Uber posts $708 million loss, finance head leaves: Wall Street Journal

[FrodosNewPet]

Source: Reuters via Yahoo!

May 31, 2017

(Reuters) - Uber Technologies Inc's [UBER.UL] head of finance is leaving as the ride-hailing company reported continued big losses for the first quarter, the Wall Street Journal reported on Wednesday.

The ride-hailing company's first-quarter revenue was $3.4 billion, up 18 percent from the fourth quarter, the newspaper reported. (http://on.wsj.com/2rcyDHM)

Uber's first-quarter loss, excluding employee stock compensation and other items, was $708 million, narrower than the $991 million reported three months earlier, the Journal said.

Uber's head of finance, Gautam Gupta, is leaving the company in July to join another startup in San Francisco, adding to an exodus of top officials, the report said.

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Read more: https://www.yahoo.com/tech/uber-posts-708-million-loss-finance-head-leaves-233258353--finance.html

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The Uber dream is to get rid of drivers entirely. A dream complicated by the Waymo suit and the incredible challenge of designing a TRULY driverless car (current test models require a safety driver, who according to reports has to intervene on average once in less than a mile).

The question becomes, will they run out of OPM (other people's money) and/or talent before they can profitably accomplish that?

[bettyellen]

1. Good. Sexist assholes.

[Dopers_Greed]

2. This exposes the current tech "business model"

Forcing a game of attrition by operating at a loss long enough to establish a monopoly by cutting prices so low that the competition is forced to do the same, while staying infinitely afloat with unlimited VC funding.

Uber prices are so cheap, that I've been wondering for a while how they manage to make any money. I guess they don't. At least not until all competition is gone and they don't have to pay drivers.

[PoindexterOglethorpe]

3. I have only used Uber two or three times, and

found it incredibly convenient.

I also made a point of tipping the driver extra. One of them tried very hard to refuse the tip. I told him I knew what the policy was (at that time) but I insisted he accept. The other drivers accepted the tips graciously.

I happen to live in a city whose only taxicab company shut down about six weeks ago. So without Uber, there's no way to get around. The bus service is minimal. So Uber it is. Or walking.

I don't happen to have a smart phone which you need for Uber. The times I took it, someone else summoned it for me and I reimbursed that person. I used to work the information desk at the local hospital, and more than once I called the local taxi service, and also more than once gave a person the cash to pay for the taxi. If I were still working there, and had a smart phone, I suppose I'd be summoning an Uber driver on my own dime, and be happy to do so.

[FrodosNewPet]

9. Always have a backup plan

Many Uber drivers are great. But not all.

If you use Uber often enough, and grow complacent, you will end up with a no show car. Or a driver who doesn't know how to follow GPS. Or takes you on a sightseeing adventure.

https://www.facebook.com/uber/posts_to_page/

[Sen. Walter Sobchak]

4. You can kill Uber, but that won't save the taxi medallion speculators

[FrodosNewPet]

7. Yes, Uber is killing old school taxis

It's a murder suicide.

Or maybe they DO have unlimited investors willing to subsidize Uber running at a loss in the hunt for a monopolistic market share?

Meanwhile, Uber drivers are starting to get a worse reputation than taxi drivers. Turnover is extreme. Many drivers cannot afford to keep driving the wheels off their cars unless they are good at catching surge pricing. And Facebook, Twitter, and YouTube are filling up with customer complaints about rudeness, sexual harassment, fraudulent cleaning charges, canceling rides because they pay too little or are going the wrong way, etc.

Then there are all hackers charging their rides to others.

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http://www.bbc.com/news/magazine-32900600

~ snip ~

The US website Motherboard reported two months ago that "thousands" of Uber account details were available to buy for as little as $1 each on the anonymous "dark web".

Outraged users have been complaining about being charged for various fraudulent taxi rides.

One Londoner was hit with a bill of about £3,000 for 142 journeys - about 10 a day - over the course of two weeks.

Other "phantom" trips have supposedly taken place in different cities, or even countries.

~ snip ~

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Here is a good podcast featuring automotive writers Dan Roth and Sam Abuelsamid where they provide a synopsis of the challenges facing Uber.

http://wheelbearings.media/podcast/episode-25-aging-trucks-new-crossovers-vintage-convertibles-and-cheap-evs/

Uber commentary begins at 40:24

[Sen. Walter Sobchak]

15. If Uber goes away a non-Tech Brah equivalent will take it's place

Uber's issues are management issues, but nothing will redeem the fortunes of the gangsters who controlled the taxi industry. For knee-capping them globally I will praise Uber.

[Honeycombe8]

5. Whoa. I don't know how it stays in business at this point. nt

[FrodosNewPet]

8. Investment Capital

People are so paranoid about missing out on the next Apple, Amazon, or Microsoft, that they've poured tons of money into Uber.

[DarthDem]

6. Good!

Disgusting, predatory outfit. (I won't dignify them with the word "company".) Effectively a big scam. I hope they go out of business forever and soon.

[melm00se]

10. I'd love to see

their books to see where they are hemorrhaging $$.

It's got to be in the tech area, either capital acquisitions or R&D.

[Egnever]

18. My bet is legal expenses play a big part

[mreilly]

11. Good, hope they go bankrupt

... this company is a massive shitshow. I tried Uber once and the driver ditched us and never showed, claiming "roads are closed."
Must have found it too inconvenient or got a better offer.

THEN Uber tried to charge me $5 for the experience. I disputed that charge and got it credited to my account.

The CEO is a pig and the way they run their company is basically similar to Trump's antics.

Never wasting my time on Uber again.

[sdfernando]

12. Uber also steals $$$ from drivers and riders

They will charge a rider "surge" pricing but not pass on the surge to the driver, paying the driver only the normal rate. So they screw the driver and over charge the rider. I've seen this happen numerous times. Its usually not a lot of money, maybe a $1 or two..but multiply that over the millions of drivers/riders and it is a ton of $$$. There is a class-action lawsuit filed in Los Angeles for exactly this.

I've stopped using Uber and now only take Lyft. At least I know Lyft doesn't stiff the driver or gouge the rider....at least for now.

[Sunlei]

14. How much does the driver get of 'service fee', surge fee & drive milage fee? & they keep entire tip?

[sdfernando]

16. For which service? Uber or Lyft

I think both take 25% of total trip. Not sure how they calculate the mileage. Drive keeps 100% of tip if the rider adds it on the Lyft app.

[Sunlei]

13. We really like Uber rides, "Uber eats" and "Doordash" use them all the time.

[NobodyHere]

17. Looks like they're trying to follow the Amazon model

[Flaleftist]

19. How are they losing money?

The drivers basicallly do all the work and provide their own vehicles and Uber takes like 25%.

[FrodosNewPet]

20. Infrastructure expenses. Legal fees. Engineers.

They need a lot of processing horsepower and bandwidth on the back end to keep the client and driver apps fed. Add to that customer service, accounting, payment processing, legal, and executive systems, they need a lot of high priced software and hardware specialists.

Then, they constantly have to advertise for new drivers, as there is a high turnover. Many people either cannot make enough for it to be worth their time. Or they don't have a good personality fit,. Or their car dies and they cannot afford a replacement,. Or they get deactivated, sometimes for good reasons, sometimes for BS.

They end up losing a lot of money due to fraud. There are a lot of people on the Facebook page referenced above complaining about paying for rides in Russia.

They are trying to survive until driverless cars are a reality, but then they will have capital and maintenance costs to deal with.