Follow Slashdot blog updates by subscribing to our blog RSS feed

 


Forgot your password?
Close
typodupeerror
×
Businesses The Almighty Buck Transportation

Uber Loses $900 Million In Second Quarter; Urged By Investors To Sell Off Self-Driving Division (bloomberg.com) 228

Posted by BeauHD from the money-pit dept.
Last week, Uber reported a second-quarter loss of $891 million, even though it brought in $2.8 billion in revenue. "While it's a 16 percent improvement from a year earlier, the loss follows a rare profit posted in the first quarter, thanks largely to the sale of overseas assets," reports Bloomberg. As a result, the company is being pressured by investors to sell its self-driving cars unit, which Uber is spending $125-200 million a quarter to maintain. From the report: Even after increased spending last quarter, revenue growth is slowing. Sales rose 63 percent to $2.8 billion in the second quarter compared with the same period last year. The rate in the first quarter was 70 percent. [Uber CEO Dara Khosrowshahi] Khosrowshahi is pouring large, undisclosed sums of money into food delivery, logistics and autonomous-car technology. The San Francisco-based company has said the food delivery business, Uber Eats, represents more than 10 percent of its gross bookings. Growth in that segment may be masking a slowdown in Uber's main business.
This discussion has been archived. No new comments can be posted.

Uber Loses $900 Million In Second Quarter; Urged By Investors To Sell Off Self-Driving Division More

Uber Loses $900 Million In Second Quarter; Urged By Investors To Sell Off Self-Driving Division

Comments Filter:

  • interesting (Score:4, Insightful)

    by hjf ( 703092 ) on Sunday August 19, 2018 @10:22AM (#57154348) Homepage

    On one hand, it's interesting how investors are really interested in companies bing a one trick pony. They are investing in a "ride sharing" (LOL) company. They are not interested in a company that does ride sharing AND self driving. If they wanted a self driving car company, they would invest in a self driving car company.

    On the other hand, it's interesting how companies refuse to be one trick ponies. Uber saw the writing on the wall. They know in a few years it will be all about self driving. They wan't to be ready for the change. Being first to game is the key.

    Basically you have to shake investors off as soon as you can. These people are interested in "money now" as opposed to "money later". This is why companies that operate at a loss all the time have little future.

    • Re:interesting (Score:5, Insightful)

      by phantomfive ( 622387 ) on Sunday August 19, 2018 @10:26AM (#57154366) Journal

      They are not interested in a company that does ride sharing AND self driving. If they wanted a self driving car company, they would invest in a self driving car company.

      I think part of the problem is they'd prefer to invest in a self-driving car company that doesn't kill people.

    • Doesn't need to invent the self driving car (Score:5, Insightful)

      by perpenso ( 1613749 ) on Sunday August 19, 2018 @10:34AM (#57154404)
      Uber does not need to be the inventor of the self driving car. They only need to be a user of the self driving car. And frankly they are behind in self-driving R&D and doing a crappy job at it as well.
      • so they can negotiate better deals. Otherwise the companies with the patents will shut Uber out of the market by making direct deals with the manufacturers ala Foxconn + Apple's relationship.
        • How could a self driving car inventor with patents prevent uber from buying cars? How much better a price on a car could uber get, and how many such deals would it cost to make back both the actual R&D and the opportunity costs of that money that went in their R&D?

      • Re: (Score:2)

        by Kjella ( 173770 )

        Uber does not need to be the inventor of the self driving car. They only need to be a user of the self driving car. And frankly they are behind in self-driving R&D and doing a crappy job at it as well.

        But what value does Uber add to that? Self-driving cars don't have to be recruited, there's no need for background checks, there won't be any drivers mistreating customers or driving recklessly, there's no pool of additional cars that can be called in through surge pricing, no car cares what rides it takes or where it ends up or how long it stays idle and the car will probably have its own insurance for traffic accidents. It's basically a clone army on wheels. There's also no quick scale-up, to increase you

        • Re: (Score:2)

          by q_e_t ( 5104099 )
          Just because a car is self-driving doesn't mean it necessarily turns up empty to pick someone up. There are still vectors for attack of the vulnerable, unfortunately.

    • Re: (Score:3, Insightful)

      by 110010001000 ( 697113 )
      I am pretty sure that smart people know that "self-driving" cars won't work as long as roads mix self-driving and human driving cars. It is a dead end and is wasting hundreds of millions of dollars.

    • Re: (Score:2)

      by Rob Y. ( 110975 )

      I think it's more that investors are interested in a company that eventually proves it can make a profit. I don't think they have a problem with Uber diversifying - they just want some indication that they're not going to lose their investment first.

      Which brings me to the point I originally intended to make. What does it say about our American version of venture Capitalism that, increasingly, the model seems to be to fund a company through years of losses until they eventually achieve monopoly or near-mon

    • Re: (Score:3)

      by sfcat ( 872532 )

      On one hand, it's interesting how investors are really interested in companies bing a one trick pony. They are investing in a "ride sharing" (LOL) company. They are not interested in a company that does ride sharing AND self driving. If they wanted a self driving car company, they would invest in a self driving car company.

      On the other hand, it's interesting how companies refuse to be one trick ponies. Uber saw the writing on the wall. They know in a few years it will be all about self driving. They wan't to be ready for the change. Being first to game is the key.

      Basically you have to shake investors off as soon as you can. These people are interested in "money now" as opposed to "money later". This is why companies that operate at a loss all the time have little future.

      I will do you one better. Uber isn't a viable business without self-driving cars. The entire model is to lose money until they can replace their drivers and then recoup those losses when their AVs becomes viable. These investors that want Uber to sell off the AV division basically don't understand any of this. And this is the type of action that is why being a public company is a double edged sword. On one hand you can sell your equity whenever you want, but on the other hand accountants and financial

    • Wait I thought that was the entire game plan. Invest a fortune in supplanting the existing taxi monopoly by hiring armies of poorly compensated drivers using their own vehicles and providing service far below cost. Then right around the time that's complete, their self-driving cars will be ready and bam, they lay off all their drivers, jack up the price, and have a large profit margin by operating their own self-driving fleet.
      Someone else said they didn't need to make self-driving cars, just purchase them

  • Fuck you, Dara, (Score:4, Insightful)

    by Type44Q ( 1233630 ) on Sunday August 19, 2018 @10:26AM (#57154360)

    Uber CEO Dara Khosrowshahi] Khosrowshahi is pouring large, undisclosed sums of money into food delivery, logistics and autonomous-car technology.

    "Throw shit at wall; see what sticks." -Unimaginative moron with finance degree

    It really amuses me to watch these VC's incompetently try to monetize every aspect of our fucking existence... they won't be happy until they're the middlemen making 25% on all our transactions coming and going.

    Fuck 'em with a huge stick... bigger even than they enjoy.

    • In the last few months, Uber bought a startup that rents electric bicycles, invested in another one that rents electric scooters and went to work on its own scooter-rental business.

      Those desperate, incompetent motherfuckers...

    • they won't be happy until they're the middlemen making 90% on all our transactions coming and going.

      FYFY.

      Seriously, this is why it drives me nuts to see so many anti-Union and anti-government folks. The mega corps & investor class have built large institutions to advance their interests. Meanwhile we hear in the working class are actively trying to tear down the ones that advanced ours.

  • Uber needs the self driving division (Score:5, Insightful)

    by rsilvergun ( 571051 ) on Sunday August 19, 2018 @10:30AM (#57154386)
    because long term somebody is going to crack down on their flagrant abuse of the term 'contractor' and eventually make them treat their employees as such. Their plan is to replace the employees before it becomes an issue. But even if they never build a self driving car they're going to need patents to defend themselves and eke out favorable license deals with..
    • The self driving division is a vanity project. Their R&D is behind others and they are doing a crappy job at it in general.

      Replacing drivers is absolutely the goal but they can do that with a self driving car that someone else invents.

      • I agree with rsilvergun. In the long term, practical self-driving cars will be the reality. The average consumer will happily get their ride through an app from Uber or Apple or Google or Lyft or Walmart or Ford -- a ride is a commodity to them. If Uber finds itself more than a year or so behind that footrace, it will be completely crushed. Crushed as in 99%-100% of their valuation will evaporate.

        At this point, it is conceivable that the race is a 10+ year marathon rather a 5 year jog. If the former, m

        • Self driving cars are likely to come from an existing auto manufacturer, uber won't be locked out of purchasing these. Apple, Google, whoever is not going to be able to tell their manufacturing partner who they can and cannot sell cars too.
    • Why do people assume that self-driving cars will EVER exist? It is like people just assume all things are possible. I guess that is what we get for generations being spoiled by progress based on the invention of the transistor.
      • Because they watch too many movies.
      • and the amount of money to be had by automating away 2 million driving jobs with an average pay of $50k/year (+ taxes, benefits, training, etc) is staggering.

        Self driving cars are this generation's moon landing. Ok, not quite ( it takes a government with the full support of the populace to put that much towards a goal) but it's the one thing every single nation is working towards. It will happen.

        • Re: (Score:2)

          by Mashiki ( 184564 )

          and the amount of money to be had by automating away 2 million driving jobs with an average pay of $50k/year (+ taxes, benefits, training, etc) is staggering.

          Your average cab driver makes nowhere near $50k and truck drivers have long moved over the $60k hurdle in the US and are moving on $70k, with some companies now offering flat $80k/year plus $0.55-0.78 per mile. At that rate clearing $100k USD driving a truck isn't only possible, it's downright easy.

          The real push for "self driving" vehicles like trucks is because there's such a huge shortage of drivers it's stupid. It's not just the US, but Canada as well. 10 years ago they were saying that it was the "be

          • Re: (Score:2)

            by q_e_t ( 5104099 )
            Is that $100k as an employee, or as an owner-operator? If the latter then presumably that comes with all sorts of costs to be paid out of that $100k? How does it stack up as take home after those costs compared to a standard employee in another industry?

          • Re: (Score:2)

            by djinn6 ( 1868030 )
            I took a brief look at truck-driving job ads, pay seems to top off at $75k if you're using their truck, and these are numbers offered by the company so you can expect it to be somewhat inflated.

            Moreover, all of them require previous experience so a newbie is going to have a hard time landing that first job. Now if they were really hurting for drivers, they'd offer training.

      • Re: (Score:2)

        by Rob Y. ( 110975 )

        I have no doubt that self-driving cars will SOMEDAY exist. Just not self-driving cars based on what passes for 'artificial intelligence' at the moment. Teaching a car to know the precise locations of street furniture and buildings - and arming it with algorithms that allow it to avoid crashing into things (as long as they've been trained to 'understand' the specific situations the algorithm handles, is a clever bit of data processing, but is not intelligence - artificial or otherwise.

        In the coming decades

      • Why do people assume that self-driving cars will EVER exist?

        Because humans are on average shitty drivers and there's nothing magical about driving that makes it perfectly possible for a human but not a machine.

      • Re: (Score:2)

        by jezwel ( 2451108 )
        One of my colleagues from another division sat opposite me for a few days last week, trying out a high-powered workstation (nothing super special, just a souped up workstation) that the hardware team are looking at. In that small amount time he cranked out first a CPU based then a much faster GPU algorithm for recognising and classifying road signs from our annually captured state road videos.

        We're also working on a trial that retro-fits cars with devices that will allow inter-car communication plus als

        • So because your colleague solved the easiest problem in self-driving, you conclude that the hardest problems are also solvable in the near future?
          When I was 13 I made a chatbot for AOL, that must mean GAI will be here in the nearish future too!

          Of course level 4 type automation, geofenced areas in good weather conditions, is right around the corner. But you're missing the leap it takes to get to level 5, anywhere in any condition, able to handle unexpected situations, with no human available. It's a lot

  • The question no one is asking (Score:5, Insightful)

    by MikeDataLink ( 536925 ) on Sunday August 19, 2018 @10:35AM (#57154410) Homepage Journal

    How is this even possible?

    Seriously. Look at their business model. They have a frakin' smartphone app. They don't own the cars or have employees and they take a 25% cut of every ride.

    Please tell me how they can spend $3Bn a year in the first place? What are they spending it on? Two college kids in dorm room could write the app and keep it updated.

    Mike

    • Well there is also the professional to design, maintain and operate the database on AWS. And the business development guy to sell rider's location data to facebook and others.

      • My two college kids in a dorm room is an obvious exaggeration. I was simply trying to make a light of the fact there is no way it costs $3bn a year to run Uber without a LOT of unnecessary spending.

      • ... I am also doubtful on those cost from Uber are on development or AWS cost. No, far more likely they are spending the crushing majority 90%+ of that on 1) marketing and 2) subsiding the price of share down to try to crush competition and 3) as a minor cost comapred from the previous 2 the self driving research.

    • Bribes. Bribes to politicians to either ignore their flagrant violations of laws and regulations or to make sure same laws are changed.

  • Day traders,... (Score:3)

    by Archfeld ( 6757 ) <treboreel@live.com> on Sunday August 19, 2018 @10:39AM (#57154440) Journal

    The short term stock investors seeking instant profit sure make it difficult for a company to do any sort of long term growth plan or invest in anything for a potential future.

    • The short term stock investors seeking instant profit sure make it difficult for a company to do any sort of long term growth plan or invest in anything for a potential future.

      Well the President is working on that problem, he wants to get rid of quarterly SEC filings. ;-)

    • Uber was founded in 2009. It's been 9 years, and there is still no path to profitability in sight. They had their time as a "startup" to grow and get established; at what point do they move from being a growing startup to being a money-losing operation?
    • You realize that Uber isn't even a publicly traded company yet?

  • Logistics (Score:2, Interesting)

    by fluffernutter ( 1411889 )
    Whether or not anyone can get self driving to work, the logistical problems are the real killer. Who is responsible if the car makes a mistake? Not the owner, because they aren't controlling it. Who will insurance companies charge for liability insurance? When there is a construction site, who pays for the time to set it up so that autonomous cars can navigate it? I hope not tax payers. Who is responsible if they make a mistake? How do you stop people from simply walking in front of them whenever the

    • Re: (Score:2)

      by hey! ( 33014 )

      It's more complicated if you insist on a solution that makes sense a priori, or at least clearly makes more sense a priori than any other solution possibly could.

      What human beings do when faced with situations like this is they adopt a set of largely obvious conventions that seem objectively correct and more sensible after we get used to them. That's pretty much how everything that is governed by law works. Something like private property seems as natural a part of universe as gravity or momentum, but if

      • As a tax payer I'm afraid I must insist that I know how it is going to work before hand, before cities are forced to close these gaps with my money.

        • Re: (Score:2)

          by hey! ( 33014 )

          Sure, we'd all like to know that everything is going to work out perfectly. I'm just saying we have a consistent habit of learning to live with much less than perfection.

          I don't think we'll solve the problems intrinsic to self-driving cars, I think we'll learn to live with them, just like we've learned to live with all the problems highways create. We won't see those problems as the consequence of choice, although they will be. We'll see them as just the way things are.

          I have no doubt self-driving cars ar

          • So what you are saying is that self driving cars will cause more problems for people. In that case I don't agree with them at all, until someone can demonstrate one that is MUCH safer than humans.

            • Re: (Score:2)

              by hey! ( 33014 )

              Yep, but they'll solve problems too. Most things are like that.

              • As long as they don't create problems for people who never asked for autonomous driving. I sure don't care how long it takes.

                • Re: (Score:2)

                  by hey! ( 33014 )

                  I sympathize with your position, but in all probability it will cause problems for people who not only never asked for autonomous driving, because that's how the world works. If everything that caused problems for people who didn't ask for them didn't happen, then practically nothing would happen. Cars create problems for people who never drive; bike lanes and mass transit create problems for people who prefer to drive.

                  • Re: (Score:2)

                    by q_e_t ( 5104099 )
                    Cars create problems for those who do drive (pollution, accidents cause by others, accidents cause by cars when a driver isn't driving, etc.), as well as benefits (personal mobility, employment, economic activity, logistics)

                • Re: (Score:2)

                  by q_e_t ( 5104099 )

                  Almost all things that happen in the world create an issue for someone who didn't ask for it. Not everyone can have a veto over everything they don't like, although I am all for the maximum freedoms given the need for others to exercise their freedoms, everyone to get along, and to have a functioning economy. Where the dividing line is between those is the difference between most parties in Western democracies.

    • Re: (Score:2)

      by Kjella ( 173770 )

      Whether or not anyone can get self driving to work, the logistical problems are the real killer. Who is responsible if the car makes a mistake? Not the owner, because they aren't controlling it. Who will insurance companies charge for liability insurance? When there is a construction site, who pays for the time to set it up so that autonomous cars can navigate it? I hope not tax payers. Who is responsible if they make a mistake? How do you stop people from simply walking in front of them whenever they want, knowing they will stop? Lots of things to figure out.

      But it's just that, decisions.

      Who is responsible if the car makes a mistake? Not the owner, because they aren't controlling it.

      Legally, probably the car company as a condition of their "license" to drive.

      Who will insurance companies charge for liability insurance?

      Even if somebody else is driving today the owner must have insurance, then the insurance company goes after whoever is at fault.

      When there is a construction site, who pays for the time to set it up so that autonomous cars can navigate it?

      There's probably rules for how a construction site should be marked today. That's what autonomous cars have to deal with.

      Who is responsible if they make a mistake?

      Who is responsible now? Lots of people cause traffic jams, I'd say mostly nobody. Like if you have an accident and block the road those blocked don't get pa

      • Even if somebody else is driving today the owner must have insurance, then the insurance company goes after whoever is at fault.

        Because it is within the power of the person driving to control the vehicle, so the owner must ensure the person is reliable. If no one is actually controlling the car, you have a different situation. It's like riding a bus or taxi all the time. You don't insure a bus to ride on it.

        There's probably rules for how a construction site should be marked today

        Yes there is, but none of it involves mapping an exact route digitally on a map so cars don't go bombing through the construction site. Cones and blockades and signs need to be set up a certain way, but will what they do toda

  • Contempt for software has its price (Score:4, Informative)

    by hcs_$reboot ( 1536101 ) on Sunday August 19, 2018 @10:47AM (#57154480)
    Bad quality software is everywhere nowadays ; it's only when faulty software kills that people realize programming requires skills.
  • Repeat after me: this business has never been profitable.

Slashdot Top Deals

You know you've landed gear-up when it takes full power to taxi.

Close