OT: Uber expects to lose $3 billion this year

[rutgersdave]

https://www.bloomberg.com/news/arti...n-third-quarter-on-1-7-billion-in-net-revenue

Uber is considered a great company but I don't see it being Amazon where they don't have to justify making a profit. I would be wary of buying this stock when it actually goes public. I guess when they actually have a monopoly in the area, they can raise prices to make a profit or getting rid of the drivers will be a game changer.

 

[RutgersRaRa]

Getting rid of the drivers will require such a large infusion of capital and maintenance costs that it isn't viable for them anytime soon. And that valuation at this juncture is nuts. Without raising prices they will be dead in the water. You can only survive so long on creative cash flow and occasional infusions. Eventually it runs out, you go into bankruptcy, and someone buys you for 10 cents on the dollar. They then make money. First-mover advantage can be real, but not uncommonly it's the second owner who makes money because they buy you cheap and don't take on your debt.

 

[rutgersal]

I'll buy the stock because they have first mover advantage and are now embedded in lots of places. I use the service myself and love it. Don't care about profits for now.

 

[krup]

I'll buy the stock because they have first mover advantage and are now embedded in lots of places. I use the service myself and love it. Don't care about profits for now.

How are they embedded? What are the barriers to entry for new competitors? If a Google that is spending billions on autonomous vehicle development wants to compete will they be scared away by Uber's technology? I don't see the huge "first mover advantage" in this space.

 

[Upstream]

I guess it really depends on why they are losing money.

According to the article, Uber booked $5.4 billion last quarter and earned $1.7 billion in net revenue (after drivers were paid). I'd be concerned if their losses are mostly because the $1.7 B doesn't cover what it costs to operate the company. But I'd be less concerned if the losses were because the company is investing a lot of money into driverless technology, or if these were paper losses covering depreciation on the costs to start up the company.

 

[Upstream]

How are they embedded? What are the barriers to entry for new competitors? If a Google that is spending billions on autonomous vehicle development wants to compete will they be scared away by Uber's technology? I don't see the huge "first mover advantage" in this space.

The barrier to entry for new companies is they need to get drivers. A new company can't compete with Uber if they don't have enough drivers and people have to wait too long for a ride.

When truly driverless cars become a reality, the barrier to entry is the capital cost of purchasing and operating enough driverless cars. (Of course, if Uber goes to a driverless model, then Lyft can just hire Uber drivers and potentially be able to offer faster service with more cars on the road.)

 

[Abro1975]

Our family used Uber in Orlando instead of renting a car. It worked out great and saved money. I only use it now if going to a party where I will be drinking and wife won't be along. Airport too (not often). Haven't tried Lyft yet, I guess their main competition. I have never waited longer than 10 minutes, either in NJ or Florida.

Not sure if it's a good investment for an IPO, but as a consumer I recommend it.

 

[vkj91]

The barrier to entry for new companies is they need to get drivers. A new company can't compete with Uber if they don't have enough drivers and people have to wait too long for a ride.

When truly driverless cars become a reality, the barrier to entry is the capital cost of purchasing and operating enough driverless cars. (Of course, if Uber goes to a driverless model, then Lyft can just hire Uber drivers and potentially be able to offer faster service with more cars on the road.)

Most uber drivers also drive for lyft

 

[rutgersal]

How are they embedded? What are the barriers to entry for new competitors? If a Google that is spending billions on autonomous vehicle development wants to compete will they be scared away by Uber's technology? I don't see the huge "first mover advantage" in this space.

A service of this sort is a commodity, and I don't see the competitive advantage that a Google can provide over uber. Their advantage is their network of millions of drivers and users that are already in place. They are embedded in my mind and millions of others, worldwide, including India and South Korea, when seeking a service of this sort. Look at their revenue growth for proof. When someone says, "I'm going to uber over to to Newark airport", people for the most part, know what you're talking about. they are to taxi service what Xerox was to photocopying for many.

Google is more interested in developing the software that will underpin tomorrow's autonomous vehicles, than it is in becoming the number 1 taxi service. autonomous vehicle utilization is so far away, it's not even a consideration at this time. I can appreciate the complexity of the algorithms that have to be developed to make this a reality. And even when it does get introduced it will be very limited.

I just don't see a credible competitor to uber at this time.

 

[eceres]

Uber will not take on a huge capital cost with driverless cars, they will franchise. Otherwise they need parking and such like zip car.

Franchise model will be buy a car, house it, they pay your car loan and then give you extra profits based on a share just like today. At first it will be random people, but funded local companies will take over with larger fleet of cars in rented currently empty parking lots of abandoned buildings.

Zipcar may become a direct competitor when their cars can drive to you.

 

[Upstream]

Most uber drivers also drive for lyft

Do they have both apps running simultaneously? Do they end up driving for whichever company gets them a fare first? Or do they have to decide which app to keep active and switch to the other app if they don't get a fare.

 

[S_Janowski]

Do they have both apps running simultaneously? Do they end up driving for whichever company gets them a fare first? Or do they have to decide which app to keep active and switch to the other app if they don't get a fare.

They can have both running and once when they're waiting for a fare and switch back and forth rider after rider.

 

[rutgersdave]

When they actually have the driverless car, why wouldn't the car companies start their own business and start their own app? Any group of individual or a large company might decides to purchase 100-300 cars for their own use in a certain city. I really don't see the barrier of entry.

I know one or two car companies have invested in Uber, Lyft and Zipcar.

 

[Upstream]

They can have both running and once when they're waiting for a fare and switch back and forth rider after rider.

Then there really isn't a barrier to entry. If a third company enters the market, drivers can just have 3 apps running and riders can check 3 apps for fastest times and cheapest rates.

Heck, someone might even create an app that manages all the taxi apps automatically for drivers and riders.

 

[KingHigh]

I read an article recently about how young adults are not even bothering to get their driver's licenses because using Uber is all they need to get around, and it turns out to be more economical for most people that age. It's hard for us non Millennials to grasp that notion, but I've also heard young Professionals in my industry talk about how there's no need for them to have Office Space and everything can be done remotely these days.

Evaluating companies for potential investment value requires not just a study of their bottom line but a consideration of economic and social conditions when we were talking about a company as revolutionary as Uber. On the other hand, I cannot remember any company of this magnitude that is in so much danger of being wiped out but a single stroke of the legislators pen.

 

[vkj91]

I read an article recently about how young adults are not even bothering to get their driver's licenses because using Uber is all they need to get around, and it turns out to be more economical for most people that age. It's hard for us non Millennials to grasp that notion, but I've also heard young Professionals in my industry talk about how there's no need for them to have Office Space and everything can be done remotely these days.

Evaluating companies for potential investment value requires not just a study of their bottom line but a consideration of economic and social conditions when we were talking about a company as revolutionary as Uber. On the other hand, I cannot remember any company of this magnitude that is in so much danger of being wiped out but a single stroke of the legislators pen.

I have two nephews and a cousin that live in a major city and didn't bother to get their licenses until their 20's.

 

[vkj91]

Do they have both apps running simultaneously? Do they end up driving for whichever company gets them a fare first? Or do they have to decide which app to keep active and switch to the other app if they don't get a fare.

Both running. My understanding is they prefer lyft because it pays them more and recommends tips on the app

 

[RUskoolie]

I would drop 5 figures on Uber stock if it went public.

 

[mildone]

On the other hand, I cannot remember any company of this magnitude that is in so much danger of being wiped out but a single stroke of the legislators pen.

And when companies, like Uber, use technology to kill of most of jobs they used to provide, there will be even less incentive for politicians to avoid legislation that wipes those companies out.

Robots make the cars, software drives the cars. Politicians will be the only people left with jobs.

Only jobs left will be in hookers and blow sales.

 

[vkj91]

And when companies, like Uber, use technology to kill of most of jobs they used to provide, there will be even less incentive for politicians to avoid legislation that wipes those companies out.

Robots make the cars, software drives the cars. Politicians will be the only people left with jobs.

Only jobs left will be in hookers and blow sales.

And you can do both in the driverless car without her getting shy about it

 

[KingHigh]

And when companies, like Uber, use technology to kill of most of jobs they used to provide, there will be even less incentive for politicians to avoid legislation that wipes those companies out.

Robots make the cars, software drives the cars. Politicians will be the only people left with jobs.

Only jobs left will be in hookers and blow sales.

The great very many jobs have been rendered obsolete due to improving technology. Most likely a huge percentage of every job ever created has been rendered obsolete over the course of human history. Why should these sorts of jobs required to be kept static? We have to continue to evolve.

 

[wheezer]

Both running. My understanding is they prefer lyft because it pays them more and recommends tips on the app

------------------
have not used Uber or Lyft at all till a week ago.....We tried to book Uber a day ahead and I guess you cannot do that, so my nephew booked Lyft, which accepts
book aheads.

anyway, it was down in Fla..... a 25 minute ride to the airport for 3 people was $19 without a tip
which could be added..... on the surface of it all, this seems damn cheap...

If I was to book a regular car service from Montclair to Newark airport the cheapest
ride for 3 people would be about 65 dollars with tip, and this would be the best I could find, most being closer to 80 or 90 dollars..... the travel time is also about
20 minutes

the point being, I think Uber and/or Lyft probably cannot sustain such low
fares forever...... they probably have to up them a bit somewhere along the line, not up to the car service amounts....

Uber/Lyft would still have a significant advantage over your limo and other competition.

 

[RU4Real]

A service of this sort is a commodity, and I don't see the competitive advantage that a Google can provide over uber. Their advantage is their network of millions of drivers and users that are already in place. They are embedded in my mind and millions of others, worldwide, including India and South Korea, when seeking a service of this sort. Look at their revenue growth for proof. When someone says, "I'm going to uber over to to Newark airport", people for the most part, know what you're talking about. they are to taxi service what Xerox was to photocopying for many.

Google is more interested in developing the software that will underpin tomorrow's autonomous vehicles, than it is in becoming the number 1 taxi service. autonomous vehicle utilization is so far away, it's not even a consideration at this time. I can appreciate the complexity of the algorithms that have to be developed to make this a reality. And even when it does get introduced it will be very limited.

I just don't see a credible competitor to uber at this time.

You don't see an advantage for Google?

I do. A clear one. Google has petabytes of aggregated user data and can derive travel habits for large groups of people. This would allow them to focus the application of driver / equipment resources to places - and time - as needed.

 

[patk89]

Love the Lyft commercials, very funny...might have to try them as I only have Uber loaded.

 

[LC-88]

On the other hand, I cannot remember any company of this magnitude that is in so much danger of being wiped out but a single stroke of the legislators pen.

This is probably where their investment monies are going.

 

[vkj91]

------------------
have not used Uber or Lyft at all till a week ago.....We tried to book Uber a day ahead and I guess you cannot do that, so my nephew booked Lyft, which accepts
book aheads.

anyway, it was down in Fla..... a 25 minute ride to the airport for 3 people was $19 without a tip
which could be added..... on the surface of it all, this seems damn cheap...

If I was to book a regular car service from Montclair to Newark airport the cheapest
ride for 3 people would be about 65 dollars with tip, and this would be the best I could find, most being closer to 80 or 90 dollars..... the travel time is also about
20 minutes

the point being, I think Uber and/or Lyft probably cannot sustain such low
fares forever...... they probably have to up them a bit somewhere along the line, not up to the car service amounts....

Uber/Lyft would still have a significant advantage over your limo and other competition.

As someone posted above they did a few billion in revenue this quarter. I don't thin revenue is the issue. They should t need to raise fares because they have unlimited pool of drivers. Wait until you ride during a surge time. Then you won't be suggesting a fare hike.

 

[KingHigh]

There's really no way they could be down 3 billion dollars. They have a ton of Revenue and what the hell are they even spending any billion dollars on? Ano app and some commercials. If they are losing that kind of money that means they are putting huge dollars into research and development which can only lead to exciting things in the future. I'll probably put some money into it.

 

[huskersalways]

I like Uber and Lyft except they like to use some dynamic type pricing in Lincoln. I can get a ride from the apartment in the morning before the games for about $9.00+ tip. After the game unless you wait till midnight it will cost $60.00 for the same ride. It's cheaper than jail but still pisses me off. Ha.

Cured the problem for the future. Bought condo in Haymarket. Walk everywhere.

 

[vkj91]

I like Uber and Lyft except they like to use some dynamic type pricing in Lincoln. I can get a ride from the apartment in the morning before the games for about $9.00+ tip. After the game unless you wait till midnight it will cost $60.00 for the same ride. It's cheaper than jail but still pisses me off. Ha.

Cured the problem for the future. Bought condo in Haymarket. Walk everywhere.

Last year to cost me $280 to get to Fiesta Bowl from my hotel. Cost me 60$ to get home. Renting a car and not drinking this year.

 

[mildone]

The great very many jobs have been rendered obsolete due to improving technology. Most likely a huge percentage of every job ever created has been rendered obsolete over the course of human history. Why should these sorts of jobs required to be kept static? We have to continue to evolve.

I'm not complaining or saying jobs should be kept static. But I also do not believe this is a case where there will be new jobs to replace the old jobs. The jobs are just going to go away as we automate everything.

 

[mildone]

If they are losing that kind of money that means they are putting huge dollars into research and development which can only lead to exciting things in the future.

Or... they could be spending it all on hookers and blow. I'm just saying. :D

 

[RUfinal4]

Uber claims to be a company for independent drivers but I see them having a future in a couple of different areas:

1. independent drivers in non-city areas (many suburban towns don't have good or affordable taxi services). These individual drivers will need to meet the local laws / rules and have proper insurance.

2. software that licensed taxi services use to get fares as a ride hailing software product. Many taxi drivers are on call in towns and just sit next to the train station waiting for fares. They can easily use Uber when they have slow periods to pick up more fares (at the uber rate). This also gets Uber out of the fight they have with many cities where they have under-insured drivers or the taxi companies see competition.

3. Technology company that develops new ride sharing technology (ie. self driving cars, buses, and other tech options).

for 1 and 2 above consider this situation:
someone in central NJ needs a ride to the airport. The local taxi / car service company quotes $100 1 way knowing they are the only car service company in the town and have an unofficial agreement with the e services in the next door towns around airport rates. The customer figures that is too much and then goes to Uber and gets a price of $60 but needs to wait 15-20 mins for a car to arrive. Now if the local taxi company plus those in neighboring towns and near the airport are all able to use Uber software a taxi service with drivers sitting around can jump on the $60 fare to keep its drivers working, especially when the customer hangs up after hearing $100.

Air BNB should have a similar model. They have independent home occupants renting out their places but hotels have unused rooms. Priceline and Hotwire auction off some of these rooms. Air BNB can get into that game too. If you need a hotel room in New Brunswick / Piscataway on a football weekend you can check an Air BNB type service and all the hotels with open rooms can participate.

 

[Ataylor1989x]

Always realize that Uber is really playing a long game, because future technology, delivery logistics, income and demographic patterns suggest that auto ownership will not be as much of a thing for many people and cars will safely self-drive and those two factors point to an eventual monopoly for ridesharing.

 

[iReC89]

Its one thing to be a technology company, but providing the rides is another world. They might be better off being an invisible subscription based technology platform for local providers and users then anything tied to a share of rides. What is the accident rate per ride, and how many rides does it take to cover the average litigation costs of an accident? Tough business to be in at only 20% share per ride.

 

[RUBeta]

You don't see an advantage for Google?

I do. A clear one. Google has petabytes of aggregated user data and can derive travel habits for large groups of people. This would allow them to focus the application of driver / equipment resources to places - and time - as needed.

Actually, Uber has substantially more data than Google as it relates to transportation. Google's data for the development of autonomous vehicles or software is generally only generated when Google has its self-driving cars on the road. Uber, on the other hand, leverages its network of tens of thousands of drivers constantly on the road to spin up transportation, route, and logistics data for their R&D efforts. That is why Uber has been able to move so quickly and get first to market with fully autonomous Ubers in Pittsburgh picking up real passengers. From a data acquisition standpoint Uber is the leader here, not Google.

 

[ScarletNYC]

There's really no way they could be down 3 billion dollars. They have a ton of Revenue and what the hell are they even spending any billion dollars on? Ano app and some commercials. If they are losing that kind of money that means they are putting huge dollars into research and development which can only lead to exciting things in the future. I'll probably put some money into it.

R&D for their driverless vehicles I imagine. Not to mention that they offer limitless promotions. I have never paid full price for a ride.

 

[RutgersRaRa]

Then there really isn't a barrier to entry. If a third company enters the market, drivers can just have 3 apps running and riders can check 3 apps for fastest times and cheapest rates.

Heck, someone might even create an app that manages all the taxi apps automatically for drivers and riders.

My friend has done just that, and is live-testing it as we speak. He got beaten to market by Uber, so he went next step and created software/apps that work simultaneously for drivers working for multiple companies and on multiple platforms. He is also in the black-car (limo) market, which are regulated a bit differently than taxis and Uber and have a different market. Had he/we beaten Uber to market, I would have had a facility at RU named after me by now even with the company bleeding cash.

 

[RutgersRaRa]

I like Uber and Lyft except they like to use some dynamic type pricing in Lincoln. I can get a ride from the apartment in the morning before the games for about $9.00+ tip. After the game unless you wait till midnight it will cost $60.00 for the same ride. It's cheaper than jail but still pisses me off. Ha.

Cured the problem for the future. Bought condo in Haymarket. Walk everywhere.

So does someone's son. ;-)

 

[RutgersRaRa]

I would drop 5 figures on Uber stock if it went public.

How long would you expect to hold it?

 

[RutgersRaRa]

Actually, Uber has substantially more data than Google as it relates to transportation. Google's data for the development of autonomous vehicles or software is generally only generated when Google has its self-driving cars on the road. Uber, on the other hand, leverages its network of tens of thousands of drivers constantly on the road to spin up transportation, route, and logistics data for their R&D efforts. That is why Uber has been able to move so quickly and get first to market with fully autonomous Ubers in Pittsburgh picking up real passengers. From a data acquisition standpoint Uber is the leader here, not Google.

This might be a joint venture in the making, since one of the additional revenue streams is TV screens in the seat-backs with targeted advertising (targeted to each passenger once they use the app). Of course if Google and Uber do a joint venture, there is only one name for it: Goober.