tim... wrote:

"Recliner" wrote in message
...
On Mon, 19 Sep 2016 12:19:15 +0100, "tim..."
wrote:


"Recliner" wrote in message
...
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.

Uber makes no attempt to make a profit. It is pouring investment funds
into
growth, with the aim of a mega IPO.

"Uber's losses and revenue have generally grown in lockstep as the
company's global ambitions have expanded. Uber has lost money quarter
after
quarter. In 2015, Uber lost at least $2 billion before interest, taxes,
depreciation and amortization. Uber, which is seven years old, has lost
at
least $4 billion in the history of the company."

"Subsidies for Uber's drivers are responsible for the majority of the
company's losses globally"

And now on earth do Uber spend so much on subsidising drivers?

The drivers pay all of the costs of running the car and Uber pay them a
percentage of the fare to cover those costs and provide an income for the
driver (some argue, a pittance of an income). All Uber pay for is the
advertising and the Hailing/tracking "technology".

Read what I quoted:
"Subsidies for Uber's drivers are responsible for the majority of the
company's losses globally"

I read that bit - I saw it in the article as well

I am questioning what these subsidies actually are.

It is, of course, the sunk costs of investing in new technology that
causes
starts ups to report losses in the initial years of operation that need to
be recouped later. But much of it is a one off cost that doesn't re-occur
year after year, and in any case Uber's technology is pretty simple.
Apart
from having to add servers to their cluster (whatever the technical term
really is) as demand grows, what additional technology costs do they have
in
year 2, 3 4 ...?

Nobody said they were technology costs. As the reports say, they're
driver subsidies.

but what are they?

It's the same basic app(s) that need to be downloaded - either by users or
by drivers (OK it needs translating, but if that is costing them more than
a
couple of grand per language they have been ripped off), and the
infrastructure that it is downloaded over, and used on, is provided by
someone else (with access costs paid by the user/driver)

Unless ... Uber are somehow paying for the cars up front for drivers who
can't afford to fund them themselves?

No. But they overpay drivers in most start-up cities, or guarantee a
level of business, whether or not it's achieved.

It still seems a lot

I found an article on the roll out of Uber in London

The guy who was responsible for finding new drivers had a budget of 50K per
week to subsidise new drivers

that 2.5 million per year

that's a mile away from 2 billion

if they are paying that much to roll out in 1000 new cities a year I suggest
that their plans are overly ambitious

That may well be so.



If there are, and this is the cause of the losses, then they are
constructing the accounting for the transaction wrongly. The value of the
cars (or the outstanding loans) should remain in the P&L as a capital item
and offset any loss in the accounts cause by spending the cash on the
cars.

All that leaves is the adverting costs as they roll out to new countries

No


but 2 billion per year on advertising - really!

No. Read the quoted report.

I did

it gave no indication as to what they were paying for.

I suggest you read the reports again and look for the word 'China'.


Perhaps this is some taxation game that they are playing reporting these
losses?

No, but those losses will be carried forward to offset future profits
when they arrive.


Do you *really* think Uber's business is that simple?

Is how simple

yes I do

I look forward to your next management textbook. It should be refreshingly
short.


spending billions on trying to win a market of millions is just silly

Ah well, you'd better sell your well-informed investment advice to the
billionaire funds investing in Uber. You clearly understand this market
much better than they do.

"Recliner" wrote in message
...
tim... wrote:

Perhaps this is some taxation game that they are playing reporting
these
losses?

No, but those losses will be carried forward to offset future profits
when they arrive.


Do you *really* think Uber's business is that simple?

Is how simple

yes I do

I look forward to your next management textbook. It should be refreshingly
short.


spending billions on trying to win a market of millions is just silly

Ah well, you'd better sell your well-informed investment advice to the
billionaire funds investing in Uber. You clearly understand this market
much better than they do.

Everything that I did find when trying to research this shows that
everything in the Garden is not rosy for Uber

I suspect that the backers will get cold feet soon

tim

On Mon, 19 Sep 2016 19:25:51 +0100, "tim..."
wrote:


"Recliner" wrote in message
...
tim... wrote:

Perhaps this is some taxation game that they are playing reporting
these
losses?

No, but those losses will be carried forward to offset future profits
when they arrive.


Do you *really* think Uber's business is that simple?

Is how simple

yes I do

I look forward to your next management textbook. It should be refreshingly
short.


spending billions on trying to win a market of millions is just silly

Ah well, you'd better sell your well-informed investment advice to the
billionaire funds investing in Uber. You clearly understand this market
much better than they do.

Everything that I did find when trying to research this shows that
everything in the Garden is not rosy for Uber

I think that was your view before doing any research.


I suspect that the backers will get cold feet soon

Perhaps they will, but not for the reasons you think.

http://www.cnbc.com/2016/06/08/ubers...oundation.html

On Tue, 20 Sep 2016 13:10:55 +0100
Recliner wrote:
Perhaps they will, but not for the reasons you think.

http://www.cnbc.com/2016/06/08/ubers...e-on-shaky-fou
dation.html

Like the majority of the current crop of silicon valley start ups then. I'm
amazed the bubble has lasted this long. There must be a boatload of gullible
rich idiots out there bankrolling them all.

--
Spud

wrote:
On Tue, 20 Sep 2016 13:10:55 +0100
Recliner wrote:
Perhaps they will, but not for the reasons you think.

http://www.cnbc.com/2016/06/08/ubers...e-on-shaky-fou
dation.html

Like the majority of the current crop of silicon valley start ups then. I'm
amazed the bubble has lasted this long. There must be a boatload of gullible
rich idiots out there bankrolling them all.

Yup, I can never understand the huge valuations put on high profile SV
startups. But sometimes they actually prove they can eventually make real
profits (eg, Facebook), and in many other cases they exit on a decent
valuation. So the early investors often make a very good multiple, which
pays for the others that don't make it.

With Uber, the investors aren't betting on the current business model, but
on an imagined future where people don't own their own cars, but rent
transport as they need it. Uber's plan is to dominate that market, and the
VCs are prepared to fund it to do so.

On Tue, 20 Sep 2016 14:08:48 -0000 (UTC)
Recliner wrote:
With Uber, the investors aren't betting on the current business model, but
on an imagined future where people don't own their own cars, but rent
transport as they need it. Uber's plan is to dominate that market, and the
VCs are prepared to fund it to do so.

Only people who only ever lived in a city flat would think renting a car on
an as-you-need-it basis is a viable model for family life out in the sticks.
If taxis and rental cars were the solution to every car problem then there
wouldn't be 15 million private cars in the UK.

Equally stupid is the rent your self driving car out when you're not using it
idea that I've seen put forward. Oh sure, I'll just let any old tom, dick or
harriett use the 2nd largest capital investment in my life as they see fit.
Vomit on the carpet and everything nicked from the boot is just what I want
the next day. Honestly , some of these californian techies live on another
planet. And I speak as a techie.

--
Spud

On Tue, Sep 20, 2016 at 03:17:06PM +0000, d wrote:
On Tue, 20 Sep 2016 14:08:48 -0000 (UTC)
Recliner wrote:
With Uber, the investors aren't betting on the current business model, but
on an imagined future where people don't own their own cars, but rent
transport as they need it. Uber's plan is to dominate that market, and the
VCs are prepared to fund it to do so.
Only people who only ever lived in a city flat would think renting a car on
an as-you-need-it basis is a viable model for family life out in the sticks.

There is an implicit "most" between "where" and "people".

Obviously there will still be a small market for people with their own
cars, just like there is a small market today for people who use horses,
and people who generate their own electricity, and people who insist on
speaking Welsh. If you want to make lots of money you can do it by
concentrating on and pandering to little minorities like that. But if
you want to make a vast amount of money you just don't care about those
minorities, at least when you're starting out.

--
David Cantrell | Reality Engineer, Ministry of Information

All children should be aptitude-tested at an early age and,
if their main or only aptitude is for marketing, drowned.

wrote in message ...
On Tue, 20 Sep 2016 13:10:55 +0100
Recliner wrote:
Perhaps they will, but not for the reasons you think.

http://www.cnbc.com/2016/06/08/ubers...e-on-shaky-fou
dation.html

Like the majority of the current crop of silicon valley start ups then.
I'm
amazed the bubble has lasted this long. There must be a boatload of
gullible
rich idiots out there bankrolling them all.

with bank interest rate down at zero, there's a lot of money sloshing around
looking for a home

Early investors don't even need to believe in the long term prospects for
the company, all they need to believe in is the bigger fool coming along
later.

Just look at the absurd valuation of Ocardo against its piddly market share,
its piddly profit per delivery and it non-existent growth potential now that
every man and his dog supermarket has a competing operation (with lower
fulfilment costs)

tim

"Recliner" wrote in message
...
On Mon, 19 Sep 2016 19:25:51 +0100, "tim..."
wrote:


"Recliner" wrote in message
...
tim... wrote:

Perhaps this is some taxation game that they are playing reporting
these
losses?

No, but those losses will be carried forward to offset future profits
when they arrive.


Do you *really* think Uber's business is that simple?

Is how simple

yes I do

I look forward to your next management textbook. It should be
refreshingly
short.


spending billions on trying to win a market of millions is just silly

Ah well, you'd better sell your well-informed investment advice to the
billionaire funds investing in Uber. You clearly understand this market
much better than they do.

Everything that I did find when trying to research this shows that
everything in the Garden is not rosy for Uber

I think that was your view before doing any research.

Nope

I thought that it had questionable business practices, but I (sadly) also
thought that it was destined to take over the world



I suspect that the backers will get cold feet soon

Perhaps they will, but not for the reasons you think.

http://www.cnbc.com/2016/06/08/ubers...oundation.html

ISTR that I made some of these comments before (about its MO being easy to
replicate)

I also don't recognise the basic premise

"They integrated a mostly unused stockpile of personal automobiles"

Um? Nhow many people do you know with a nearly new Mercedes S class (the
mandated type of car for early adopters) sitting in the garage unused whilst
they sit in the lounge twiddling their thumbs.

The average underemployed person who considers being a cabbie to make ends
meet has a beat up old Sierra (at best) in the garage

tim