last quarter) But you keep on, uh, doing whatever it is you're doing. Or not doing.

        • A lot of them are only making money if you ignore all of their fees. Between insurance, gas, depreciation, downtime, the full boat of taxes and everything else they often make far less than minimum wage.

          • I average around $10 / hr. in my area if I only drive on Friday and Saturday evenings when the demand is high. This is counting up all of the time I am "online".

            I usually park and read a book between rides, so if you only count the time I'm driving it comes out to a bit more.

            Once I take out expenses and $0.54 / mile, I come out to a loss on paper. I have a vehicle with a low cost-to-operate, so I end up in a better position than other Uber drivers in the long run.

            • Re: (Score:2)

              by jbengt ( 874751 )
              Sound like my son netted more money delivering pizzas for just tips than you did driving for Uber.
        • Give it up. All these guys are white knights trying to "save" the Uber drivers. Apparently the drivers are stupid, and they need these "smart" guys to help them out.

        • The drivers are making money. Try having a conversation with one sometime.

          Not sure you really know what you are talking about. Also, define the "making money" when you answer this kind of question. To me, "making money" means the money your earning is consistent and significantly higher than a minimum wage after deducting all expenses involved in doing the business (car depreciation, insurance, gas, etc).

          And yes, I did talk to my friends who are Uber drivers. Most of them made lower than minimum wage as a casual driver, and they are doing it for fun, not for money. If they really

          • What is a typical cost of a car, per distance, in the US? In the Netherlands, about 0.19 EUR/km is the bare minimum in marginal costs for a small car with good fuel economy.

    • Actually I got the opposite question. How can they not be hugely profitable? In your example: Ubers cut is 20% of that $7, which is $1.40. For that they need to keep their system online and thats basically it as far as I can see. The driver needs to pay for everything to do with the car.

      • They need to keep the system online, they are likely paying a subsidy to the driver for the low cost, they pay sign-on fees for new drivers, they run offices and recruitment campaigns for drivers, and they pay for advertising. It adds up.

    • isn't it like 10 minutes or less from the strip to the airport? say 5 round trips an hour at $14 each round trip. $7 there and back for different people is $70 an hour before expenses. not too bad.

      NYC taxi is a huge rip off. the yellow cabs cost almost $100 to rent for a shift. these are old cars that have long been paid off. $100 per shift plus gas. you're out $150 or so before you break even to take money home for bills

      • isn't it like 10 minutes or less from the strip to the airport? say 5 round trips an hour at $14 each round trip. $7 there and back for different people is $70 an hour before expenses. not too bad.

        It's something like 10 minutes each way. I've taken the ride from the Strip to McCarran airport. That would be 3 round trips per hour presuming there is zero time waiting between trips, which is an unrealistic assumption. It's also unrealistic to assume there would be a paying fare for every leg of those trips. So in an unrealistic best case scenario you are talking about $42/hour ($7/trip * 6 trips). More realistically it would probably be closer to half that. S20/hour is roughly $40K/year assuming a

        • You guys don't know what you are talking about. The current trip price is $21.22 from the airport to the strip. Go check it yourself using the Uber app. So based on your numbers it would be $21.22/trip * 6 trips which is $126/hr. That is more than YOU make, even after taking out expenses.

          Uber also pays bonuses based on number of trips. Uber drivers aren't stupid. They wouldn't do it if it wasn't profitable.

          • You guys don't know what you are talking about. The current trip price is $21.22 from the airport to the strip.

            Uber prices fluctuate. It's quite possible a $7 fare was what was charged for that particular trip. I merely took his numbers and pointed out that his assumptions about profitability were unrealistic.

            So based on your numbers it would be $21.22/trip * 6 trips which is $126/hr.

            It isn't $126/hour unless you make some very unrealistic assumptions and there is plenty of data out there indicating that Uber drivers don't make anywhere near that kind of money. You apparently didn't pay attention to that. I'm not saying someone can't make a living as an Uber driver. Just that they pro

            • Exactly. Prices fluctuate and there are also bonuses that come into play. So your numbers are worthless and you don't know what you are talking about. You made unrealistic assumptions. I'll bet many Uber drivers make more than you do.

          • If Uber charges $21.22 and the airport shuttle is $12.00 (see the head post above) why would anyone not in a hurry use Uber? And if one were seriously in a hurry -- say to catch a flight or make a meeting -- wouldn't they just grab the first cab in the queue?

            • Maybe people *gasp* prefer Ubers service over a shitty cab or shuttle? Could it possibly be true? No, couldn't possibly be true. I'm sure they would rather just wait in a queue for a taxi for unknown cost or a crappy shuttle which drops you off God knows where.

      • isn't it like 10 minutes or less from the strip to the airport? say 5 round trips an hour at $14 each round trip. $7 there and back for different people is $70 an hour before expenses. not too bad.

        Nope. In reality, the driver app doesn't work the way you are hoping it to be -- allow you to pick up back and fort. Also, in reality, what you said may or may not happen at all. If it does happen, it won't be as often as you think; thus, you can't really make money that way.

    • The question isn't "how is Uber making money at that low a price" but "Hey wtf why is this shitty shuttle costing me $12?!?!?"

      Tourists line up at Penn Station for taxis for 15 or 20 minutes sometimes, for the privilege of paying more. They just don't know that there are 50 Uber drivers in the neighborhood. Sure, everyone here knows what Uber is and how to use it. You think the whole population is that knowledgeable?

      • Probably because Uber doesn't scale. The shitty shuttle really does cost $12 with a thin margin. Uber exists in a bubble where VC funding is being used to dramatically undercut their competition at thoroughly unprofitable rates. Once the competition does go away, do you really think that Uber would still be under $12?

    • The current trip cost from the airport to the strip is $21.22. Go check it yourself. The drivers are making money. They wouldn't do it. You guys assume Uber drivers are stupid and desperate. They aren't.
      • And yet Uber has been losing $2 billion dollars on revenue of $1.4 billion. That's a a negative 143% profit margin. Good luck with that. https://ftalphaville.ft.com/20... [ft.com]
        • I didn't say Uber was making money. I said the drivers were. Ubers net revenue is $1.7 billion, up 240% since last year with slowing loss rates. You guys should stick to computers, not commenting about business or investing.

          • Re: (Score:2)

            by Nidi62 ( 1525137 )

            I didn't say Uber was making money. I said the drivers were. Ubers net revenue is $1.7 billion, up 240% since last year with slowing loss rates. You guys should stick to computers, not commenting about business or investing.

            And with that net revenue of $1.7 billion they still posted a loss of $800 million, meaning they lost $2.5 billion total this quarter, and are on track to post a net loss of over $3 billion for the year.

            • Um yes. Do you think companies just start making money immediately, magically? Look at Amazon. Huge losses for years. They just posted a $513 million profit in the last quarter. Slashdotters always complain that companies are so short sighted when it comes to finances. Ironic. Don't worry about the Uber investors, believe it or not THEY KNOW WHAT THEY ARE DOING.

    • Or for $20 you could have had a 3 day bus ticket that would have taken you anywhere you wanted to. (Vegas has a pretty good public transit system). We rode all up and down the strip, took it out to UNLV's stadium, got between the hotel and the airport.

      The 24 hour fare is $8. So for $4 cheaper than your shuttle and only a dollar more than your friend's Uber Ride you could have done as much travel as you wanted within 24 hours.

  • The no-rules no-ethics new dotcom boom (Score:5, Interesting)

    by StandardCell ( 589682 ) on Tuesday December 20, 2016 @09:26AM (#53521259)
    Those of us who have been through dotcom 1.0's boom and bust know that there are patterns here - high stock valuations, no profitability, no real exit strategy, and hope of acquisition. What makes this time a bit different is that the ethics of the businesses are pretty challenged this time around.

    With Uber, you get a company that knows it gets a free ride (no pun intended) on the people who sacrifice their personal vehicles' wear and tear that won't be fully covered by the money they receive, is schizophrenic when it comes to its disposition on whether its drivers are employees or contractors, fails to impose safety standards and inspections of both vehicles and people, actively encourages people breaking the law by not requiring their drivers to have commercial insurance policies on their vehicles and acting as a taxi company, and pretending to be an insurance company in violation of law by claiming they will self-insure for a million dollars of public liability without a certificate from the respective insurance commissions of the states they do business in.

    Revenue growth isn't hard when you throw enough resources at something. A million average people will happily pick up something cheap or free and easy no matter whose expense its at. Profit growth is an entirely different animal. I believe when the legal chickens come home to roost, Uber will come out to be made out to be one of the biggest boondoggles in the latest dotcom boom. These days, there's a type of challenged ethics pervading the corporate culture of the new boom where people just go break the law and hope that things will sort themselves out. In the long run, it isn't the smartest business strategy in the world, and it isn't just Uber - and yes, I'm looking at you Theranos and Magic Leap. Even when the companies are legitimate, it seems the premiums people pay for them are ludicrous and defy the most basic business analysis of recovery of investment in a profitable way. I can't imagine this will all end well even if the magnitude of the failures are masked by inflation and currency devaluation.

    • Re: (Score:3)

      by mjwx ( 966435 )

      Those of us who have been through dotcom 1.0's boom and bust know that there are patterns here - high stock valuations, no profitability, no real exit strategy, and hope of acquisition. What makes this time a bit different is that the ethics of the businesses are pretty challenged this time around.

      I think they have an exit plan, the owners will amass as much as possible in untraceable and unrecoverable funds, then skip off to a non extradition country.

      This kind of thing has all the hallmarks of a Skase. [wikipedia.org]

      • ". What makes this time a bit different is that the ethics of the businesses are pretty challenged this time around." The dot.com 1.0 bust had a lot of unethical crap flowing around as well, including business models that turned out to be nothing more than ponzi schemes to take investor cash and give back a big chunk to the earlier investors at overinflated evaluations, like $1 on every penny.

    • what's different here is they aren't pushing the worthless stock onto your everyday people like in the late 90's. back then the banks knew the companies were worthless and they went on CNBC and lied to get people to buy the stock. now most of these seem to be hedge funds and other High Net Worth people willing to invest and no chance for us peons.

      • Unfortunately, many of those funds are increasingly invested by other funds, which end up being bought by "regular folk" or teachers pension funds or what have you. It all comes around.

      • Re: (Score:2)

        by Nidi62 ( 1525137 )

        what's different here is they aren't pushing the worthless stock onto your everyday people like in the late 90's. back then the banks knew the companies were worthless and they went on CNBC and lied to get people to buy the stock. now most of these seem to be hedge funds and other High Net Worth people willing to invest and no chance for us peons.

        Except us peons will still get screwed when all these millions and billion dollar valued startups fold because they have no revenue stream and our current record-high markets crash. There goes your 401k, personal investments, your pension (if you are lucky enough to have one), etc. It's going to be painful when it happens, but my plan is even if my 401k takes a big hit, we have enough cash saved up so that come recovery time I'll buy some index fund stocks cheap and ride the recovery wave.

    • Re: (Score:3)

      by bigpat ( 158134 )

      Regardless of what you think of Uber's practices, the Uber model itself is a more free market model of supply and demand. Versus The Taxi model which is an artificially limited supply in order to raise prices.

      Taxis are one of the pillars of big city corruption and machine politics... along with bribes for liquor licenses and special permits for construction.

      That is why some people attack Uber. Because the political machine isn't getting greased enough for their liking. And the result of all that lack of

      • How can it be a "free" model of supply and demand when the costs are artificially lowered to undercut their competition? That's classic short-term monopoly behavior.

        • How can it be a "free" model of supply and demand when the costs are artificially lowered to undercut their competition? That's classic short-term monopoly behavior.

          True, but as with any monopolist whoo cuts prices below costs the question is can they survive long enough to drive competitors out of business? Uber's main problem is the barriers to entry for competitors is relatively low, so if they would drive out competition as soon as prices rise competitors will come bak into the market. In Uber's case, their competitors seem happy to let them bleed themselves dry and no get involved in a price war. When I compare Uber/Lyft/Cab prices Uber is usually significantly lo

      • Another uber troll without the facts https://ftalphaville.ft.com/20... [ft.com]
        • Just because someone says something you don't agree with doesn't make them a "troll". If the people at FT knew anything they wouldn't be writing articles for 100K a year.

        • Re: (Score:2)

          by bigpat ( 158134 )

          Another uber troll without the facts https://ftalphaville.ft.com/20... [ft.com]

          Not going to register with ft.com just to read an article with "taxi unicorns" in the title.

          What I am is very much against the corrupt big city machine politics that created a system where you get a taxi "medallion" from the city through a corrupt good old boys network in order to be able to pick up passengers on the street in that city. That isn't about safety, that isn't about health, that isn't about any legitimate regulations or careful study of what level of taxi service meets the demand and provides

          • Exactly. People think the medallion system is some sort of magical fairy to assure quality and safety. It is hard to believe that people are that stupid.

            • Re: (Score:2)

              by bigpat ( 158134 )

              Exactly. People think the medallion system is some sort of magical fairy to assure quality and safety. It is hard to believe that people are that stupid.

              Admittedly I have only take a few Uber rides, but in terms of safety and quality they compare favorably to the worst of the taxi service rides I have taken. I've had at least a few rides in taxis where I wasn't sure I was going to make it to my destination because of mechanical issues, a few rides in taxis where they were just dirty and unpleasant and a few rides in taxis where the person driving seemed to be a bit mentally unstable. I am sure there are plenty of people having those same sorts of experie

    • Those of us who have been through dotcom 1.0's boom and bust know that there are patterns here - high stock valuations, no profitability, no real exit strategy, and hope of acquisition. What makes this time a bit different is that the ethics of the businesses are pretty challenged this time around.

      /agree

      With Uber, you get a company that knows it gets a free ride (no pun intended) on the people who sacrifice their personal vehicles' wear and tear that won't be fully covered by the money they receive,

      This is true to a certain extent. I don't live in a big city, and I drive for Uber only on the side, and only for quick cash when I need it. This "quick cash" is pretty much tax-free by the time I deduct expenses and $0.54 per mile using the IRS standard rate. The business losses I incur from driving for Uber will lower my taxable income from my "day job" and my LLC I have set up for consulting on the side. On the flip side, I don't think driving for Uber full-time is a sustainable long-term business

  • If only they had lost & found... (Score:3)

    by bazorg ( 911295 ) on Tuesday December 20, 2016 @09:29AM (#53521277)

    Too bad they are not a taxi company, they could ring the Lost & Found department.

  • One of the things that appeared during the last few bubbles were various non-GAAP measurements of revenue, profitability, etc. that startups published to show their progress. It's very interesting to see that they weren't able to use these tricks^Wtechniques to paper over the losses they're making trying to get to a massive market share. It makes sense -- they seem to have the public on their side willing to throw out all the taxi regulations in the name of disruption. If they can get all the rules repealed

  • Stupid question... (Score:3)

    by argStyopa ( 232550 ) on Tuesday December 20, 2016 @01:10PM (#53523281) Journal

    ...er, what does Uber (the corporation) actually spend money on to the tune of $800 million?

    It's not like they're running the cars themselves - the owners pay for that.

    I mean, their revenue trail seems pretty simple:
    Inflow:
    1) payments from users
    Outflow
    A) payments to drivers (should be entirely covered by 1, with some left over) and
    B) maintaining the app & corporate overhead (salaries, etc for non-revenue-generating positions like accountants)

    • I think the costs are similar to other tech startups - it's no different than the dotcom bubble:
      - They need a massive, slick marketing and social media campaign -- those don't come cheap because they're creative work. Look at how many millions of dollars companies waste on things like choosing colors and redesigning their logos.
      - To build marketing share, they have to sell below cost. Chase is offering $30 of free Uber rides to anyone who has one of their cards...they're not just giving that away.
      - Uber has

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