# Uber's Now a Food Delivery Company and It's Still Losing Money



## MHR (Jul 23, 2017)

https://www.wired.com/story/ubers-food-delivery-company-losing-money/
*Uber's Now a Food Delivery Company-and It's Still Losing Money*

The pandemic has slashed demand for rides and boosted orders for UberEats. Neither segment is profitable.​








UberEats delivers for McDonald's, as well as other restaurants.PHOTOGRAPH: JONATHAN RAA/NURPHOTO/GETTY IMAGES

Since a company called UberCab took to the streets of San Francisco almost a decade ago, Uber has been many things: an app-powered black car service for self-described "ballers"; a slayer of taxi companies; a scandal-ridden stand-in for Silicon Valley ills; a vehicle to transfer VC-funded joyrides to the masses. When it announced its second-quarter earnings on Thursday, it became clear that the ride-hail company isn't quite a ride-hail company anymore. Uber's a delivery service now-and one that's still losing plenty of dough.

Amid a pandemic that's kept workplaces, restaurants, and bars closed and potential riders housebound, the company's classic rides business cratered, with total bookings dropping by 75 percent year over year. But eaters the world over turned to food-and food delivery-while stuck inside. For the first time, the company's delivery segment generated more in bookings than its rides segment. More than double, in fact. Eats' bookings grew 112 percent year over year.

CEO Dara Khosrowshahi noted on a call with investors Thursday that delivery is now the size of Uber's rides business when he joined the company in 2017. "We've essentially built a second Uber in under three years," he said.

In all, the company posted a $1.8 billion loss between the beginning of April and the end of June. Uber stock fell 2.5 percent in after-hours trading Thursday evening, leaving its shares 25 percent below their May 2019 IPO price.








The company still has not made money off the food delivery sector, where DoorDash, JustEat, Deliveroo, and Zomato are jostling for global supremacy. Uber's delivery section ultimately lost $232 million last quarter. The company backed off a potential acquisition of the US company Grubhub in the spring, but last month it agreed to acquire Postmates, which gives it better reach in Los Angeles and the southwestern US. Khosrowshahi said the company's delivery business was buoyed by larger orders from small and medium-sized restaurants, which tend to pay bigger commissions than national brands like McDonald's and Starbucks. He said he was optimistic about the industry's long-term plans: "Pure-play delivery companies can and will be profitable," he said, even though none are yet.

Uber has bigger plans for the delivery space. Last year it acquired a majority stake in Cornershop, an Instacart rival that delivers groceries, mostly in Latin America. Now, some Central and South American and Canadian customers can order on-demand groceries through the Uber app. During the pandemic, Uber launched an experiment called Uber Connect, which lets customers in 170 cities send small packages to others via car. The company says Connect has completed 3 million trips since mid-April.

Still, storms continue to gather for Uber and its ilk. As Khosrowshahi and crew wrapped up their call with investors on Thursday, Uber lawyers made their first appearance in (virtual) court to defend themselves against a lawsuit filed by the state of California. The suit alleges that Uber and Lyft misclassify their workers, and that drivers for the companies should be considered employees rather than independent contractors. A loss in the case would transform Uber's business model, and cost it hundreds of millions. In court on Thursday, lawyers for California said a state judge should immediately force the companies to recognize their drivers as employees.

Superior Court judge Ethan Schulman seemed skeptical of the app companies' arguments. But he also said he was hesitant to force the companies to immediately change their rules. "I feel a little like I'm being asked to jump into a body of water without knowing how deep it is, how cold the water is, or what's going to happen when I get in," he said. He said he would rule on the issue in a few days.

Tl;Dr
"The pandemic has slashed demand for rides and boosted orders for UberEats. Neither segment is profitable."


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## Jo3030 (Jan 2, 2016)

GOOD.


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## SHalester (Aug 25, 2019)

still over $6b in the bank(s); something to keep in mind.


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## Uber's Guber (Oct 22, 2017)

MHR said:


> _*CEO Dara Khosrowshahi noted on a call with investors Thursday that delivery is now the size of Uber's rides business when he joined the company in 2017. "We've essentially built a second Uber in under three years," he said.*_


One loser after another? Way to brag, Dara! :winking:


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## goneubering (Aug 17, 2017)

Big loss. Stock goes up.

UBERNOMICS!!


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## tohunt4me (Nov 23, 2015)

MHR said:


> https://www.wired.com/story/ubers-food-delivery-company-losing-money/
> *Uber's Now a Food Delivery Company-and It's Still Losing Money*
> 
> The pandemic has slashed demand for rides and boosted orders for UberEats. Neither segment is profitable.​
> ...


" TECHNOLOGY COMPANY " !


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## The Gift of Fish (Mar 17, 2017)

SHalester said:


> still over $6b in the bank(s); something to keep in mind.


The cash burn rate keeps increasing; currently it is at $1.8bn per quarter. If it keeps increasing then those cash reserves will last the company just 3 more quarters, or 9 more months, before the money runs out and the lights go out.

Hopefully the end of Uber will indeed be so soon. I'll be expecting Dara to jump ship relatively soon in order to "spend more time with his family" or "explore other opportunities".


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## Invisible (Jun 15, 2018)

it wouldn’t be Uber if they weren’t losing money. That’s the Uber way.


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## Stevie The magic Unicorn (Apr 3, 2018)

Well, based on this i have a short position going on lyft. their numbers are due in 4 days and Lyft's stock is already falling.

Buying back the 812 lyft shares i'm shorting is already $665.84 less than what i got from selling the shares I borrowed from, i expect this to skyrocket when Lyft posts their financials and they are epic-ly worse than uber's.


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## SHalester (Aug 25, 2019)

The Gift of Fish said:


> Hopefully the end of Uber will indeed be so soon.


Uber essentially has one more quarter to burn cash at the previous rate. After that, they need a capital call or something..........


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## tohunt4me (Nov 23, 2015)

Stevie The magic Unicorn said:


> Well, based on this i have a short position going on lyft. their numbers are due in 4 days and Lyft's stock is already falling.
> 
> Buying back the 812 lyft shares i'm shorting is already $665.84 less than what i got from selling the shares I borrowed from, i expect this to skyrocket when Lyft posts their financials and they are epic-ly worse than uber's.


Lyft may Fail.
G.M. may Fail . ..Again . . .
Hertz is Failing.
Airlines are becoming Amtrack.

Amtrack is becoming . . .


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## EM1 (Apr 28, 2019)

The Gift of Fish said:


> The cash burn rate keeps increasing; currently it is at $1.8bn per quarter. If it keeps increasing then those cash reserves will last the company just 3 more quarters, or 9 more months, before the money runs out and the lights go out.
> 
> Hopefully the end of Uber will indeed be so soon. I'll be expecting Dara to jump ship relatively soon in order to "spend more time with his family" or "explore other opportunities".


Truth! And the numerous pending lawsuits, AB5 in California, etc. this could be the death knell for Uber.


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## SleelWheels (Jun 25, 2019)

The media only reports bad news, and bad news travels on a fast horse.


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## Stevie The magic Unicorn (Apr 3, 2018)

Any stories of the execs cleaning out their portfolios or making large real estate purchases (real estate being a good target for cash investments after selling their stock)

Uber being so cash poor (and lyft not having the delivery services to fall back on)

This is really looking like the end to me.

I don't see the gubment bailing them out either, not after the unemployment problems and...

The upsides to letting uber/lyft fail.

1. The government can stop fighting with them (IE all these lawsuits, ect ect)
2. Increase funds into public transit - Desperately needed with Corona
3. The government paid out a ton of unemployment over this to us drivers, without any payments going in, This generates what i am going to call "butthurt" or intense feelings of personal distaste.
4. Uber was never profitable and never generated income tax, even to the point of lowering the tax liabilities for many drivers other sources of income.
5. Local government can start getting big time bribes from the local taxi cartels again.
6. The lobbying money has dried up or will dry up soon, so no more high end dinners on uber/lyfts dime to enjoy.
7. Increased taxes from the profitable alternatives IE cab companies, increased income tax (yes taxi drivers pay income tax)
8. Taxi companies, even the biggest are all domestic jobs. Unlike/lyft that have transitioned to a lot of oversees jobs.
9. If uber/lyft fail the politicians can let old dogs die in regards to bribes they took and threaten the execs with prosecution if they let it get out, uber/lyft dying lets them burn records and shove all this deep into the closet.
10. Using shell companies to short uber/lyft stock and making a fortune knowing it won't/can't be saved. This is totally insider trading, but all politicians are crooks after all...

The downsides to letting uber/lyft fail...
OR the upsides to saving uber/lyft

1. They may have significant dirt on politicians (IE the bribes they made) However this dirt may not be enough to save uber/lyft. In fact i doubt it. It may however keep the officers from getting jail time, but not save them from bankruptcy.
2. Losing out on a future potential for bribes/lobbying.
3. Seeing a ton of people lose jobs.


*other profitable alternatives*
A. Airport parking (negatively affected by uber/lyft)
B. Public transit
C. Rental car companies
D. taxi/limo services
E. Shuttle services



Personally, i think there's a bigger potential to let uber/lyft fail. The upsides seem to exceed the downsides. Aside from all the drivers losing their jobs I see a ton of upsides, and with the "lobbying" dying (or probobly dying) i don't see the upside to saving uber.

If uber/lyft's lobbying dries up i don't get what a politicians motivation to save it is.


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## EM1 (Apr 28, 2019)

MHR said:


> https://www.wired.com/story/ubers-food-delivery-company-losing-money/
> *Uber's Now a Food Delivery Company-and It's Still Losing Money*
> 
> The pandemic has slashed demand for rides and boosted orders for UberEats. Neither segment is profitable.​
> ...


Some cities had/are subsidizing Uber rides. Ive always suspected there was also federal money directly funneled into Uber as well as major tax breaks, possible corporate accounts or subsidies too(?). Nonetheless, these could be Ubers last days. The executives will have their golden parachute money & hidden bank accounts to fall back on, but at least the gaslighting, manipulating driver customer service reps would get laid off.

https://www.businessinsider.com/som...es-to-cut-public-transportation-costs-2016-12


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## tohunt4me (Nov 23, 2015)

EM1 said:


> Some cities had/are subsidizing Uber rides. Ive always suspected there was also federal money directly funneled into Uber as well as major tax breaks, possible corporate accounts or subsidies too(?). Nonetheless, these could be Ubers last days. The executives will have their golden parachute money & hidden bank accounts to fall back on, but at least the gaslighting, manipulating driver customer service reps would get laid off.
> 
> https://www.businessinsider.com/som...es-to-cut-public-transportation-costs-2016-12


Told you it would Happen !

Years ago.

See " AGENDA 21".


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## sellkatsell44 (Oct 25, 2015)

Uber takes 30% from the restaurant owners.

the service fee & delivery fees from its customers.

and they’re still not profitable. I wonder why... probably all the expensive $$$ they give away in stock and cold hard cash.

if you knew how much their engineers and manager of engineers make and saw they tip averageperson style you might be tempted to leave a little extra in their food.


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## driverdoug (Jun 11, 2017)

The BI article is from 2016.


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## Lissetti (Dec 20, 2016)

*Uber's ride-hailing business is 'a mess,' analysts say, and the stock is sputtering*
Published: Aug. 7, 2020 at 3:39 p.m. ET

Earnings show flailing Rides segment and booming food-delivery business, but analysts focus more on the former after earnings.









Uber shares are falling Friday after the release of company's second-quarter results Thursday.

Uber Technologies Inc. shares declined Friday as concerns about the COVID-19 pandemic's negative effects on the company's ride-hailing business seemed to outweigh hope for its booming food-delivery segment.

After Uber UBER reported earnings Thursday afternoon, analysts wrote positively on the pivot toward food delivery with Uber Eats and the company's cost-cutting measures. But sentiment about the Rides business - where gross bookings plunged 73% year over year - was not optimistic.

"The ride-hailing business is still a mess," Piper Sandler analysts wrote, while increasing their price target to $34 from $33. "In a world defined by coronavirus lockdowns and false-start recoveries, it's hard to ignore the high degree of uncertainty in Uber's most profitable business."

Worries about ride-hailing persist even as Uber saw improvement in ride-hailing in July and it said demand was starting to recover especially outside the United States. MKM Partners, though, said it is now projecting that bookings in the ride-hailing business in 2021 will fail to reach levels Uber hit in 2018, much less last year. The analysts reiterated a buy rating and raised their price target to $40 from $38.

Analysts were split in their reaction to the stock, with ten increasing price targets and three decreasing them, according to FactSet tracking, which did not report any ratings changes Friday afternoon. Uber stock fell as much as 6.5% in Friday trading, closing down 5.2% at $32.91, but were still up more than 10% in 2020.

https://www.marketwatch.com/amp/sto...s-say-and-the-stock-is-sputtering-11596829174


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## mrpjfresh (Aug 16, 2016)

Stevie The magic Unicorn said:


> Personally, i think there's a bigger potential to let uber/lyft fail. The upsides seem to exceed the downsides. Aside from all the drivers losing their jobs I see a ton of upsides, and with the "lobbying" dying (or probobly dying) i don't see the upside to saving uber


Yeah. I've always thought (and written on here) that if Uber and Lyft fail, something better will come along and fill the void. The market and rules are now established and as long as demand returns post-Covid, there will be a need. Maybe not everywhere but in many places, sure. New companies will simply follow the laws in place and learn from the multitude of mistakes made by Uber and Lyft. It's not like the airlines where you can at least justify a bailout; U & L do not really _own_ anything infrastructure wise. Replacing these two companies would be as easy as developing an app and the few details of incorporation, insurance, servers for operation, etc.

I have always wondered if the future would be a more decentralized approach. You could still have a universal app that connects with local companies or licensed operators for a small fee. It just sounds way more logical to me than this huge behemoth that has to adhere to individual local laws in each market across the country. Only time will tell though.


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## The Gift of Fish (Mar 17, 2017)

mrpjfresh said:


> Yeah. I've always thought (and written on here) that if Uber and Lyft fail, something better will come along and fill the void. The market and rules are now established and as long as demand returns post-Covid, there will be a need. Maybe not everywhere but in many places, sure. New companies will simply follow the laws in place and learn from the multitude of mistakes made by Uber and Lyft. It's not like the airlines where you can at least justify a bailout; U & L do not really _own_ anything infrastructure wise. Replacing these two companies would be as easy as developing an app and the few details of incorporation, insurance, servers for operation, etc.
> 
> I have always wondered if the future would be a more decentralized approach. You could still have a universal app that connects with local companies or licensed operators for a small fee. It just sounds way more logical to me than this huge behemoth that has to adhere to individual local laws in each market across the country. Only time will tell though.


Uberlyft will definitely be allowed to fail by the government. If/when that happens then the rideshare 2.0 companies will emerge. They will be leaner companies unconcerned with building trophy offices or developing flying robot cars etc. They will just offer a better alternative to taxis at a slightly lower price.

It would be great if they were true middleman marketplaces (like Expedia, for example), not transportation providers trying to masquerade as marketplaces, which would enable us to be real independent contractors.


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## Tony73 (Oct 12, 2016)

tohunt4me said:


> " TECHNOLOGY COMPANY " !


They reinvented delivery. Longer times, less profit, colder meals. &#128077; wonder if Dara cries in his bedroom every night.


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## driverdoug (Jun 11, 2017)

[QUOTE="Tony73, post: 6435242, member:wonder if Dara cries in his bedroom every night.
[/QUOTE]

No he cries all the way to the bank.


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## tohunt4me (Nov 23, 2015)

driverdoug said:


> [QUOTE="Tony73, post: 6435242, member:wonder if Dara cries in his bedroom every night.


No he cries all the way to the bank.
[/QUOTE]


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## Tony73 (Oct 12, 2016)

driverdoug said:


> No he cries all the way to the bank.


Those money bags are definitely a lot lighter. Wonder if the algorithm will self destruct in a month or two,


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## tohunt4me (Nov 23, 2015)

Travis KNEW IT WASNT TIME YET !


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## Lee239 (Mar 24, 2017)

and they are putting all their eggs in one basket, after the pandemic is over and people get back to work they are not going to be ordering food delivery and restaurants are not going to take the loss to give their food away so Uber can profit from it. The restaurant industry is under mass hypnosis that giving Uber their food profits is a good idea. We have had free or almost free pizza and chinese take out since the 70s


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## Stevie The magic Unicorn (Apr 3, 2018)

Lee239 said:


> and they are putting all their eggs in one basket, after the pandemic is over and people get back to work they are not going to be ordering food delivery and restaurants are not going to take the loss to give their food away so Uber can profit from it. The restaurant industry is under mass hypnosis that giving Uber their food profits is a good idea. We have had free or almost free pizza and chinese take out since the 70s


However if you put in a $50 order for Chines (very easy if you get appetizers, soup a couple entrees ect) some delivery app isn't taking $10-15 off that order just to "match" a customer and a delivery guy to that order.


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## 58756 (May 30, 2016)

Uber's Guber said:


> One loser after another? Way to brag, Dara! :winking:


I mentioned in the past on Reddit that Uber was saved by UberEats but some didn't believe me and downvoted me.


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## _Tron_ (Feb 9, 2020)

And now a judge says drivers in California are employees. In 10 days.


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## goneubering (Aug 17, 2017)

_Tron_ said:


> And now a judge says drivers in California are employees. In 10 days.


Ten days? Practically impossible.


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## UbeRoBo (Nov 19, 2015)

GOOD !!! Now if only the spineless collective of ants could grow a backbone and stop selling out by accepting constant cuts in rates and terms. Keep hitting that accept button ants, Travis and Logan and Dara thank you for your foolish servitude.


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## MnyfrNthng (Aug 13, 2020)

tohunt4me said:


> Lyft may Fail.
> G.M. may Fail . ..Again . . .
> Hertz is Failing.
> Airlines are becoming Amtrack.
> ...


But the stock market is rocking.

Figure that out.



UbeRoBo said:


> GOOD !!! Now if only the spineless collective of ants could grow a backbone and stop selling out by accepting constant cuts in rates and terms. Keep hitting that accept button ants, Travis and Logan and Dara thank you for your foolish servitude.


I don't know you but I still make good money.

It is going to become a tip based business rather than rate based business. It has to be pre-tip. If the customers does not tip enough, they will not get picked. So think of it as an Ebay for delivery. If your $3 tip did not get picked by drivers for $15 minutes then you go and up it to $5 dollars. If it gets picked up, the next time he will tip $5 dollars first.

There is no way these companies continue to provide big rates to drivers. It has to come down to become profitable. Or they need to raise customer fees but why increase the fees instead of customers pay those extra amount as tip in a market environment.



UbeRoBo said:


> GOOD !!! Now if only the spineless collective of ants could grow a backbone and stop selling out by accepting constant cuts in rates and terms. Keep hitting that accept button ants, Travis and Logan and Dara thank you for your foolish servitude.


I don't know you but I still make good money.

It is going to become a tip based business rather than rate based business. It has to be pre-tip. Ubereats cannot continue with its current sctructure leaving the tip to post-delivery.

If the customers does not tip enough, they will not get picked by drivers. So think of it as an Ebay for delivery. Drivers will auction their services to the customers. If you do not offer high enough tip, the driver will not give you service.

If your $3 tip did not get picked by drivers for $15 minutes then the customer will go and up it to $5 dollars or more until it gets picked up. If it gets picked up, the next time he will tip $5 dollars first having an idea about the market.

There is no way these companies continue to provide big rates to drivers. It has to come down to become profitable. Or they need to raise customer fees but why increase the fees instead of customers pay those extra amount as tip in a market environment.


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## simont23 (Jul 24, 2019)

Uber is failing, and will fail. It was designed to. A private equity company could not have done it better. You will find that over the coming months/year, no PE firms will come out of the woodwork with a large shareholding in the company.This is because their dirty work has already been done, and done brilliantly. I am expecting Uber shares to be offered to drivers instead of a percentage of their money over the next few months. These will be shares of the top executives, who will be receiving your money, and dumping their shares in a sensible manner. The last rattle of the diaphragm before breathing stops.


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## goneubering (Aug 17, 2017)

simont23 said:


> Uber is failing, and will fail. It was designed to. A private equity company could not have done it better. You will find that over the coming months/year, no PE firms will come out of the woodwork with a large shareholding in the company.This is because their dirty work has already been done, and done brilliantly. I am expecting Uber shares to be offered to drivers instead of a percentage of their money over the next few months. These will be shares of the top executives, who will be receiving your money, and dumping their shares in a sensible manner. The last rattle of the diaphragm before breathing stops.


No. Uber's valued at over $50 Billion.


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## tohunt4me (Nov 23, 2015)

goneubering said:


> No. Uber's valued at over $50 Billion.


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## simont23 (Jul 24, 2019)

Uber is valued at $50 billion. Totally different to being worth $50 billion. What is the PE ratio? Very consistent. Very negative. That is it's worth.Don't forget if executives get given shares now selling at $10, and they ditch them for $7, that is still $7 they have been given for free, rather than $3 they have lost. I stand by my assertion that Uber is failing, and was designed to fail. It will not leave any sort of vacuum, as personal transport will go back to what it was beforehand. I will stick my neck out and say that no Uber taxi has picked up Travis since he got sacked, because he is nowadays using other forms of transport, of which there are plenty of choices. I am happy to be wrong in this assumption, but don't think I am.


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## goneubering (Aug 17, 2017)

simont23 said:


> Uber is valued at $50 billion. Totally different to being worth $50 billion. What is the PE ratio? Very consistent. Very negative. That is it's worth.Don't forget if executives get given shares now selling at $10, and they ditch them for $7, that is still $7 they have been given for free, rather than $3 they have lost. I stand by my assertion that Uber is failing, and was designed to fail. It will not leave any sort of vacuum, as personal transport will go back to what it was beforehand. I will stick my neck out and say that no Uber taxi has picked up Travis since he got sacked, because he is nowadays using other forms of transport, of which there are plenty of choices. I am happy to be wrong in this assumption, but don't think I am.


Wall Street still says it's worth over $50 Billion but you're free to disagree.


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## simont23 (Jul 24, 2019)

Wall St's job is to protect Wall St. Explain their valuation. They haven't as yet. My suspicion is that they can't.It isn't on PE. It isn't on asset valuation. It isn't on independent turnover projections. It certainly isn't on independent profit projections. It isn't on current and future market share.


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## tohunt4me (Nov 23, 2015)

simont23 said:


> Wall St's job is to protect Wall St. Explain their valuation. They haven't as yet. My suspicion is that they can't.It isn't on PE. It isn't on asset valuation. It isn't on independent turnover projections. It certainly isn't on independent profit projections. It isn't on current and future market share.


ITS . .. . " TECHNOLOGY COMPANY " !


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