# Six Economic Reasons To Hate Uber



## everythingsuber (Sep 29, 2015)

One for the economists out there who suggest that Uber is just the free market at work.

https://www.reuters.com/article/us-...x-economic-reasons-to-hate-uber-idUSKCN1MZ246

Ubers 120 million dollar valuation?

"For a company with annualised sales of around $50 billion, large current losses, no clear path to sustainable profitability and serious questions about its future relations with regulators, something much closer to zero looks more in line with sound economics."


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## Mista T (Aug 16, 2017)

In the US each market is different. NYC is the strangest, with each driver required to buy special insurance and Uber being required to report a wide range of statistics. As a result, NYC knows (factually) that Uber made $375 million last year (in that market) AFTER paying drivers. Meanwhile, other cities are still struggling to get a handle on how many cars are actually on the road, due to lack of information.

NYC is Uber's largest US market, and 3rd largest overall. And it is the 3rd highest paying market for drivers in the US.

As far as numbers.... when Uber "reports" their numbers, they give whatever info they feel like giving. As a private company, they are not required to report anything! So they tell the press what they want.

The numbers that Uber reports are NOT in accordance with GAAP. What does that mean? That they are doctoring the numbers however they see fit, and "reporting" them. If they followed GAAP, like 99% of the rest of the world does, we would see a very different story.

Uber is making money. When we see "reports" that Uber is not going to be profitable for another 3 years, we need to question the source. It is the same source that told us that lower prices = more money.


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## Beltsville (Apr 6, 2018)

everythingsuber said:


> One for the economists out there who suggest that Uber is just the free market at work.
> 
> https://www.reuters.com/article/us-...x-economic-reasons-to-hate-uber-idUSKCN1MZ246
> 
> ...


It is the free market at work. I don't think it may be a good company , but sometimes you have to run the experiment to get the data and wisdom. Free market folks don't think everything that's tried will work, but we believe in the liberty of trying.


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## everythingsuber (Sep 29, 2015)

Beltsville said:


> It is the free market at work. I don't think it may be a good company , but sometimes you have to run the experiment to get the data and wisdom. Free market folks don't think everything that's tried will work, but we believe in the liberty of trying.


The free market does not rely on subsidies.
Uber absolutely relies being subsidised.

21 billion of venture capital is now about 5 billion.

Ubers business model.
https://d3n8a8pro7vhmx.cloudfront.n...Subsidizing_Billionaires_Final.pdf?1519989285

Uber is exactly what the free market isn't.


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## Beltsville (Apr 6, 2018)

everythingsuber said:


> The free market does not rely on subsidies.
> Uber absolutely relies being subsidised.
> 
> 21 billion of venture capital is now about 5 billion.
> ...


Ok, I want to make sure that I understand you. Are you stating that venture capital is subsidization ?


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## everythingsuber (Sep 29, 2015)

Beltsville said:


> Ok, I want to make sure that I understand you. Are you stating that venture capital is subsidization ?


Venture capital is of course a subsidy. 
That is the very definition of venture capital.
You do need to show you can wean yourself off of it though. Uber clearly can not as it's issue of 2 billion dollars worth of junk bonds at 8% clearly shows. Moodys give those bonds a rating of B- or C ++ I think and that's poor.
The drivers subsidising Ubers losses on the other hand is completely reprehensible along with also being unsustainable.


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## Beltsville (Apr 6, 2018)

everythingsuber said:


> Venture capital is of course a subsidy.
> That is the very definition of venture capital.
> You do need to show you can wean yourself off of it though. Uber clearly can not as it's issue of 2 billion dollars worth of junk bonds at 8% clearly shows. Moodys give those bonds a rating of B- or C ++ I think and that's poor.
> The drivers subsidising Ubers losses on the other hand is completely reprehensible along with also being unsustainable.


Ok. I disagree, or maybe we are working with different definitions. I assumed that when you mentioned subsidy, you meant government subsidy. Venture capital is not a subsidy, but a form of investment. That is all. That is the free market at work. I fully agree with your assessment that the drivers (who they are trying their damndest to replace anyway ) are covering for their losses. The investors need to take note of it. That is how market should work.


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## UberBlackDriverLA (Aug 21, 2014)

Beltsville said:


> Ok. I disagree, or maybe we are working with different definitions. I assumed that when you mentioned subsidy, you meant government subsidy. Venture capital is not a subsidy, but a form of investment. That is all. That is the free market at work. I fully agree with your assessment that the drivers (who they are trying their damndest to replace anyway ) are covering for their losses. The investors need to take note of it. That is how market should work.


Technically you are correct. Investment money is not a subsidy. But whether you call it a subsidy or investment, Uber needs to have billions of dollars of external money pumped into the business to cover the cost of every trip because they are currently selling the trip below cost.


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## Cigars (Dec 8, 2016)

Mista T said:


> Uber is making money. When we see "reports" that Uber is not going to be profitable for another 3 years, we need to question the source. It is the same source that told us that lower prices = more money.


The "source" is Uber. And yes, Uber is untrustworthy, dishonest and inherently corrupt.

But, this is what they have just told bondholders and issued in a bond issue prospectus.
They just told these financially savvy Wall Street people and under threat of fraud charges if proven that what they said was false, that if everything goes according to Uber's plan and nothing goes wrong, Uber will break even for the first time in 3 years (2021).

They were able to borrow money at 8% based on this claim.
This is considered a "junk" bond and below investment grade.

If Uber was making money, they could borrow at a much lower rate (or would not have to borrow at all).
This 3 year break even is a "rosy" claim. This does not mention new regulations or lawsuits that are not pending, that would not allow this to be possible.

A subprime mortgage borrower will be able to borrow at a better rate than Uber.


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## Beltsville (Apr 6, 2018)

UberBlackDriverLA said:


> Technically you are correct. Investment money is not a subsidy. But whether you call it a subsidy or investment, Uber needs to have billions of dollars of external money pumped into the business to cover the cost of every trip because they are currently selling the trip below cost.


Most business uses this method to get bigger. I have no probs with it. I'm just saying that what Uber is doing is the free market worse, it will actually prvepthpro the free market works when it likely crashes.


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## tohunt4me (Nov 23, 2015)

everythingsuber said:


> One for the economists out there who suggest that Uber is just the free market at work.
> 
> https://www.reuters.com/article/us-...x-economic-reasons-to-hate-uber-idUSKCN1MZ246
> 
> ...


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## heynow321 (Sep 3, 2015)

Mista T said:


> In the US each market is different. NYC is the strangest, with each driver required to buy special insurance and Uber being required to report a wide range of statistics. As a result, NYC knows (factually) that Uber made $375 million last year (in that market) AFTER paying drivers. Meanwhile, other cities are still struggling to get a handle on how many cars are actually on the road, due to lack of information.
> 
> NYC is Uber's largest US market, and 3rd largest overall. And it is the 3rd highest paying market for drivers in the US.
> 
> ...


buddy wtf are you talking about? boober releases selected numbers, mostly focusing on revenue "growth" (dumb people are dazzled by big numbers) to try to trick people into thinking they're doing well. They ALSO want that illusion to take retail investors for all their worth when insiders dump their shares on the moronic public.

boober is not making money and never will with the current model.


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## 1.5xorbust (Nov 22, 2017)

That’s probably the most accurate assessment of Uber and its true valuation that I’ve read in the last ten years.


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## Ubereater (Dec 25, 2015)

Mista T said:


> In the US each market is different. NYC is the strangest, with each driver required to buy special insurance and Uber being required to report a wide range of statistics. As a result, NYC knows (factually) that Uber made $375 million last year (in that market) AFTER paying drivers. Meanwhile, other cities are still struggling to get a handle on how many cars are actually on the road, due to lack of information.
> 
> NYC is Uber's largest US market, and 3rd largest overall. And it is the 3rd highest paying market for drivers in the US.
> 
> ...


Pretty impressive numbers come out of that claim:
$375M x 4 = $1.5B revenue p.a.
Say, the average fare is $15 =100M rides p.a.
100M ÷ 365=273,972 rides a day
273,972÷24=11,415 rides per hour


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## Mista T (Aug 16, 2017)

Ubereater said:


> Pretty impressive numbers come out of that claim:
> $375M x 4 = $1.5B revenue p.a.
> Say, the average fare is $15 =100M rides p.a.
> 100M ÷ 365=273,972 rides a day
> 273,972÷24=11,415 rides per hour


Sounds close.

Here is an article from the summer 2018, stating Uber does 400,000 rides daily in New York.

https://www.google.com/url?sa=t&sou...DRAH&usg=AOvVaw0WFiH5fdL7i9OdbCodkRnK&ampcf=1

"Uber has become hugely popular in New York, and its trips outpaced yellow taxisfor the first time last year. There are about 65,000 vehicles affiliated with Uber in the city, which provide more than 400,000 trips per day, according to the Taxi and Limousine Commission. Lyft, its main rival, tallies about 112,000 trips per day. City law caps the number of yellow taxis at about 13,500; they typically make about 300,000 trips each day."


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## Ubereater (Dec 25, 2015)

^ thanks mate, I just changed the average fare down to $10 and got *really *close with 410000 rides a day


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## Ubereater (Dec 25, 2015)

Ubereater said:


> ^ thanks mate, I just changed the average fare down to $10 and got *really *close with 410000 rides a day


Let's go further and find out what the drivers get from this $1.125B tonns of money:
Assuming the algorithm distributes amount of work more or less equally, each one of the 65000 cars gets $17,307 p.a. gross


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## TomH (Sep 23, 2016)

Cigars said:


> The "source" is Uber. And yes, Uber is untrustworthy, dishonest and inherently corrupt.
> 
> But, this is what they have just told bondholders and issued in a bond issue prospectus.
> They just told these financially savvy Wall Street people and under threat of fraud charges if proven that what they said was false, that if everything goes according to Uber's plan and nothing goes wrong, Uber will break even for the first time in 3 years (2021).
> ...


You are so correct. Lying or misrepresenting on a bond isssue prospectus will lead to lawsuits and jail time .


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## bsliv (Mar 1, 2016)

everythingsuber said:


> One for the economists out there


The article is bunk.

A free market is a private business operating they way they want to operate. A free market has buyers buying products or services they deem valuable. A free market has sellers selling products or services they believe will increase their company's value. Buyers and sellers setting the price of the product is the definition of a free market. Uber operates in a free market, or at least as free as it gets in our Land of Regulations.

The article starts out saying consumer welfare was increased when rideshare companies had the same "safety and insurance requirements" as taxis. The welfare of consumers would be increased if rideshare drivers all had Rolls Royces and a secret service team riding along. But that's not the business model of rideshare.

The article mentions Uber has a financial advantage over its competitors. It generated the advantage via the free market. If Uber continues to lose money without new investors, the advantage evaporates. If investors see something they like, they'll invest. If they don't like what they see, they won't invest. That's how the free market works. The article states this is "anti-competitive behavior." The article is wrong. This is business competition at its finest. The consumer wins. The company that offers the consumer the product at the lowest price should win. Walmart drove its competitors out by offering consumers good values. Walmart won. Consumers won.

The article suggests economists should "dislike" Uber, be "aggrieved", be "angry", or be "queasy". That's like saying a geologist should dislike rocks or be aggrieved, angry and queasy about studying rocks. Economists study markets. Economists don't get angry at a bad business practice.


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## bsliv (Mar 1, 2016)

everythingsuber said:


> Venture capital is of course a subsidy.


Venture capital is capital invested in a project in which there is substantial risk, typically a new or expanding business.



everythingsuber said:


> Venture capital is of course a subsidy.


A subsidy is a sum of money granted by the government or a public body to assist an industry or business.

Venture capital = private money. 
Subsidy = taxpayer money.


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## BetterGet5Stars (Dec 16, 2017)

everythingsuber said:


> The free market does not rely on subsidies.
> Uber absolutely relies being subsidised.
> 
> 21 billion of venture capital is now about 5 billion.
> ...


corporate raiding is not a business model.


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## BetterGet5Stars (Dec 16, 2017)

Everyone loves Uber it was a fantastic creation fantastic idea.

It should be fantastically profitable but you know you got corporate Raiders who don't raid Uber they raid lots of great corporations and businesses. They rape and kill the coeporation and then send their soul to hell with corporate bolshevism. leave the employees to die our go to prison and get raped and tortured while they run away with all the money and Ruin something awesome and cool and fun.


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## Karl Marx (May 17, 2016)

Mista T said:


> In the US each market is different. NYC is the strangest, with each driver required to buy special insurance and Uber being required to report a wide range of statistics. As a result, NYC knows (factually) that Uber made $375 million last year (in that market) AFTER paying drivers. Meanwhile, other cities are still struggling to get a handle on how many cars are actually on the road, due to lack of information.
> 
> NYC is Uber's largest US market, and 3rd largest overall. And it is the 3rd highest paying market for drivers in the US.
> 
> ...


That they're not making money defies all belief.


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## emdeplam (Jan 13, 2017)

Passengers are paying, Uber is losing and drivers are making! Go drivers, clear winners in this equation!


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## UberBlackDriverLA (Aug 21, 2014)

emdeplam said:


> Passengers are paying, Uber is losing and drivers are making! Go drivers, clear winners in this equation!


Disagree... passengers are winning because venture capitalists are paying for part of their transportation. Drivers working for minimum wage give or take are hardly winning.


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## Beltsville (Apr 6, 2018)

UberBlackDriverLA said:


> Disagree... passengers are winning because venture capitalists are paying for part of their transportation. Drivers working for minimum wage give or take are hardly winning.


Don't feed the troll.


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## YourPrivateDriver (Jul 5, 2016)

Mista T said:


> In the US each market is different. NYC is the strangest, with each driver required to buy special insurance and Uber being required to report a wide range of statistics. As a result, NYC knows (factually) that Uber made $375 million last year (in that market) AFTER paying drivers. Meanwhile, other cities are still struggling to get a handle on how many cars are actually on the road, due to lack of information.
> 
> NYC is Uber's largest US market, and 3rd largest overall. And it is the 3rd highest paying market for drivers in the US.
> 
> ...


dont forget the tip is included in the fare


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## UBERyDUMB (Aug 5, 2015)

Understanding
Big
Evil
Ridesharing

I really dislike them...


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