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Analyst: Uber loses $2 billion/year, customers only pay 41% of ride costs
- Thread starter aeolist
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Skellig Gra
Member
He's not getting paid a liveable wage.
I'd argue that's about what it's going to cost to make it worthwhile.
In a previous post I calculated it at about $10-14/hr to make a couple hundred bucks in profit per month leasing out your car for 8 hours per day, 30 days per month. Maybe I'm off somewhat, but it's not like renting driverless cars is going to be 1/10 of the cost.
TheAbsolution
Member
Because most people don't carry cash and want to tip me. So why shouldn't there be a mechanism to do so?
Also .75 a mile is hardly being paid tbh.
It's uber land in chicago.
I doubt it. I bet alot of this is because of the 'free rides' Uber gives out everytime they launch in a new city. And they launched in alot of cities in 2015.
psynergylover
Member
I'm in an Uber right now :/
Dash_Riprock
Member
No money going to the driver, everything goes to Uber directly I guess. Not sure myself since driverless cars I think will be insanely expensive the first few years as companies work all the kinks out.
Ozzy Onya A2Z
Member
One amendment to that...renewable energy based automated cars.
They're going to reduce recurring fuel costs, remove recurring driver costs and invest in up front technologies for the long game payoff with low-mid range recurring maintenance costs.
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
Self-driven cars will be drones, all collecting video data neerly 24/7 everywhere they go. That data will be sold to third parties to be analyzed by neural networks for various purposes.
There's huge amounts of money to make, they just need time.
There's huge amounts of money to make, they just need time.
That's actually really fucking smart. "While I'm at work, I'm going to make some extra cash using my car as an automated taxi"
Lil'DigiOp
Member
Sounds Great!
Now I can go home from work....
Nice, Someone shit on the seats again. Sweet.
don't forget the government surveillance
TheDrizzlerJ11
Member
No worries, just send your car to a Polish car wash and call yourself an uber free of charge! The perpetrator will be billed for your expenses.
The problem is, the actual competition is google/waze.
Though Uber has Otto, ran by ex-Google people, for the automated cars, which you see in San Francisco these days, Google has partnered with Chrysler...
Uber has the edge on the rideshare business model but Google has a massive edge on resources and self driving R&D. It will be easier for Google to catch up. Hopefully Uber will be able to maintain competition so that Google has reason to keep prices lower.
I was really hoping to get a job at Uber too. Next Tech bubble pop isn't going to be kind to me.
https://www.google.com/amp/www.wsj....e-1472584235?client=ms-android-hms-tmobile-us
Though Uber has Otto, ran by ex-Google people, for the automated cars, which you see in San Francisco these days, Google has partnered with Chrysler...
Uber has the edge on the rideshare business model but Google has a massive edge on resources and self driving R&D. It will be easier for Google to catch up. Hopefully Uber will be able to maintain competition so that Google has reason to keep prices lower.
I was really hoping to get a job at Uber too. Next Tech bubble pop isn't going to be kind to me.
https://www.google.com/amp/www.wsj....e-1472584235?client=ms-android-hms-tmobile-us
Sho_Nuff82
Member
Amazing that a company with virtually zero overhead for 99% of its employees can't break even.
Is the cost per ride simply from running the matchmaking servers and gps?
Is the cost per ride simply from running the matchmaking servers and gps?
echoshifting
Banned
There really needs to be. When I found out how little Uber drivers got paid I started keeping some small bills in my pocket for tipping...which is dumb. And obnoxious, as I rarely use cash for anything. It goes against the whole concept of ease of use. There needs to be a tipping option. Doesn't have to be in your face but the option should be there.
I think this it's weird that most of GAF seems willing to call a business genius that has zero assets and zero COGS but can't make money, based on the money they will one day make off of future technology that doesn't even exist yet.
Apparently the largest overhead is litigation
phatmike128
Member
They certainly aren't spending money on rider's account security or technical support. I've had a problem receiving other users email for 5 months and their support has not done anything.
During the week I took over the other users account and have access to their whole trip history, name, payment method. Quite a large privacy breach really, their response is basically ignoring it. Seems to be pretty common, so just know that Uber don't give a shit about their users.
Blogged about it here: http://micmon.com.au/2016/11/uber-account-security-issue-support-wants-to-ignore-it/
During the week I took over the other users account and have access to their whole trip history, name, payment method. Quite a large privacy breach really, their response is basically ignoring it. Seems to be pretty common, so just know that Uber don't give a shit about their users.
Blogged about it here: http://micmon.com.au/2016/11/uber-account-security-issue-support-wants-to-ignore-it/
eddievanclaylen
Member
Ive only been using Uber for a few months, but it costs me 1/3 of what a cab normally would.
Uber is the best!
Uber is the best!
People care about the brands of their taxis?
I think people just take the cheapest available.
sooperkool
Member
You guys really think people will buy a car at 40k or so and allow Uber to use it? Who's going to pay for the gas or electricity? And if Uber has these stations to clean and gas them or charge then then what's the point if only having part time use, the costs would be the same as owning? Hell, most of you wouldn't let your roommate drive your car now, let alone some corporation thats paying you peanuts
Well whats more expensive, upkeep and fuel for a car or a livable human salary. I would think that since people use part of their salary for general upkeep of a car a human salary is more. I would think you would still save money if you hire a few people to handle a lot of cars. This savings increases with self driving eletric vehicles
I have a feeling the guy who buys a $50,000 car is going to be more upset when he/she puts in a call for it, waits 30 minutes for it to show up only to have it show up filled with vomit, booze, and used condoms (if it shows up at all). Even if, best case scenario, the perps caught, that's still a pretty shitty day.
Well the IRS lets you deduct 57 cents per mile for business expenses. So as a rough estimate, that's what it costs to upkeep a car. Currently they pay drivers about 75 cents per mile. It's a savings but not a huge one.
Fuck that. I hate Uber the company, but one of the good things they're doing is getting rid of the idea that you need to tip a driver.
Now of course, they should be paying drivers a livable wage, but that should be part of the price, not a tip.
Tipping is not meant to be a salary replacement FFS.
Nikodemos
Member
Seriously. The price on the meter is the price I pay. Fuck tipping in all service industries. Fuck tipping out of existence.
Cow Mengde
Banned
Can they hold on for that long? Chances are, automated cars won't be good enough for another 10 years or so.
it costs over $33 to get from my job to home using uber (never actually did it, only priced it out). It's about a 20 min car trip.
If that's only 41% then fuck that if they start raising the price.
I may bitch and moan about public transit but damn if it doesn't save me a TON of money.
If that's only 41% then fuck that if they start raising the price.
I may bitch and moan about public transit but damn if it doesn't save me a TON of money.
Ecosystem.
I read recently that uber is trying to allow riders to directly go to one of the person in their contact who also probably used uber before.
Once you're entrenched in Uber ecosystem with whatsoever value added service they will provide in addition to their main service, it will be hard to look for alternative.
Convenience is the key, they have much more comprehensive data to facilitate all these unlike traditional taxi companies.
I think being on Gaming Gaf side and witnessing Xbox and PlayStation battle for dominance and supremacy in the current gen shapes my perspective somewhat.
Ultimately, most of us going to be on a platform / ecosystem our friends are at even if the other alternatives are there. Whether it's whatsapp, YouTube etc.
Ultimately, most of us going to be on a platform / ecosystem our friends are at even if the other alternatives are there. Whether it's whatsapp, YouTube etc.
With enough cars on the road doesn't it become a decent savings? And that would be just with a 1:1 switch, I think bigger incentives to switch to autonomous is that you arent limited by people who have a car AND want to use uber. I am sure in many cities you can have more cars than what was available during the willing human participant days
Chittagong
Gold Member
Despite their claims to the contray, Uber will inevitably need to IPO. No company in the world will acquire their business at its latest valuation with these metrics, and they have no path to cashflow positive.
Their investors need that liquidity, and the joke will be on joe public picking up the tab.
Uber will thus be a scheme for VCs to legally hoover in dumb retail money.
Their investors need that liquidity, and the joke will be on joe public picking up the tab.
Uber will thus be a scheme for VCs to legally hoover in dumb retail money.
milanbaros
Member?
Why do you want to bring tipping into the service? That would be the end of any hope of Uber upping their driver fees (which would increase supply and mean fewer rides for drivers but that is besides the point). If anything, introducing a tip option would eventually do away from Uber paying them anything at all.
Monocle
Member
Me too lol.
Say something nice to your Uber driver. It's hard out there.
A Fish Aficionado
I am going to make it through this year if it kills me
As a lyft driver I get usually $20+ an hour, but that's about 15℅ or so less than last year. And they allow tipping. Min ride used to $5 now it's $3.50.
They are taking an advantage, but I'd be worse working retail.
They are taking an advantage, but I'd be worse working retail.
I wonder how their foreign investments are going. Basically in the Nordic market they did 0 research about the legality before starting massive campaign and launching their operation here.
The consequence of which was UberPOP shutting down almost instantaneously because it was obvious from the start that what they did was against Swedish law. They had to pay all legal fees for the poor immigrant drivers who were tricked into driving from them.
Essentially the exact same process is happening in Denmark now since UberPOP is a clear violation of Danish law as well. Costly legal procedures are on their way in Finland and Norway as well.
From what I gather costly legal procedures are everywhere in continental Europe as well (Germany, France, Italy, Netherlands, Belgium etc. etc).
Must be tons of costs associated with basically failing in all these markets, which could in most cases be prevented by standard research before entering said market.
The consequence of which was UberPOP shutting down almost instantaneously because it was obvious from the start that what they did was against Swedish law. They had to pay all legal fees for the poor immigrant drivers who were tricked into driving from them.
Essentially the exact same process is happening in Denmark now since UberPOP is a clear violation of Danish law as well. Costly legal procedures are on their way in Finland and Norway as well.
From what I gather costly legal procedures are everywhere in continental Europe as well (Germany, France, Italy, Netherlands, Belgium etc. etc).
Must be tons of costs associated with basically failing in all these markets, which could in most cases be prevented by standard research before entering said market.
milanbaros
Member?
I think they do research before entering a market and gamble that lobbying for law change and then entering the market is more risky than just starting and then having the legal battles later. If they don't start a competitor will. Sometimes it backfires but for the most part it has worked.
poppabk
Cheeks Spread for Digital Only Future
Yeah, they are losing billions a year just maintaining an app, I don't see how maintaining massive fleets of automated cars helps them become profitable.
Looking at their p&l they'd need to at least double that just to break even.
And there are other costs that are not included in the 57 cents, like either cleaning up and detailing the cars daily/weekly or paying some amount of margin to the actual owners of the cars.
One of the reasons internet companies are popular with investors is that they rarely own much physical property or equipment, so their return on assets is huge. If Uber starts buying a worldwide fleet of cars they will have a terrible ROA, even if they manage to eke out some tiny profit.
I think the moral of the story is that the taxi business is the taxi business, no matter how you slice it. The same externalities that apply to taxis apply to Uber, and just because you have a fancy app doesn't make them go away.
Hari Seldon
Member
They are dumping a lot of money into tech which is great. However like someone else said, the big auto companies are also dumping money into tech and they have the factories to actually make the cars. All they need is an app and they can throttle Uber.
And_Gignac
Member
Technology is outpacing capitalism. Is breaking it.
Does snapchat and services alike deserve not to exist because they can't make a profit? Are people to be deprived of the experiences such apps offer just because they don't produce circulation of capital? Is a really interesting situation.
And driver less cars are frankly a generation away from becoming widespread accepted by people, and that's without considering all the legal and investing issues having their own cars would create for Uber. If that's uber's strategy, they are fucked.
onadesertedisland
Member
I could see Uber going under, but a taxi service or other investment firm snatching the brand and tech up for cheap, rolling it out to standard taxi services as an alternative cash flow for those services, and then when automated cars are readily available partnering with a manufacturer to sell Uber branded ride sharing cars.
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