ephi321:


Right, the expansion bit makes sense. I know startups do struggle in the early years but Uber does not purchase/own the cars used by their drivers so besides salaries and commissions, I still find it hard to understand why they lost that much money.

Uber sells one dollar to users as 75 cents. Also, Facebook and Google were monopolies when they started as they didn't have direct competition as such, so they burned less money. MySpace couldn't replicate exactly what Facebook was doing, as they literally had to migrate all your friends from Facebook. Google didn't have any serious competition, the incumbents were doing serious crap at that time.

Amazon started when the internet was just starting, so they literally had no competition too, so they could scale up quickly before people started competing with them. They had like 5 or more years headstart. Yet, they only started posting consistent tiny profits after 20 or so years of operation.

But in Uber's case, as early as a year after they launched their now popular low-end ride hailing, they already got competitors raising billions, so they have had to be brutal with marketing, subsidizing fares etc.

AdeOlum:


Uber sells one dollar to users as 75 cents. Also, Facebook and Google were monopolies when they started as they didn't have direct competition as such, so they burned less money. MySpace couldn't replicate exactly what Facebook was doing, as they literally had to migrate all your friends from Facebook. Google didn't have any serious competition, the incumbents were doing serious crap at that time.

Amazon started when the internet was just starting, so they literally had no competition too, so they could scale up quickly before people started competing with them. They had like 5 or more years headstart. Yet, they only started posting consistent tiny profits after 20 or so years of operation.

But in Uber's case, as early as a year after they launched their now popular low-end ride hailing, they already got competitors raising billions, so they have had to be brutal with marketing, subsidizing fares etc.

Very informative, thanks.

But the main aim of any business is to make money, there is no point if they fold up despite high revenues so they need a strategy to manage their competition.

ephi321:


Very informative, thanks.

But the main aim of any business is to make money, there is no point if they fold up despite high revenues so they need a strategy to manage their competition.

Exactly. Just like Amazon, they'd be playing "money games" for a long time... until they find another separate business that'd be responsible for bringing in the profits (just like Amazon subsequently found AWS Cloud [which accounts for all Amazon's profit now]).

Then, the core ride hailing can keep burning money and growing the top line, while the other business would be supplying the profits, to keep investors happy.

For now, Uber still has enough time to find that "other business".

Serves that arrogant Travis kalanick right

.

This UBER can lie !!!! for Afrika na them own the car or dem dey fuel and repair the cars for the owners?

probably out of 2 billion dollar profit, they decided to sacrifice 702 million dollar through fare subsidy.

solpat:
Okay but that's much. Or is it because of the entry of other online cab services into the market

I'm sure the Naija wailers will blame President Buhari for Uber's low revenue.

ephi321:
So their costs outweighed all the revenues made... what exactly are they spending money on?

If fact thats what came to my mind.No fuelling,no car repairs,simply app.
Maintaining their servers though.

Oildichotomy:
It is a silicon Valley's mindset. They think Long term about profits which is actually the way to go! The losses will naturally go down as revenue and expansion increases going forward.

AdeOlum:


Their top line revenue and market share is growing... at a pretty fast rate

linearity:


Most company 'lost' are just accounting gimmicks to evade the tax man.

More so, lost merely means; you spent more than your revenue, and if the company is expanding, plus doing lots of R & D, it is typical for them to spend a lot and Uber is in involved in all that.

They made $3.2b for the period under review, and you will agreed that is a healthy company, plus Uber have a lean operating expenses, since it is the driver and their AI app that does the heaving lifting. Once they take care of the expense side, a big chunk of those revenues will be pure profit.

Uber has been testing lots of self-driving AI cars in multiple US cities recently, so they are spending big on R & D.

If Uber floats an IPO, am buying in, it is a futuristic company and here to stay.

Meritocracy:
Company can record loss if they newly make huge investment which have not started yielding profit but healthy base on forecast returns on those investments.

Thanks

Under is a thief!!! Have they ever recorded any profit I haven't heard of one and yet they keep expanding!