# Terrific Forbes article



## Mista T (Aug 16, 2017)

By any measure, Uber's seven-year entrepreneurial journey has been extraordinary. No venture has ever raised more capital, grown as fast, operated more globally, reached as lofty a valuation - or lost as much money as Uber.

Last month, Uber reported a third-quarter loss of nearly $1.5 billion, bringing its 2017 year-to-date red ink to $3.2 billion. Losses of this magnitude are clearly not sustainable, and call for an explanation of why Uber has been unable to rein in ballooning costs and what it will need to do to survive, let alone prosper.

Much of the recent discourse on Uber has focused on the numerous unethical and possibly illegal corporate behaviors that continue to dog the company, six months after founder Travis Kalanick resigned as CEO. But while the reputational damage from Kalanick's win-at-all-costs ethos has certainly not helped Uber's cause, it has masked a far deeper problem facing the company. Uber's elephant in the room is that its business model is fundamentally broken. To understand why, it is useful to assess Uber's business model in the context of the history of the taxi industry.

December 14 2017

Continued...
https://www.google.com/url?sa=t&sou...4wAA&usg=AOvVaw3aRxsC_1xWDTOlvBBgEzpc&ampcf=1


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## Rakos (Sep 2, 2014)

Nice catch Mr T...

Very well written...

Should be a required reading...

For ANY TNC driver...8>)

Rakos


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## Mars Troll Number 4 (Oct 30, 2015)

Good news...

well..

for me..

For uber...

I see this as a sign that the financial world is waking up from the Uberlusion (uber illusion)

If the investors stop throwing money at these firms they will fizzle down the drain.

Good luck with your money pit uber...

Keep on diggin...


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## Skepticaldriver (Mar 5, 2017)

Well written. Good venue to publish. 
Of course, the readers of forbes are all about trying to become mr monopoly at everyone elses expense. So its like telling a bunch of sadists a tale of anothers economic misfortune. Thats fap material for them


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## Brooklyn (Jul 29, 2014)

I agree 100%

A lot of people are gassed that Uber is like Amazon where they’re burning money to get bigger.. which is true but they’re not realizing Amazon did so to develop an entire infrastructure. Uber while building a market share is buying rides to expect customers to stick with them. 


Difference is

Amazon spent money to make packages quicker, more reliable, and have everyone buy/sell on their platform in an industry they didn’t lower the standards on. They didn’t make it where they started saying **** the laws of every single town, city, state and country. 


Uber is trying to buy rides and lower the entry level but don’t realize by doing that they lowered the bar for everyone else so they can compete with Uber with less costs as well.


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## Skepticaldriver (Mar 5, 2017)

Yeah. But amazon standards on the worker end are uber proportional. If what ive read about their delivery services is correct. True though. They did develop good brick and mortar infrastructure. But theyre teetering on other aspects.


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## Chris1973 (Oct 9, 2017)

The original sin was pricing a potentially superior service 30% under taxi when 10% would have worked almost as well. The no tips allowed in app BS should have been a red flag from day one that Travis was an out of touch *****. Lyft market share would be single digits if that ***** wasn't such an out of touch with reality *****. Good job *****. Am I overusing the made up word *****?


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## Rakos (Sep 2, 2014)

The problem really arrived in 2016...

With those fare cuts that...

Were going to make us more money...

I never believed that crap...

It's kinda like an expensive hooker...

Wurkin the streets...

For a nickle trick...

And pax treat us accordingly...

This must stop...!!!

Rakos


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## Skepticaldriver (Mar 5, 2017)

Lower fares did trigger more usage. Maybe. But then drivers doubled and tripled. I got more calls during 2014 than 2017


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## Rakos (Sep 2, 2014)

Maybe if they would try...

To NOT saturate an area...

With too many drivers...

It seems to me that...

My 3 years of good driving...

Doesn't mean squat to them...

Badges my monkey a$$...8>O

Rakos








PS. Just so you know Unicorns and Bigfoot really exist...at least in my universe...8>)


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## Skepticaldriver (Mar 5, 2017)

All part of that no lost ping bs.


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## Chris1973 (Oct 9, 2017)

Travis with his golden parachute, drinking champagne out of super models shoes, is the biggest walking contradiction in the history of mankind. On one hand he disrupts the sorry ass taxi industry, but then ruins the livelihood of millions of poor people by insisting on a no tipping policy jihad that has extended beyond rides to the food service industry, in a big way. Like the old 30 minutes or it's free policy from dominos pizza 20 years ago, Travis's legacy will be tipping is not necessary, it's included! Good job *****, that's your legacy, don't tip! It's ****ing included! DOOSHBAG scum!


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## Red Leader (Sep 4, 2016)

Another silly article written by a borderline ******.

You would think people would get tired of reading things written as entertainment being passed off as reality or credible.


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## ABC123DEF (Jun 9, 2015)

Chris1973 said:


> The original sin was pricing a potentially superior service 30% under taxi when 10% would have worked almost as well. The no tips allowed in app BS should have been a red flag from day one that Travis was an out of touch *****. Lyft market share would be single digits if that ***** wasn't such an out of touch with reality *****. Good job *****. Am I overusing the made up word *****?


HAHAHAHAHA! No, '*****' is a perfectly acceptable noun and adjective. I vote that the use of '*****' should be widely used in the English language...especially when referring to the operations of Oopsber...er...Uber.

Noun - He's quite a *****.
Adjective - He is quite a ***** individual.


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## dirtylee (Sep 2, 2015)

Really curious what the numbers are for Q4 2017. They have been hitting upfront pricing pretty hard.


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## mach7 (Oct 30, 2017)

Forbes is fake news.


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## lubi571 (Nov 26, 2015)

Great service no reward
Great driver no reward
Improve brand no reward
Increase co. "earnings" no reward 
Not only no reward, we thank you by cutting your income and flood area with as many drivers as possible so you can't do the above. How can that model possibly fail?


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## CarterPeerless (Feb 10, 2016)

Nice article with just a couple things wrong.

Uber is rarely taking only 25% of a fare. This makes their position even worse if they are actually taking 40% and still losing money.

The author supposes that a new driver is banished to less profitable locales. Not true. Every driver, new and old, can fish the best spots. There is no seniority advantage to location, except that older drivers have more cycles and know how to work the market better.

The author take a broad stroke to the autonomous issue without considering the current financial drain and considering the future financial investment. By just saying that “autonomous cars may help”, he flattly accepts they they will be an improvement. Maybe it was too big of a topic for his article.


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## BlackTruth (Dec 17, 2017)

Uber can't make money because Uber has absolutely NO values. The driver should have been first...NOT the rider (PAX). Because Uber put the pax before the driver, it's akin to building a house on a weak unstable foundation. The drivers are the foundation. The drivers should be paid more than the app. Because uber and Lyft are greedy (and Juno), Their greed is their demise. Improper deactivations without due process, spying on drivers, stealing money from drivers, greyball, bro culture, etc. the list is endless.
Meanwhile, in ubers quest to not retain veteran drivers with a go fu.k yourself attitude, has left uber constantly trying to add new inexperienced wreckless kids who do not have enough experience driving. That's why we are seeing a lot of accidents as well.


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## Rakos (Sep 2, 2014)

BlackTruth said:


> Uber can't make money because Uber has absolutely NO values. The driver should have been first...NOT the rider (PAX). Because Uber put the pax before the driver, it's akin to building a house on a weak unstable foundation. The drivers are the foundation. The drivers should be paid more than the app. Because uber and Lyft are greedy (and Juno), Their greed is their demise. Improper deactivations without due process, spying on drivers, stealing money from drivers, greyball, bro culture, etc. the list is endless.
> Meanwhile, in ubers quest to not retain veteran drivers with a go fu.k yourself attitude, has left uber constantly trying to add new inexperienced wreckless kids who do not have enough experience driving. That's why we are seeing a lot of accidents as well.


Bingo!!!

#Uberdriversmatter

Rakos


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## MoreTips (Feb 13, 2017)

Good article with a author that actually did his research much better than most. I had plenty to add but most of my points were already noted.

The next generation of Rideshare companies can learn from Uber and Lyfts mistakes and learn to take care of its representatives to their customers otherwise known as partners. I just hope TK spends some time in prison before all is finished.


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## Mars Troll Number 4 (Oct 30, 2015)

Hopefully the "new uber" does the smart thing and only works with liscened insured companies. (Also they can shift the legal blame onto someone else 100% of the time if they act only as a middle man)


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## Uberyouber (Jan 16, 2017)

We are about 3 rapes and 2 murders away from this whole thing crashing down. That tip thing was nice. But now I'm just hanging around to watch it burn...


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## Mars Troll Number 4 (Oct 30, 2015)

Uberyouber said:


> We are about 3 rapes and 2 murders away from this whole thing crashing down. That tip thing was nice. But now I'm just hanging around to watch it burn...


How about a guy with a genetic disorder being denied service?

That's gotta be good for at least 1/2 a groping...


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## Uberyouber (Jan 16, 2017)

Errrrrr. It was just a drive off. We have all done that. No knives. no gun. no blood. NO CREDIT !!! And U.S only. this one doesnt count...


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## Mars Troll Number 4 (Oct 30, 2015)

Uber's chances of making it through the UK problems unscathed just hit -10%

Politicians and diplomats are good buddy buddy...


This is absolutely the worst possible news that Uber UK could ever possibly get.


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## heynow321 (Sep 3, 2015)

That was a great read and he is pretty much spot on with the most things, especially the industry dynamics. 

Boober has been the beneficiary of tech bubble 2.0. Stupid investors threw capital at any company with a.com in it's name back in 99 even with a horrible business model under the foolish assumption that profits will come later. 

Today is no different. You just have a group of naïve youngsters with a fatal misunderstanding or lack of interest in history. This shit plays out every 10 to 15 years


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## HereComesTrouble (Nov 19, 2016)

CarterPeerless said:


> Nice article with just a couple things wrong.
> 
> Uber is rarely taking only 25% of a fare. This makes their position even worse if they are actually taking 40% and still losing money.
> 
> ...


From the article: "By pricing its services 30% or more below comparable taxi fares and then retaining 25% of gross bookings for itself, Uber has squeezed the revenues available to compensate drivers, who are ultimately responsible for providing the labor, equipment, maintenance, insurance and fuel to serve consumers."
The article's author failed to do some important research, therefore much of it is wrong.
With Uber now keeping 40%-60% of gross bookings, rather than 20-25%, the imbalance is even worse than this article shows. Also, in some cases, Uber has raised its fares where they are now even comparable to taxi rates, yet the drivers are not earning more.

The article's interesting, but some important points were not well-researched. I agree with what you've pointed out.


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## 1.5xorbust (Nov 22, 2017)

Chris1973 said:


> The original sin was pricing a potentially superior service 30% under taxi when 10% would have worked almost as well. The no tips allowed in app BS should have been a red flag from day one that Travis was an out of touch *****. Lyft market share would be single digits if that ***** wasn't such an out of touch with reality *****. Good job *****. Am I overusing the made up word *****?


No.


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## Alison Chains (Aug 18, 2017)

Indeed. An asset-light model in an asset-heavy industry. The fact that you have no real control over your assets doesn't make you more powerful. Optimal use of your human assets is hampered by the lack of any demonstrated HR intelligence. Physical assets will up and walk with their human owners.

This is what happens when you have only digital infrastructure to show for yourself and try to produce real-world results with only token boots on the ground and a people-management plan that thinks of churn as a management tool. You are unable to integrate your resources with your infrastructure and demonstrate a working model for a sustainable business. Standard bubble economics.


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## heynow321 (Sep 3, 2015)

Alison Chains said:


> Indeed. An asset-light model in an asset-heavy industry. The fact that you have no real control over your assets doesn't make you more powerful. Optimal use of your human assets is hampered by the lack of any demonstrated HR intelligence. Physical assets will up and walk with their human owners.
> 
> This is what happens when you have only digital infrastructure to show for yourself and try to produce real-world results with only token boots on the ground and a people-management plan that thinks of churn as a management tool. You are unable to integrate your resources with your infrastructure and demonstrate a working model for a sustainable business. Standard bubble economics.


And you quickly became one of my favorite posters. You're too smart to be driving boober. What gives?


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## Alison Chains (Aug 18, 2017)

heynow321 said:


> And you quickly became one of my favorite posters. You're too smart to be driving boober. What gives?


Forbes wouldn't hire me. 

(I was in IT during the Y2K bubble)


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## 1.5xorbust (Nov 22, 2017)

Alison Chains said:


> Forbes wouldn't hire me.


Did you try The Economist?


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## Oscar Levant (Aug 15, 2014)

Chris1973 said:


> The original sin was pricing a potentially superior service 30% under taxi when 10% would have worked almost as well. The no tips allowed in app BS should have been a red flag from day one that Travis was an out of touch *****. Lyft market share would be single digits if that ***** wasn't such an out of touch with reality *****. Good job *****. Am I overusing the made up word *****?


In my city Uber's are about half of what Taxis charge. There is no reason for this, and this is the reason why Uber is losing money.


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## MercDuke (Nov 18, 2017)

Hopefully they raise rates to make more money... I know, I will get flamed for even saying it, but it just seems so obvious...



Forbes said:


> There are two possible remedies to improve driver compensation, but both alternatives would undoubtedly harm Uber's already tenuous economics. Uber could raise fares at its current revenue sharing split, or increase the driver share of gross revenues.


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## Brooklyn (Jul 29, 2014)

MercDuke said:


> Hopefully they raise rates to make more money... I know, I will get flamed for even saying it, but it just seems so obvious...


But if they raise rates to make more money do you think they're going to realistically leave the raised rates to the drivers or keep it for themselves?


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## goneubering (Aug 17, 2017)

MercDuke said:


> Hopefully they raise rates to make more money... I know, I will get flamed for even saying it, but it just seems so obvious...


They DID raise rates!! They're just keeping more now.



dirtylee said:


> Really curious what the numbers are for Q4 2017. They have been hitting upfront pricing pretty hard.


That will be very interesting to see even though one quarter doesn't mean all that much.


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## MrA (Jul 7, 2016)

Chris1973 said:


> The original sin was pricing a potentially superior service 30% under taxi when 10% would have worked almost as well. The no tips allowed in app BS should have been a red flag from day one that Travis was an out of touch *****. Lyft market share would be single digits if that ***** wasn't such an out of touch with reality *****. Good job *****. Am I overusing the made up word *****?


No, just misspelling ******. Hilarious. UP filters an actual word.


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## MrA (Jul 7, 2016)

With a fleet of self driving vehicles, definitely a taxi.


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## Rakos (Sep 2, 2014)

MrA said:


> No, just misspelling ******. Hilarious. UP filters an actual word.


And all this time you thought...

That our current misspelling...

of curse words was accidental?

Rakos


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## MrA (Jul 7, 2016)

Rakos said:


> And all this time you thought...
> 
> That our current misspelling...
> A sprinkle of water ? Curse word? But they let me type vagina
> ...


But they let me type vagina


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## Rakos (Sep 2, 2014)

MrA said:


> But they let me type vagina


That my friend is NOT a curse word...

You will NEVER hear...

Hey...you sorry vagina...

Hey...vagina...you stole my lane...

Hey...your a dirty vagina...

Nope...never heard any of those...8>)

Rakos


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## 1.5xorbust (Nov 22, 2017)

Rakos said:


> That my friend is NOT a curse word...
> 
> You will NEVER hear...
> 
> ...


I have heard "Don't be such a vagina."


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## Mad Medic (Aug 17, 2017)

BlackTruth said:


> Uber can't make money because Uber has absolutely NO values. The driver should have been first...NOT the rider (PAX). Because Uber put the pax before the driver, it's akin to building a house on a weak unstable foundation. The drivers are the foundation. The drivers should be paid more than the app. Because uber and Lyft are greedy (and Juno), Their greed is their demise. Improper deactivations without due process, spying on drivers, stealing money from drivers, greyball, bro culture, etc. the list is endless.
> Meanwhile, in ubers quest to not retain veteran drivers with a go fu.k yourself attitude, has left uber constantly trying to add new inexperienced wreckless kids who do not have enough experience driving. That's why we are seeing a lot of accidents as well.


Lot to digest so I wont respond to all of it. I will respond on the part of Uber not caring about veteran drivers and constantly recruiting many new and inexperienced drivers.

Not being sarcastic BUT what year did you sign up to drive? 2014-GREAT then you're a vet. After that there's a chance that other vets think of you as a newer driver that saturated their area.

In those regards I am one of those newer drivers. I signed in 16. Now going into 18 I'll have 2 years & maybe the right to complain about new drivers. I don't think it's a drivers fault. I signed to drive b/c I became disabled from my profession, wasnt earning enough to keep lights on at home. Drivers sign for many reasons, mostly for an income.

Blame U for the inexperienced drivers & the accidents. When I signed I was amazed at the lack of any training from U. All I had to do was show proof of license & ins. Then, a trip to a tent that said U outside of a Sprint store. Inside, a kiosk. They took my photo & looked at my car, opened doors & completed a so called inspection in 3 minutes, for which each Free inspection was actually a $29 voucher from U to some 3rd party company.

That was it. I was authorized to drive. Fortunately I had a car in ex condition even though they didn't open the hood at inspection.

I began driving out of need but also due to U marketing drivers.

In the Chi market every radio station plastered with ads for drivers. All began by stating "Get your side hustle on" It then went on to say sign today and drive tommorow. It mentioned how drivers were making $25 plus per hour & drive on your time, when you want and where you want.

U had thousands of ads looking for drivers BUT I've never heard one ad (still havent) for Riders to sign up.

Also, drive when you want is a farce. You must drive certain times if you want to have any chance of making anything more than base.

Drive where you want is also a farce. All trips eventually lead to downtown of your city. Driving where you want is a farce if not in locations where U wants cars to be. Each city has Boost & Boost times BUT these are dictated by U. A burb driver will never see boost so driving where you want only applies if you expect bare min. fares.
Then there are acceptance rates. Drive when you want. Drive where you want UNLESS you turn down a few requests and get a time out or worse, deactivated for poor rates.

Surge, won't talk about this post.

Back to driver saturation and inexperience. I wasn't provided driver instruction, not even a 5 minute P.P presentation.

In the Chi market there are strict rules in the actual city. U never informed drivers that Chi has streets designated as " No Stop Zones" meaning you cant even stop to let a pax out in front of a restaurant. U mentions nothing of this. They have no info stating where these are or that foot police are waiting to hand out $500 tickets. I could go on and such as Chi it is illegal on every street to make a u turn. Caught once, pay $500. Also that Chi intersection traffic lights do not have time from yellow to red. Their intersections are photo enforced & lights go Green to YellowRed without any time in between. Chi noted that by reducing the time from yellow to red by 1.5 seconds, they've raised 1.2 million more for the budget. That report also stated they believed that the majority of people in violation would be tourists or business travelers that would never show to court to protest.

As someome who lives in the burbs used to at least enough time to proceed through a yellow if my front tires had already reached the intersection at the time green went to yellow, I was surprised to learn that in Chi at a photo enforced intersection a driver must immed slam the brakes if they see yellow. The choice is either slam brakes & have your back seat pax thrust forward or anticipate prior the light going yellow that it is changing from Green to Red. It's actually dangerous in the fact it increases the odds of being rear ended. The only way an U driver learns this practice is after a $500 ticket. It would have been nice if U educated new driver sign ups.

U tells you to put your airport sticker on & be prepared for pick ups & drop offs but tell you nothing about what not to do. There is a link a driver can click called "Guide to Airports" It states to always have your waybill papers on the dashboard, TNC emblem in the proper spot & pick up & drop off in designated U locations. They don't tell you where these are at. You learn that by driving a dry run at 2am to get a feel for it.

They don't tell a new driver what not to do or how much fines may be. For ex, they dont inform a driver that 1st offense violation is a 2k fine. The airport people love nailing drivers not aware of all rules. It'd be nice if U invested a little into drivers Ed. Even if not mandatory ,would be nice if was available.

Another ex. Every single street in Chi is speed limit 30. Doesnt matter if a side street or a major artery. Would be nice to know that before driving. None have signs.

Another ex is taking a pax to a the attraction Navy Pier. Take them to the main drop off where any car can just stop and drop off their passenger and you'll receive a $1,000 ticket. It'd be nice to have this info in some form of a Chicago Driver Packet since every car except ride share can utilize that entrance.

There is no dress code and basically no vehicle code for drivers. This makes us look bad because pax get impressions based how shabby their last driver was. I've seen cars that dont deserve to be labeled ride share. I've seen drivers that look like they havent showered or shaved in 2 weeks.

I am prob part of the driver saturation out there, since only been doing it since16. Something def has to be done about that BUT HOW?

U wants it so that anyone, anywhere can request an U and get one fast. They can only do this if they have cars everywhere. They want more cars on the road then people requesting cars. This leads to saturation. It upsets us drivers b/c we all receive less surge fares and overall less fares in general. U has it both ways. They cut fares, take more from drivers than in the past and have more cars on the road.

They know over 75% of U drivers stop driving after 3 months. They don't seem to care cause they have new drivers signing up everyday.

Surge will be a thing of the past due to many factors. Some include up front pricing, boost and quest. Others include city officials bringing the subject of surge front and center with local media stories as well as attempting to pass ordinances banning surge or capping it but also having it eliminated if their transit system was down or a city emergency happens.

Chi is actually doing one thing that many U drivers oppose but I'm in favor of. I just don't like the fact of the politics. The Alderman who got it passed happens to be the same the taxi industry supports, enough that they put over 300k a year into his fund, as well as executive employment to relatives.

I like it b/c maybe it will reduce the number of drivers saturating the market.

Chi has mandated a 10 hr driver limit. U has installed a 10 hr. timer on our app. We are not allowed more than 10 hrs in a 24 hr. period. I could take my chances by logging on with Lyft but Chi Police are trained to check for both apps if stopping a ride share driver. 1st offense $2,000 & driver deactivation.

Chi. also mandating that all ride share now finger printed. U complied and mandating fingerprinting and each driver must pay the $30 fee.

I dont like the politics but do like the fact that printing might get drivers off the road that really shouldn't be driving pax. I also think it might have less rushing to sign up with U, knowing they'll have to pay out of pocket for fingerprinting. This will stop those with criminal records but I'm sure U will figure out a way so that a new driver will not have to pay out of pocket.

But U also contradicts all that by sending notice on the driver app that U supports undocumented people in Chi, including it's drivers. Now, Chi Mayor announced that the City of Chi is issuing out City Residence ID cards and all undocumented citizens of Chi are WELCOME. So, Im sure that unless a felon, undocumented drivers have nothing to worry about being finger printed. In addition, U announced 1 million donation towards Dreamers and another million towards "BAM" an inner city non profit. They've yet to announce any donations to it's drivers.

I also think it's time to stop lying to pax. I see it all the time on the forum, driver posting he tells all pax how much he made driving the weekend. They dont figure out their earnings after gas, miles, wear and tear on their cars, etc.

Too many drivers simply say " Awesome" when asked how They like driving U.

Yes - U has the pax thinking we do well. I've had many pax tell me they thought their driver earned EVERYTHING minus the booking fee.


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## Mista T (Aug 16, 2017)

We need more mainstream articles exposing the truth. This article touched on many issues, and there are MANY more, but it's a good start. Awareness is a major step. I would love to see the national news media do a weekly thing like "Uber Watch" which highlights an issue a week.


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## Rakos (Sep 2, 2014)

Mista T said:


> We need more mainstream articles exposing the truth. This article touched on many issues, and there are MANY more, but it's a good start. Awareness is a major step. I would love to see the national news media do a weekly thing like "Uber Watch" which highlights an issue a week.


Only one problem...

Not enuff weeks in the year...8>)

Rakos


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## ABC123DEF (Jun 9, 2015)

heynow321 said:


> That was a great read and he is pretty much spot on with the most things, especially the industry dynamics.
> 
> Boober has been the beneficiary of tech bubble 2.0. Stupid investors threw capital at any company with a.com in it's name back in 99 even with a horrible business model under the foolish assumption that profits will come later.
> 
> Today is no different. You just have a group of naïve youngsters with a fatal misunderstanding or lack of interest in history. This shit plays out every 10 to 15 years


You might be on to something here. However, the after effects could be worse with all of the money that went into 2.0.


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## newdriverintown (Sep 20, 2017)

It's all an illusion, a grand scheme, where Uber "loses" but drivers are the one at loss here. And still, drivers fool themselves of winning big. Might have been the case years ago, but not anymore.


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