OT: Uber expects to lose $3 billion this year

[eceres]

Keep in mind under is like Netflix....

They have a current business model that is labor intensive and look towards a more technology focused future.

Netflix:
Gen1: Mail DVDs
Gen2: Stream TV

Uber:
Gen1: hire drivers
Gen2: driverless cars

 

[alphapapa]

Be

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.

Between Google Maps and Waze, google has plenty of road data

 

[J.L. Gotrocks]

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.

As Joseph Shumpeter wrote in 1942:

"The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."

 

[KingHigh]

As Joseph Shumpeter wrote in 1942:

"The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."

Yup that's well put.

 

[RBS05]

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.

It's a story that should be familiar to us as Rutgers fans: the losses are due to subsidies. Some numbers got leaked a couple weeks ago that show that riders are only paying 41% of the actual cost of their trips, all in an effort to undercut other services and keep growing market share.

http://www.nakedcapitalism.com/2016...standing-ubers-bleak-operating-economics.html

 

[KingHigh]

It's a story that should be familiar to us as Rutgers fans: the losses are due to subsidies. Some numbers got leaked a couple weeks ago that show that riders are only paying 41% of the actual cost of their trips, all in an effort to undercut other services and keep growing market share.

http://www.nakedcapitalism.com/2016...standing-ubers-bleak-operating-economics.html

Wow, that's aggressive!

 

[RutgersRaRa]

Keep in mind under is like Netflix....

They have a current business model that is labor intensive and look towards a more technology focused future.

Netflix:
Gen1: Mail DVDs
Gen2: Stream TV

Uber:
Gen1: hire drivers
Gen2: driverless cars

My guess is that streaming is far less expensive than a fleet of driverless cars. Of course competition is reduced when it costs more to do business, so Netflix can be competed against more readily. As necessary as change is in business, it produces potential missteps that can impact a company. The Time-Warner/AOL merger looked wonderful on paper, but they didn't manage it well and other companies in that space had better product and customer service.

 

[RU4Real]

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.

Yeah, this what you wrote here - it's all wrong.

 

[RutgersRaRa]

Wow, that's aggressive!

Yep. That's why they have to raise their rates. I'm not sure what Uber costs compared to Lyft, but my guess is that Uber could raise rates without significantly impacting the number of rides.

 

[rutgersal]

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.

So what. To date, they haven't monetized that data in this matter. I'm not going to make my decisions on the basis of what google might do. maybe if they decide to get in the game, i'll feel concerned, but for now, Uber is a very attractive investment proposition.

 

[RUBeta]

Yeah, this what you wrote here - it's all wrong.

Can you substantiate your opinion?

 

[RUBeta]

Be

Between Google Maps and Waze, google has plenty of road data

What does "plenty of road data" mean? To do what with that data, put autonomous cars out on the street? To beat out their competitors?

 

[RU4Real]

Can you substantiate your opinion?

It's not an opinion. I've worked with Google on ITS projects.

If you have a mobile phone with a Google app on it, then there's a better than 90% chance (based on current opt-out rates) that Google has a complete profile on your entire travel history. It knows where you live, where you go every day, what roads you take, what the destinations map to, how long you idle on location, the times you prefer to travel, your personal routing preferences and the overall traffic profile of all routes and destination areas. Google knows what cars you rent, what airlines you fly, where you work, eat and shop.

If you're building a transportation infrastructure that relies to any extent on minimizing time in motion for your resources, that sort of data is invaluable.

 

[Abro1975]

Will Thieves target driverless cars?

What if you fall asleep or pass out in a driverless car? Does it stay at the destination or continue to next stop w passenger still in back?

 

[RBS05]

Will Thieves target driverless cars?

What if you fall asleep or pass out in a driverless car? Does it stay at the destination or continue to next stop w passenger still in back?

A robotic hand pops out of the dash and smacks you across the face. On the prototype models, at least.

 

[FanuSanu52]

Will Thieves target driverless cars?

What if you fall asleep or pass out in a driverless car? Does it stay at the destination or continue to next stop w passenger still in back?

What about a driverless car would suggest it would make an easy target for thieves? Because no one's in it ... the same way no one's in a regular car for 90 percent of the time? Because it's wired to the core with technology designed to track its every movement and surrounding?

The other issue could be solved rather easily with basic technology (vibrating seat, alarm ..) or more advanced self-awareness technology.

 

[alphapapa]

What does "plenty of road data" mean? To do what with that data, put autonomous cars out on the street? To beat out their competitors?

Well the argument of the poster who I was responding to was that Uber has much more data than google does. For the longest time, Uber used Google Maps as their mapping provider & they still drivers to map the route using Google Maps instead of their own app. In addition, you can request Ubers & lyfts from the Google Maps app as well. Waze, in addition to the traffic & routing data, also receives a shit ton of user reported data pertaining to road issues, road blocks, etc.

This along with the stuff highlighted by RU4Real = "plenty of road data"

 

[mildone]

As Joseph Shumpeter wrote in 1942:

"The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."

Mildone wrote, in 2016:

Profit-driven technology adoption that leverages the exponentially increasing pace of advances in robotics, biotech, nanotech, AI and communications will result in socioeconomic and political mutation - if I may use that biological term - that will revolutionize human thinking about economic models leading to ones that are sustainable when an increasing majority of humans are no longer required to do most jobs. This process of Creative Job Destruction is the essential fact that will lead to the death of capitalism, as we know it.

Given that capitalism has worked out great for me (so far), I'm not particularly happy about this. But happy or not; it's what's in our future (25 to 50 years or so).

 

[RuSnp]

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.

A billion here, a billion there....

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.

The problem with the reported numbers is this is after leaving China ie the trend is not what was anticipated.

Lyft is apparently quite the fly in the pricing ointment.

 

[17Q66]

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.

They're losing money on every ride.

 

[kapyoche]

Uber does not have to make money. They have a SW system that is worth a lot. Amazon was not profitable with their web store but they created another business that is worth a lot: Cloud. I think that is what Uber is doing. You go into a business to lose money and then come up with a new business that hits the jackpot.

Uber will be able to use their SW system to go into any business and capture it where there is inefficiencies.
Rutgers could use Uber to create a curriculum on the fly and match students to teachers. Right now you are stuck taking the same boring courses year after year and nothing changes.

 

[miketd1]

I'll have what he's having ^^^^^

 

[Upstream]

Uber does not have to make money. They have a SW system that is worth a lot.

Uber will be able to use their SW system to go into any business and capture it where there is inefficiencies.

Am I missing something? Is there anything special about Uber's software? On the rider side, you enter where you want to go and it sends out a notification to a nearby Uber driver. On the driver side, it tells you that there is someone nearby who wants a ride. That seems pretty unsophisticated. Sure there are a few more bells and whistles, like billing you for the trip, or letting you rate drivers/passengers.

What am I missing about Uber's software that makes it special compared to Lyft's software, or StubHub's software.

 

[RU4Real]

Am I missing something? Is there anything special about Uber's software? On the rider side, you enter where you want to go and it sends out a notification to a nearby Uber driver. On the driver side, it tells you that there is someone nearby who wants a ride. That seems pretty unsophisticated. Sure there are a few more bells and whistles, like billing you for the trip, or letting you rate drivers/passengers.

What am I missing about Uber's software that makes it special compared to Lyft's software, or StubHub's software.

Do Not Feed.

 

[FanuSanu52]

I know nothing about Uber's business plan, but I do know that self-driving cars are poised to change not just the vehicle and the way we drive (or are driven) but the entire paradigm of personal transportation. When a car can pick you up at your door, drive you to the door of your destination and then go away and take care of itself, owning a car is more of a headache than a convenience. Why deal with parking fees/garage space, maintenance, fueling, etc, when you can push a button, get exactly where you need to go and pay one simple price, whether single-time or subscription-based, without the hassles? And if people stop buying cars, Uber, with its loyal user base and brand recognition, is much more than just a modern taxi service, and that fleet of self-driving cars doesn't look quite as expensive when compared to the potential profits as it does inside today's driving paradigm.

Subscription models are already starting. A month ago Hyundai announced that the upcoming Ioniq Electric will be offered in a package that's like a beefed up lease: leasing costs/unlimited mileage/charging costs/regular maintenance/wear+tear parts/registration/etc. I believe one of the luxury brands is experimenting with or preparing a subscription service where, instead of leasing a specific car, you pay a subscription fee for on-demand-style access to a whole fleet - get a sports car when you're taking a fun drive, an SUV when you need to pack up gear, a sedan when it's a family outing, etc.

Expect to see more changes like that leading up to self-driving cars and an explosion after. Will change the entire business landscape for something like Uber.

 

[mildone]

Why deal with parking fees/garage space, maintenance, fueling, etc, when you can push a button, get exactly where you need to go and pay one simple price, whether single-time or subscription-based, without the hassles?

Because Cayman GT4. :)

 

[RU4Real]

I know nothing about Uber's business plan, but I do know that self-driving cars are poised to change not just the vehicle and the way we drive (or are driven) but the entire paradigm of personal transportation. When a car can pick you up at your door, drive you to the door of your destination and then go away and take care of itself, owning a car is more of a headache than a convenience. Why deal with parking fees/garage space, maintenance, fueling, etc, when you can push a button, get exactly where you need to go and pay one simple price, whether single-time or subscription-based, without the hassles? And if people stop buying cars, Uber, with its loyal user base and brand recognition, is much more than just a modern taxi service, and that fleet of self-driving cars doesn't look quite as expensive when compared to the potential profits as it does inside today's driving paradigm.

Subscription models are already starting. A month ago Hyundai announced that the upcoming Ioniq Electric will be offered in a package that's like a beefed up lease: leasing costs/unlimited mileage/charging costs/regular maintenance/wear+tear parts/registration/etc. I believe one of the luxury brands is experimenting with or preparing a subscription service where, instead of leasing a specific car, you pay a subscription fee for on-demand-style access to a whole fleet - get a sports car when you're taking a fun drive, an SUV when you need to pack up gear, a sedan when it's a family outing, etc.

Expect to see more changes like that leading up to self-driving cars and an explosion after. Will change the entire business landscape for something like Uber.

This scenario would mean a paradigm shift in how manufacturers generate revenue from vehicles.

Specifically, the lease resale market, otherwise known as "certified pre-owned", would go away. The ability to sell a vehicle twice for more than it cost to produce it once is a HUUUUGE source of revenue for car makers. What happens to fleet vehicles when their subscription life is over?

 

[FanuSanu52]

This scenario would mean a paradigm shift in how manufacturers generate revenue from vehicles.

Specifically, the lease resale market, otherwise known as "certified pre-owned", would go away. The ability to sell a vehicle twice for more than it cost to produce it once is a HUUUUGE source of revenue for car makers. What happens to fleet vehicles when their subscription life is over?

Yep, it would. The specific insider who was discussing it suggested that the subscription model would be manufacturer-based (it was Audi, btw ), so basically the manufacturer would retain ownership and manage subscription fleets instead of selling through dealership networks. Imagine they could replace that sales revenue with subscription fees and long vehicle lifespans. Subscriptions work for plenty of other tech and industries. Without personal ownership, people dont necessarily care about having the latest models, things are upgradable OTA to keep the tech up to date, manufacturers better control maintenance and conditioning leading to longer lifespans, etc.

Just 1 possibility, but it makes a lot of sense given certain variables and trends.

 

[Upstream]

I know nothing about Uber's business plan, but I do know that self-driving cars are poised to change not just the vehicle and the way we drive (or are driven) but the entire paradigm of personal transportation. When a car can pick you up at your door, drive you to the door of your destination and then go away and take care of itself, owning a car is more of a headache than a convenience. Why deal with parking fees/garage space, maintenance, fueling, etc, when you can push a button, get exactly where you need to go and pay one simple price, whether single-time or subscription-based, without the hassles? And if people stop buying cars, Uber, with its loyal user base and brand recognition, is much more than just a modern taxi service, and that fleet of self-driving cars doesn't look quite as expensive when compared to the potential profits as it does inside today's driving paradigm.

Subscription models are already starting. A month ago Hyundai announced that the upcoming Ioniq Electric will be offered in a package that's like a beefed up lease: leasing costs/unlimited mileage/charging costs/regular maintenance/wear+tear parts/registration/etc. I believe one of the luxury brands is experimenting with or preparing a subscription service where, instead of leasing a specific car, you pay a subscription fee for on-demand-style access to a whole fleet - get a sports car when you're taking a fun drive, an SUV when you need to pack up gear, a sedan when it's a family outing, etc.

Expect to see more changes like that leading up to self-driving cars and an explosion after. Will change the entire business landscape for something like Uber.

I have no idea what will happen with self-driving vehicles. Truly self-driving vehicles (with no backup driver) are still some time away, and then it will be even longer before they reach the point of market acceptance where they are creating a paradigm shift in how people use cars.

And a big question is the price point of these cars to determine if it is cheaper to own a car or use Uber. Currently, if I live in Piscataway and work in Parsippany, it is cheaper for me to own a car and drive than take Uber to work (and that includes the cost of the vehicle, maintenance, depreciation, wear/tear, fuel, etc.). I suspect the same will be true for self-driving cars.

And I think most people in this country who currently own cars would find it more convenient to continue to own cars rather than depend on Uber. If I want to go to the grocery store, I walk to my driveway, get in my car and go to the store. I don't have to wait 15 minutes for an Uber car to pick me up. And when I am ready to come home, I load my groceries into my car and drive home. I don't have to wait 15 minutes for an Uber car, while my ice cream melts, and then have to load my groceries into the Uber. If I have young kids, I already have a car seat in my car. I don't have to worry about setting it up in the Uber. With my own car, I can run to Home Depot and leave my purchases in my car when I then go to Macy's, and then leave everything in my car when I go back to work before going home.

A self-driving Uber paradigm would have to overcome a host of cost and convenience factors to replace individual car ownership.

 

[RutgersUnion]

Uber has already used their technology to expand to food delivery and messenger service. Their value goes well beyond just a car service.

 

[Upstream]

Uber has already used their technology to expand to food delivery and messenger service. Their value goes well beyond just a car service.

So I can order dinner from Old Bay in New Brunswick and have Uber deliver it to me in Hillsborough?

 

[FanuSanu52]

I have no idea what will happen with self-driving vehicles. Truly self-driving vehicles (with no backup driver) are still some time away, and then it will be even longer before they reach the point of market acceptance where they are creating a paradigm shift in how people use cars.

And a big question is the price point of these cars to determine if it is cheaper to own a car or use Uber. Currently, if I live in Piscataway and work in Parsippany, it is cheaper for me to own a car and drive than take Uber to work (and that includes the cost of the vehicle, maintenance, depreciation, wear/tear, fuel, etc.). I suspect the same will be true for self-driving cars.

And I think most people in this country who currently own cars would find it more convenient to continue to own cars rather than depend on Uber. If I want to go to the grocery store, I walk to my driveway, get in my car and go to the store. I don't have to wait 15 minutes for an Uber car to pick me up. And when I am ready to come home, I load my groceries into my car and drive home. I don't have to wait 15 minutes for an Uber car, while my ice cream melts, and then have to load my groceries into the Uber. If I have young kids, I already have a car seat in my car. I don't have to worry about setting it up in the Uber. With my own car, I can run to Home Depot and leave my purchases in my car when I then go to Macy's, and then leave everything in my car when I go back to work before going home.

A self-driving Uber paradigm would have to overcome a host of cost and convenience factors to replace individual car ownership.

What you and I feel is irrelevant. Youths are increasingly apathetic about ownership and care more about tech and social media than owning/driving a car. Pair that trend with convenient, point-to-point transit, growth in untethered employment, etc and see what happens.

Level 4 self-driving cars are only a few years off. I don't suspect itll be just self-driving uber. Car-sharing, ride-sharing, subscriptions, etc will slowly overtake and surpass the then-antiquated ideal of owning a car.

 

[FanuSanu52]

Plus, Uber drone taxis.

 

[Upstream]

What you and I feel is irrelevant. Youths are increasingly apathetic about ownership and care more about tech and social media than owning/driving a car. Pair that trend with convenient, point-to-point transit, growth in untethered employment, etc and see what happens.

But youth gets older and their priorities change. When I was younger I lived in Baltimore and I didn't have a car; I didn't want a car; I didn't need a car. When I was a little older, but still young, I moved back to NJ but worked in NYC. I still didn't own a car and didn't need a car, but on occasion I'd borrow a car. Now I am much older and my wife and I own two cars. I can't remember the last time I took a taxi/uber other than when I was travelling out of town or in NYC.

 

[RU4Real]

So what happens to the halo cars?

What do the luxury and performance builders do? Presumably we'll all be going the same speed in our Uberautos.

Yeah, this isn't a good looking future.

 

[FanuSanu52]

But youth gets older and their priorities change. When I was younger I lived in Baltimore and I didn't have a car; I didn't want a car; I didn't need a car. When I was a little older, but still young, I moved back to NJ but worked in NYC. I still didn't own a car and didn't need a car, but on occasion I'd borrow a car. Now I am much older and my wife and I own two cars. I can't remember the last time I took a taxi/uber other than when I was travelling out of town or in NYC.

Thats not what I mean. Age groups that were once very enthusiastic about getting a first car would now rather sit on Facebook than drive around with friends. This is a well-known trend in the industry and has been for at least a decade. The auto industry emulating the tech industry to help assuage this problem is part of what's helped push self-driving tech along so fast.

 

[FanuSanu52]

So what happens to the halo cars?

What do the luxury and performance builders do? Presumably we'll all be going the same speed in our Uberautos.

Yeah, this isn't a good looking future.

More tracks - like really awesome stuff that puts the Nordschleife to shame. And then ultrapremium luxury carriages that are comfier than home.

 

[Upstream]

Thats not what I mean. Age groups that were once very enthusiastic about getting a first car would now rather sit on Facebook than drive around with friends. This is a well-known trend in the industry and has been for at least a decade. The auto industry emulating the tech industry to help assuage this problem is part of what's helped push self-driving tech along so fast.

OK. So the 1950s trend of 18 year olds having souped up cars to drag race and impress girls has passed. But that doesn't mean that today's millennials have eschewed owning cars for a lifetime. It is one thing to live a lifestyle that doesn't require a car when you are 24 and single. It is something else when you are 42 and married with 2 kids.

 

[RU4Real]

More tracks - like really awesome stuff that puts the Nordschleife to shame. And then ultrapremium luxury carriages that are comfier than home.

I don't know how I'd feel if I couldn't just thunder down the Turnpike at my own clip. I went and fetched the Youngest Child from school yesterday. I've gotten the 169 mile drive to Carlisle, PA down to a solid 2:05. When that sort of thing is gone, I suspect it will be time for me to live on my boat. Someplace warm.

 

[FanuSanu52]

OK. So the 1950s trend of 18 year olds having souped up cars to drag race and impress girls has passed. But that doesn't mean that today's millennials have eschewed owning cars for a lifetime. It is one thing to live a lifestyle that doesn't require a car when you are 24 and single. It is something else when you are 42 and married with 2 kids.

No one's talking about hot rods or car subcultures. We're talking about broad, societal preference shifts. What has changed is the whole "kids coming of age and leaping out of their skin to get their driver's licenses and cars." The car simply doesn't have the seductive allure it had decades ago. Kids can "hang out" with friends online. Driving licenses are down across all ages. A car simply isn't viewed as the status/freedom symbol it once was.

For a while, there was a new study about this every month or two, all saying the same thing. Even if you don't want to believe it, the automakers (which now fancy themselves "mobility" or tech companies) and other transportation companies (Uber) do. For a while, they were obsessed with trying to make the car a rolling smartphone. Then, they went one better and started fast-tracking autonomous driving and conceptualizing how the car will be part of a greater mobility ecosystem, as opposed to a simple consumer good people buy and own. Eventually the tech and design will start to mold those societal preferences as much as vice versa. "People don't know what they want until you show it to them."

I didn't bother listing studies or articles before because there have been many over the years, but here are a couple:

U of M Transportation Research Institute (via Cars.com): https://www.cars.com/articles/forget-cars-millennials-dont-even-want-drivers-licenses-1420683202016/

UNC expert attempts to explain "why": http://www.citylab.com/commute/2015...-for-why-millennials-are-driving-less/398366/

Good fast company article about it: https://www.fastcoexist.com/3027876...wning-cars-and-car-makers-cant-figure-out-why

Plenty more going back years and years. Not a new phenomenon and not one that's explained away by "kids are gonna age out of it like I did."