Uber lost $1.27 billion or more in the first half of 2016


#1

Originally published at: http://boingboing.net/2016/08/25/uber-lost-1-27-billion-or-mor.html


#2

“Volume!”*

 

  • This comment provided by Punchlines Only, because the internet moves too fast for the set up.

#3

BWHAHAHAA.

How?

How can a company that has NOTHING - no cars, no employees, no insurance etc - burn through that much? They basically should have a room of computers and a room of programmers and a room of service reps. That doesn’t seem like that should cost all that much - but what do i know.


#4

They lost $1.27 billion? Man…I wish I could find $1.27 billion just left out on the street or something.


#5

But they have to have a fully stocked game room, and have massive parties for the company, and pay top dollar for top talent (especially C-level executives), and rent in the best places (silicon valley, of course), and advertising, and making sure you don’t have your “contractors” organize, etc… it all adds up, I guess!


#6

In other news, tulip bulbs are now worth more than ever!

TulipBull, my new exclusive tulip bulb sharing platform, should be valued at 100 billion! But first I need to loose some more VC cash to justify the higher valuation…


#7

I haven’t RTFAd, yet, but based on the line about “subsidies”, it sounds like Uber corporate is paying Uber drivers who don’t have enough fares to make a living so that they will be available when needed.

This was a problem with the business model of the company I work for, as well. You can’t bring in customers unless you have sufficient service providers (no one is going to wait 3 hours for an Uber ride), but the service providers aren’t going to sit around on their thumbs waiting for customers if they aren’t being paid in the meantime.

I do approve of Uber giving free money to their precariously employed freelance taxi drivers, soft-hearted lefty that I am.


#8

For those who choose to live in the past:


#9

Well that makes more sense. Hopefully it was that and not the item’s like:

IIRC some unions do the same thing, where they pay workers who are in a lull.

However, I don’t think one can do this for too long and stay in business. There needs to be a balance.


#10

Rooms of lawyers.


#11

I saw that and went, “Oh! EBIDTA!” because that’s actually an acronym I use on a regular basis, because I am OLD, apparently.


#12

You mean price dumping in order to destroy a regulated industry and replace it with rightless disposable day laborers?


#13

Don’t forget the lobbyists. Don’t see it adding up to 1.27 billion, but lawyers are expensive and it seemed like they had to fight with virtually every city in which they set up shop.


#14

I suspect it’s actually a bit of both. If you’re going to disrupt the transportation industry and change the world, you deserve to play a bit of foosball now and again.

And yes, you’re absolutely right – this strategy is not sustainable. Once you’re in the position of paying your employees just to be available, you either sit around hoping against hope that business picks up so that customers will pay them instead, or you revise your business model.

When we were in this situation, we changed tack and made bringing the service providers to the table a big part of our value-add. The Uber equivalent would be if they sold their drivers’ services to taxi and livery companies to resell to consumers as well as providing rides themselves.


#15

Sure, but I’d argue that’s part of it’s function, supporting dues paying members (especially during a strike, which is much rarer now a days). Of course, there have been some famous cases of high level corruption within unions over the course of the 20th century (Teamsters come to mind), but for the most part, the focus isn’t on creating loads of wealth for people who work full time in the union (union presidents, vice presidents, and on-staff organizers), but to support the rank and file, especially in times of need.

In the case of companies like Uber, the funding is going up, not necessarily across, at least not in more equitable terms. The point is the grow the bottom line, not to ensure the well being of their employees and contractors (drivers, who they refuse to count as employees).


#16

That seems like a cynical but nonetheless justifiable interpretation, yes.


#17

I’d argue that the drivers working for uber deserve a living wage, as much as, if not more than the disruptors deserve to play some foosball.

The whole argument that focuses on cutting employees wages, benefits, jobs first really irritates me, because there is no other capital investment that would be treated this way, yeah? If labor is a key part of the bottom line, make sure you can afford the labor you invest in before you go into business. In generally, the workers are asked to continually tighten belts, while those at the time are not.


#18

I’m sorry, I should have been more clear. I was being sarcastic. I think software developers and the business people who work for them tend to be coddled, privileged, and pretty much blind to everything outside their cultural and economic bubbles.

The thing about disrupting, changing the world, and foosball was a dig at Uber’s expense.

This is a great point. I suspect that the problem is the blindness I mention above. The people working at Uber probably see the drivers more as vague abstractions than people trying to make a living.


#19

This reminds me of when facebook forgot it was supposed to make money.


#20

Yeah, routinely breaking the law as your business model will do that…