What is business model of UBER ride-hailing co. ?

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I thought UBER has individual drivers with their own vehicles acting like Taxi, UBER charges certain percentage of the fair. UBER doesn't spend any money design/engineer anything, they have no manufacture plant anywhere.

Then why they are loosing money every quarter ?

Quote:
The ride-hailing giant Uber Technologies Inc. is not a public company, but every three months, dozens of shareholders get on a conference call to hear the latest details on its business performance from its head of finance, Gautam Gupta.

On Friday, Gupta told investors that Uber's losses mounted in the second quarter. Even in the U.S., where Uber had turned a profit during its first quarter, the company was once again losing money.

In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber's losses in the first half of 2016 totaled at least $1.27 billion.


https://www.yahoo.com/finance/news/uber-loses-least-1-2-120012631.html
 
That's a very good question. They don't do anything with the cars, clearly. They don't require a bunch of radio infrastructure. They're advertising isn't exactly everywhere. The article mentions driver subsidies. Perhaps subsidizing drivers isn't a great idea.
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Are directors getting paid a pile of money? Or, are they just running this thing blindfolded, hoping to sell it based upon this ridiculous valuation?
 
uber lost a load of money in china.

Uber loses money here?

Uber is worth many billions???
 
Uber is subsidizing drivers in order to corner lucrative markets. There are plenty of articles in financial journals which describe that in more detail.
 
They spend a lot of money lobbying law makers and marketing. A lot of those rides are subsidized and free actually.

Also their foreign expansion got a lot of hits by their local law enforcements, and I heard they lost $1B in China competing with their own clone until finally agree to merge into their rival.
 
I don't understand how UBER subsidizes drivers ? The article below from forbes.com indicates that drivers paid UBER up to 25% their earnings.

http://www.forbes.com/sites/ellenhuet/20...t/#e4699b5bf5e5

Quote:
Uber is squeezing every last drop out of its drivers’ pay, and it’s starting with its newest recruits.

Drivers who sign up for UberX in San Francisco on or after September 2 will fork over an unprecedented 25 percent of their earnings to Uber, spokeswoman Eva Behrend told Forbes.

That’s the highest-ever UberX commission, which has always been 20 percent or less. And it’s just the latest way that Uber is shaving off more and more of drivers’ meager earnings.
 
Well here is how that really works say you own a company and make 50 million a year and two years later you make 45 million well your high priced accountant with some fancy accounting claims you lost 5 million..
It works like that in real life maybe not to that extent but losses are the big winners in some cases. That is why you have to choose your account very carefully.. I asked him what is 2+2 and he said what do you want it to be.. I said when can you start...lol
 
If you are a Uber driver and have an accident the whole deal is on you. Uber specifically says they have nothing to do with your problem and that included the victim/passenger, you are a contractor. If there's a problem with your insurance then, tough luck. The passenger is coming after you. The driver is anyone who signs up, no drug testing, no FBI background check so when you get in that car you are on your own. Those are all just little details. What's important is that you're using your smart phone an an app and it's all wonderful. You're tech savvy and getting a ride sometimes cheaper except for those surge pricing days like holidays and 7X pricing, oops. In fact your new driver might even know where you want to go and if there's a problem you can email Uber and they'll get back to you, very soon, usually. Take good notes so you don't forget.
 
I still can't understand why some Uber drivers complain about getting paid very little per mile and put so much mileage on their car.

Not to mention picking up sketchy people you never met before.
 
Subsidized by taxes meaning low income people can get rides to go to dr, grocery store, buy cigarettes, amusement park or whatever they want and the tax payers will foot this bill just like subsidized housing. Not everywhere does it but some places do in place of busing.
 
They're also acting as a financial company for certain drivers. They're buying cars for drivers and collecting payments.

They're also spending a ton of money on R&D and lobbying.

Companies like Uber and Amazon can make a profit if they want. But they're always trying to expand and rapidly since debt financing is cheap at the moment.

- Financial Analyst
 
Originally Posted By: HTSS_TR
I don't understand how UBER subsidizes drivers ? The article below from forbes.com indicates that drivers paid UBER up to 25% their earnings.

http://www.forbes.com/sites/ellenhuet/20...t/#e4699b5bf5e5

Quote:
Uber is squeezing every last drop out of its drivers’ pay, and it’s starting with its newest recruits.

Drivers who sign up for UberX in San Francisco on or after September 2 will fork over an unprecedented 25 percent of their earnings to Uber, spokeswoman Eva Behrend told Forbes.

That’s the highest-ever UberX commission, which has always been 20 percent or less. And it’s just the latest way that Uber is shaving off more and more of drivers’ meager earnings.


It's subsidizing by running promotions for certain NEW areas they want to grow, not where they are already OK. Like if they want more drivers in an area they will say sign up for uber and we guarentee you will get $x per hour if you signup.

I believe the article says the money is getting spent growing in China, not SF.


And on the other side think about all the passenger signup bonuses. Sign up now and get $25 free ride credit. Stuff like that is the "subsidies", or paying new people to try out uber/giving out free rides first.

That's what they mean by subsidies
 
Last edited:
Originally Posted By: raytseng
And on the other side think about all the passenger signup bonuses. Sign up now and get $25 free ride credit. Stuff like that is the "subsidies", or paying new people to try out uber/giving out free rides first.

That's what they mean by subsidies.

That's subsidized riders, not drivers.
 
Uber is not an ethical company and a great example of why capitalism has to end. Dont support them, they are unregulated capitalism at it worst.

You don't have to search hard to find out all of the non-democratic, disgusting things they do.
 
Originally Posted By: crazyoildude
Well here is how that really works say you own a company and make 50 million a year and two years later you make 45 million well your high priced accountant with some fancy accounting claims you lost 5 million..
It works like that in real life maybe not to that extent but losses are the big winners in some cases. That is why you have to choose your account very carefully.. I asked him what is 2+2 and he said what do you want it to be.. I said when can you start...lol



I really hate this! IMO, all it is, Wall-street scumbags. If your company is making profit after all cost are taken in account(incl R&D and future business) you are a success! Even if you break EVEN you are still successful, still growing, and still in demand, bringing in new business, and still above the zero!!!

Wall Street scumbags don't see it like that, they pick arbitrary numbers, basically saying "I bought this stock at $3 a share, I want to sell at $6" and they do stupid things like give CEO's stupid money and the company suffers. They buy your stock, they will sell you out if given the chance.

I am strongly against public stock trading, I all support PRIVATE stocks. Private stocks FORCE you have have an interest in the betterment of an corporation.... Not just sell out.
 
Originally Posted By: Leo99
Surprised to see so many communists on here.


Well they pretty much violate and disregard any law regarding ride sharing and taxi service they want. If I tried that, I would be in jail. They have enough lobbyists and lawyers to get away with it.

How many jitney services were raided over the last few decades? No one defended them.
 
They are losing money because they are spending so much to expand. No mystery there.

Their business model is to exploit their drivers, through "behavioral economics" People aren't really all that rational economic actors in real life. So they get the people who equate "gas money" with the cost of operating a car to be drivers. I'm sure there's a high-falutin' behavioral economics name for that, because it's not limited to cars.

My college kid told me it works if you limit yourself to surge periods. Probably true.

I guess it's the wave of the future and only marginally ethically worse than your average cab company.
 
I would do it as a 3rd part contractor so you can be your own llc and take the mileage off as a tax deductible.If they are pulling this jazz on drivers they wont last. I as CEO of Uber would run a 5-10 percent PM and let the driver keep the rest. Uber cant keep doing what they are and expect to survive. At .50 plus a mile is the going rate,drivers could expense the mileage as a tax write off. 25 percent GPM...Wow and ugh no. Uber will be Uber in trouble soon. They are writing the rules and yet they do nothing to back the drivers. They definitely didnt build that.
 
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