R.I.P. Uber?

[midwestfisherman]

Uber Loses $1.2 Billion by Q2 2016. I've never used Uber and really have never even thought about using it. How can a company sustain this kind of loss and still be in business?
https://www.linkedin.com/pulse/uber...BZ0nwrQ&fromEmail=fromEmail&ut=0Qeu0FTiSuu7o1

 

[IronWing]

Maybe Yahoo! will buy them.

 

[gorobei]

they are making the early play for self driving cars. their biggest costs right now are the drivers, they can lose money in exchange for market share and mapping data. once the self driving tech is mature they can ditch the drivers and suddenly have a massive profit margin.

if traditional taxi services have to eventually make the transition to selfdriving, the online summoning infrastructure lead uber will have by that time will put them in command of the market.

 

[Zstream]

they are making the early play for self driving cars. their biggest costs right now are the drivers, they can lose money in exchange for market share and mapping data. once the self driving tech is mature they can ditch the drivers and suddenly have a massive profit margin.

if traditional taxi services have to eventually make the transition to selfdriving, the online summoning infrastructure lead uber will have by that time will put them in command of the market.

You better be right, because Uber has about 8B in the bank and they lost more than an 1/8 of it already. They cannot continue with these loses or they will become bankrupt really quick. The route data is relatively useless, as it's a high level map of driving. Self driving cars must comply with traffic, lights, signs, construction etc... We're a good 10 -15 years away from reliable automated cars in the city.

 

[zinfamous]

They're hemorrhaging cash right now, but it's cause they are going all out into building infrastructure and tech, without bringing in significant revenue on top of that--but this is the result of one-time spends, so it probably looks far more alarming than it is.

It's certainly a huge risk, but they are playing the long game with operating fleets of self-driving cars in major metro areas around the globe. Uber hasn't ever been a fan of their human drivers and they'd like nothing more than to strike-off that line in their operating expenses.

^I think 10 years is the more conservative estimate of when that will be viable. I think between 5-8 years is most likely for cities to have significant adoption of automated transportation.

Uber is supposedly going public within the next year, so I guess it remains to be seen if the market analysts feel that the various sectors with tech development and municipal budgets are aligned properly within an acceptable timeframe for an Uber IPO to erase a significant chunk of these current losses.

 

[Ns1]

Don't forget the 1B they paid to the Chinese middle class. Another article I read called it a great redistribution of wealth.

 

[z1ggy]

Amazon hasn't returned a profitable yr/qrt yet I believe, and their stock is still valuable. As long as they don't run out of credit, they can still operate.

 

[Sonikku]

Uber Loses $1.2 Billion by Q2 2016. I've never used Uber and really have never even thought about using it. How can a company sustain this kind of loss and still be in business?
https://www.linkedin.com/pulse/uber...BZ0nwrQ&fromEmail=fromEmail&ut=0Qeu0FTiSuu7o1

Doesn't matter. Sony has posted billion dollar loses and they barely skip a beat.

 

[Ns1]

Amazon hasn't returned a profitable yr/qrt yet I believe, and their stock is still valuable. As long as they don't run out of credit, they can still operate.

wat

Even as operating expenses surged 25 percent during the quarter, revenue was even stronger. Sales reached $29.1 billion, up 28 percent, while Amazon swung to a profit of $513 million, from a loss of $57 million the year earlier. To put that figure in perspective, Amazon posted a profit of $596 million for all of 2015.

 

[z1ggy]

wat

Well, last I k new they hadn't. For many years they always operated at a loss. Looks like they finally pulled through! woooo Amazon.

 

[zinfamous]

wat

I think 2015 saw their first profitable quarter. Amazon and their lack of profitability has been a bit of a long-standing curiosity.

 

[Ns1]

I think 2015 saw their first profitable quarter. Amazon and their lack of profitability has been a bit of a long-standing curiosity.

evidently retail sales was only an excuse to build out their web services.

 

[zinfamous]

evidently retail sales was only an excuse to build out their web services.

Perhaps. I'm not sure that was their plan all along--but it certainly got to a point where they realized they had a ton of hardware that could be utilized for other purposes.

But spending cash to get those services rolling, on top of what was long considered the eternal money-losing service that is Prime, seem to be the primary culprits in keeping them red/even for so long. I don't think they were ever losing money in any significant amounts, just breaking even on costs for most of their years being public.

 

[IEC]

It's a big risk, but suckers investors are hoping for a big payday when self-driving cars cut out the biggest part of Uber's cost equation - the drivers.

 

[Ns1]

It's a big risk, but suckers investors are hoping for a big payday when self-driving cars cut out the biggest part of Uber's cost equation - the drivers.

Given that some (all?) states currently require a human behind the wheel "in case shit", seems like this is the long, long, long play.

 

[zinfamous]

Given that some (all?) states currently require a human behind the wheel "in case shit", seems like this is the long, long, long play.

The thing is that completely autonomous fleets are inevitable. So, probably a long play (but maybe not as far away as most would assume) but the key is being the primary player on the field when that happens. Uber is one of the few companies in position now--giant piles of money to burn, the right market segment with the right tech, the right location (easier relationships with Google, Tesla, Apple, Intel, AMD, nVidia, etc)-- where you can confidently place your bets on that primary winner.

 

[Imp]

Ask Tesla?

Some people out there believe Tesla is one giant ponzi scheme. I haven't bothered to research Tesla beyond two products so I don't know.

 

[monkeydelmagico]

Venture capital is pouring into Uber. They raised 3.5b in Q1. If anything, they need to spend faster and pony up the hottest IPO for 2016.

 

[zinfamous]

Venture capital is pouring into Uber. They raised 3.5b in Q1. If anything, they need to spend faster and pony up the hottest IPO for 2016.

Yeah, I think that is what people are betting on. Keep pumping cash into Uber because the bet is that they are going to be best-poised to own the sector which will be as big, if not bigger, than cellular communication.

 

[Midwayman]

Venture capital is pouring into Uber. They raised 3.5b in Q1. If anything, they need to spend faster and pony up the hottest IPO for 2016.

If nothing else I bet one of the automakers would love to scoop uber up.

 

[zinfamous]

If nothing else I bet one of the automakers would love to scoop uber up.

Can any of them afford a $60-80 billion purchase right now?

...I guess Toyota or Honda could, but my first thought swung around to a US manufacturer--and I think only Ford would be near that position right now, but I doubt that?

 

[Midwayman]

Can any of them afford a $60-80 billion purchase right now?

...I guess Toyota or Honda could, but my first thought swung around to a US manufacturer--and I think only Ford would be near that position right now, but I doubt that?

Not sure, but I was more thinking if they had trouble with investors. Uber won't disappear, it'll just changes hands. Ford specifically has voiced interest in having that sort of business.

 

[Charmonium]

Don't forget that Uber is int'l. We tend to think of companies that started here as mainly doing business here but in many cases, that couldn't be further from the truth.

And most countries are a lot more lax about safety regulations. Singapore has just permitted self driving taxis for example - http://www.sciencealert.com/singapore-just-became-the-first-country-to-have-self-driving-taxis

You can expect a lot of other Asian and African countries to follow suit.

 

[ImpulsE69]

How does a company like uber lose 1.2 billion?

 

[Ns1]

How does a company like uber lose 1.2 billion?

Subsidizing millions of rides