Uber profitability explanation

Dataminr #js3iwbx
May 11 19 Comments

Can someone explain to me why Uber isn't profitable?

They run an app. That's it. Their "employees" use their own vehicles and Uber takes billions off the top. I must be missing something big here.

Is Uber just investing so much in autonomous driving in a greedy/overly ambitious attempt to widen their margins that they simply choose not to make a profit? Or are they actually unable to make $$$?

Because as it stands I don't understand what the issue is. Someone please clarify.

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TOP 19 Comments
  • Amazon qwertyup
    1) Marketing and sales (not a fixed cost)
    2) Engineer and Management Salaries
    3) Reasearch
    May 11 5
    • Airbnb tvd4Gj
      ☝️this guy gets it. I laugh when I hear people say Uber has no path to profitability. Their revenue is actually positive. All they need is growth and efficiency to amortizate operating costs
      May 11
    • New zon2b
      How did you get this chart. I don’t see it in crunch base
      May 12
    • Facebook Mannw
      What goes under “general and administrative”? Why administrative so high?
      May 12
    • Amazon qwertyup
      Uber TC should be a chunk of it.
      Let's say an estimate of 2000 engineers (a 2016 number) times about 🌲 fiddy. 700M. The a very rough estimate but just to say it adds up quickly.
      May 12
    • Amazon qwertyup
      This is where I got the 2000 eng number from.

      Oct 2016.
      "They have over 6000 employees, 2000 of whom are engineers. Only a year and half a go there were just 200 engineers. Those engineers have produced over 1000 microservices which are stored in over 8000 git repositories"

      http://highscalability.com/blog/2016/10/12/lessons-learned-from-scaling-uber-to-2000-engineers-1000-ser.html
      May 12
  • Google LyLs67
    Driver incentives.. how do you think you get those such cheap on demand transportation. Investments on employees is not even accounted for yet as there loses don't include stock compensation
    May 11 3
    • Google FetaCheese
      GAAP accounting does include stock compensation as an expense so I’m not sure what your second sentence is talking about.
      May 11
    • Dataminr #js3iwbx
      OP
      So what's the difference between the fare the customer pays and what the driver sees?
      May 11
    • Thermo Fisher / Sales zeussical
      Hard to say. The SF Chronicle did an article on it on Friday, May 10 and the percent that a driver takes home varies with each ride.
      May 11
  • F5 Networks RRA
    They discount the rides to get people to use it. They offer promotions to get drivers involved. They pay insurance fees that most don't know about. They probably pay G for use of Maps. They pay for research via ATG and other projects.
    May 11 0
  • New
    👺👉🏿

    New

    PRE
    Google
    👺👉🏿 more
    It's the investing in all the other shit including autonomous driving you mentioned.

    Ever lil piece of it requires armies and armies of PMs, TPMs, SWEs, and mgrs and more mgrs. Each one them command 500K+ TC.
    May 11 0
  • Microsoft bsoshak
    What do you mean they only run an app ? Either they are using AWS for a backend and paying for server instances or they have their own data centers which also costs money.

    They have map licensing costs, R&D costs, driver incentive costs, discounted trip costs for users. Even people using credit cards to pay for small trips must be painful having to pay visa/MasterCard their share.
    May 11 3
    • Dataminr #js3iwbx
      OP
      Gotcha. Yeah main thing I'm missing there is the discounted trip and driver incentive costs.
      May 11
    • Microsoft bsoshak
      Lyft will be spending 300mill on AWS bills till 2021. Can you imagine Uber's bill ?
      May 11
    • Facebook Mannw
      After reading this thread I’ll go buy some Amazon stocks lol
      May 12
  • New zon2b
    But drivers are also not happy. They are not making much. Where is money going ? Apparently their salaries are best in the industry so it must be employees ? And R&D
    May 11 1
    • Microsoft FFSake
      The only happy drivers are those who don’t need money and do t for fun. None of Uber/Lyft is a job, it’s a gig with no guarantee of any salary whatsoever
      May 11
  • AT&T tEwh72
    There is a path to profitability BUT they are still overvalued. Needs to go down to reality.
    May 11 0