Pointing out someone else's bad behavior doesn't excuse one's own. If you think the submission is content-free or otherwise inappropriate for HN, flag it and move on. If you have something interesting and substantive to say, by all means, please do.
Uber is showing huge growth by expanding in a lot of new markets (in Europe and Asia). Market formation is expensive; they initially support a critical mass of drivers with minimum guaranteed earnings before mass adoption in that region happens. As long as they can prove profitability in established regions such as New York City, I don't see a problem with them temporarily losing money on expansion.
At the end of the day, Uber is still a private company. There's very few data flying around, and key metrics are shared just with the original investor group. It's hard to judge if they made a correct capital allocation decision or not. And, ultimately, it's their money and their decision to make. Who are we to judge?
Uber has a clear business model with clear revenue and cost centers. In this way they're similar to Amazon, spending to establish themselves. Their biggest challenge (beyond regulatory hurdles) is the race to the bottom, as their primary cost centers are their drivers, and there's only so far that they can drive down wages.
But there's a whole range of Valley businesses out there with the same basic model: attract lots of users (preferably by being "social"), and then monetize them... Somehow. Where that somehow is almost inevitably advertising.
How many of those really justify billion dollar valuations?
Uber is in the industry where there is no stickiness and the profit margins are incredibly low. The only way they can win is having the opposition (taxis) hampered by regulations that don't apply to them. If either taxis become unregulated (see Bangkok), or Uber becomes regulated (see Austin), Uber loses all competitive advantage it has.
This kind of analysis nearly always fails to account for why these businesses aren't able to recoup expenses. While many startups are will never find a large enough market to be profitable, many others choose to invest earnings and take on debt in order to improve their product further and acquire market share.
Could Uber or Lyft be profitable if they slashed incentive spending, cut R&D efforts (self driving cars, improved matched algorithms, etc), closed up shop in cities too small to be profitable, and fired everyone that wasn't critical to keeping the business running?
Maybe. But this guy certainly doesn't know enough to tell.
What a cheap attempt at fame. Must take a PR guy to do it. Even if you were a beggar who made no money at all, you would still be mathematically more profitable than start-ups that declared losses, $1Bn+, $515Mn, and $450Mn for Uber, Snapchat, and Twitter, respectively. About as hollow as they come. Regardless of your views about an internet venture armageddon, Don't give the article the airtime he's looking for.
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[ 3.7 ms ] story [ 19.6 ms ] threadVacuous ad hominems, however, add nothing to the discourse.
(Clearly, these tech-nerds have sold something to someone, or vast sums of money wouldn't have changed hands.)
Given that:
* sometimes people make large bets and don't expect immediate returns.
* sometimes people make large bets, and they are wrong.
* markets can get overheated
There's no premise to discourse here - just sour grapes.
At the end of the day, Uber is still a private company. There's very few data flying around, and key metrics are shared just with the original investor group. It's hard to judge if they made a correct capital allocation decision or not. And, ultimately, it's their money and their decision to make. Who are we to judge?
But there's a whole range of Valley businesses out there with the same basic model: attract lots of users (preferably by being "social"), and then monetize them... Somehow. Where that somehow is almost inevitably advertising.
How many of those really justify billion dollar valuations?
Could Uber or Lyft be profitable if they slashed incentive spending, cut R&D efforts (self driving cars, improved matched algorithms, etc), closed up shop in cities too small to be profitable, and fired everyone that wasn't critical to keeping the business running?
Maybe. But this guy certainly doesn't know enough to tell.
Go figure.