London Banter - View Single Post

Robin9 · September 20th 16, 05:18 PM

Quote:

Originally Posted by Recliner[_3_]

Robin9 wrote:

'Recliner[_3_ Wrote:
;158092']Robin9 wrote:-

'Recliner[_3_ Wrote: -
;158072']Robin9 wrote:-

tim...;158053 Wrote: -
came into my in box via my linkedin account

https://www.linkedin.com/pulse/uber-...jared-carmel-2

posted without comment (for now)

tim

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Interesting. What surprises me is that Uber is deemed to be
losing money hand over fist. Not making enough profit to
provide investers with a satisfactory return is one thing.
Actually making a substantial loss is another. As Uber's
drivers are paid only a percentage of what customers are
charged, in London at least the business must show a profit
before overheads are included. Are Uber's overheads far
too high?-

Uber's overheads are famously low. Why do you think Uber is making a
profit
in London? It doesn't even make a profit in the US.

-

If Uber can't make a profit before overheads are included,
they must be grossly incompetent. Remember how the London
minicab trade works. The driver is deemed to be self-employed,
and pays for the car, insurance and petrol himself. The customer
pays Uber by credit card and Uber pays a small percentage to the
driver.

As Uber seems to have taken a huge share of the market away
from both Hackney cabs and minicabs, the number of jobs per
day must be in the thousands. Multiply that number of jobs by
an average net revenue of, say, five pounds and you arrive at a
gross income which must be more than the cost of a minimal
office set-up.-

Uber is investing in market growth. That's where the big money goes. So
it
subsidies drivers to get into new markets, and spends a lot on
marketing. I
dare say it spends a lot on political lobbying as well.

The really big losses were in China, but that's now stopped, so from
now
on, the losses should taper. But it's still fighting competitive battles
in
many markets, so bottom line profits will remain illusive.

It also seems to be spending a lot on driverless technologies, as it
expects these to be cheaper than drivers within a few years. But that
means
it will need to invest in the cars.

I'm discussing the situation in London, and there is no
indication that Uber are subsidising their drivers here. I am
sceptical that they do anywhere, and I'm not persuaded
merely because it is stated on the Internet.

I'd like someone who believes that Uber are subsidising their
drivers to explain in detail how this is done.

Google is your friend:

https://seattletransitblog.com/2016/...-of-subsidies/

http://www.financialexpress.com/indu...n-loss/358291/

https://www.bloomberg.com/view/artic...l-survive-uber

http://www.hybridcars.com/uber-loses...ke-their-toll/

http://www.forbes.com/sites/ellenhue.../#6fcde8ad2bd6

http://www.ibtimes.co.uk/ubers-hands...f-2016-1578115

http://www.forbes.com/sites/ellenhue.../#354f4fe08c57

https://www.washingtonpost.com/news/...y-defeat-lyft/

http://economictimes.indiatimes.com/...w/47600297.cms

Google is not my friend and none of those links will
change that.

Not one persuaded me that Uber are genuinely
subsidising their drivers anywhere, least of all in London.
It is clear from those links that the idea of Uber's losses
arising from subsidies to drivers came from their financial
director, Guatam Gupta, who seems to have made no
attempt to substantiate the contention. As is the way of
the Internet, those unquantified assertions have been
repeated by people who are trying to pretend that they
have done original research and are in possession of
confidential information.

There is also the issue of semantics. Some of those links
show people confused by the differences between a subsidy,
a guarantee and a loss-leading market strategy.