# Uber Says It's Three Years From Turning A Profit As It Pitches Debut Bond



## Jo3030 (Jan 2, 2016)

*Uber Says It's Three Years From Turning A Profit As It Pitches Debut Bond*

*https://www.forbes.com/sites/debtwi...profit-as-it-pitches-debut-bond/#7f0641e85e0e*

Uber knows a lot about its users-where they travel, what they eat, how much riders spend, and how much drivers earn. But when it comes to its own finances, the company is keeping a tight leash on information, even as it asks investors for billions of dollars of new funding.

The ride-sharing platform is currently marketing its first ever high yield bond to a select group of investors as part of a private offering, a placement that's more secretive than typical broadly syndicated bond deals.

The proposed $1.5 billion deal, first reported by Debtwire earlier this week, will take Uber's available liquidity to roughly $10 billion. But the company is expected to burn roughly $3 billion of cash this year as it continues to spend heavily to fund its rapid growth.

During their pitch to investors, Uber executives said the company should generate $10-$11 billion of revenue this year, but that it would book negative EBITDA to the tune of $2 billion. EBITDA should reach break-even levels in around three years, they added.

The deal is the latest example in a recent trend of disruptive, fast-growing companies that are tapping the debt markets for funding, following similar deals over recent months from the likes of WeWork, Tesla and Carvana.

Debt investors usually shy away from companies that don't generate positive cash flow to pay interest on their debt. But despite the risks, Uber's dominance in the ride-sharing space and its growth ambitions in new markets such as autonomous driving make it an exciting proposition, high yield bond investors told Debtwire.

"The initial bond deals for the other tech darlings went well. I would suspect this one for Uber will go even better," said one of those sources.

Investors are also attracted by the ample returns Uber is offering. The company is looking to price the deal with interest rates in the region of 7.5% for the $500 million five-year tranche and 8% for the $1 billion eight-year portion. Pricing is expected next week.

Uber is currently a private company, but CEO Dara Khosrowshahi wants to take it public next year.

Over recent years, the company has attracted huge injections of equity funding from investors such as SoftBank and strategic partners like Toyota, the most recent of which valued Uber at $76 billion.

As it prepares for its IPO, the funding from the bond deal will give Uber more financial firepower to grow its existing business as well as develop new technologies, strike partnerships and acquire potential competitors.

Uber bought bike-sharing start-up JUMP Bikes earlier this year, invested in motorized scooter provider Lime and put money into developing flying cars.

The company is expected to be a regular issuer in the high yield market after it goes public.

"Once they get their public equity in place, they'll use the debt markets to kind of backfill any kind of incremental funding needs they'll have as they continue to grow," said another investor looking at the deal.

Such a strategy would be similar to Netflix's approach to debt funding. Netflix went public in 2002, long before it first accessed the bond markets in 2009-but it continues to issue ever bigger deals as it burns through cash in the drive to create new content and cement its position in the film and TV space.

Because Uber has negative EBITDA, its debt-to-EBITDA ratio - the standard measure of leverage used by high yield investors - is essentially irrelevant, said sources following the deal. Instead, the company is focusing on its debt-to-equity ratio, which it wants to keep below the double digits going forward.

Based on roughly $4 billion of total debt-including the new unsecured bonds alongside existing floating rate loans-Uber has a debt to equity ratio of about 5%. Including convertible debt, that jumps to 9.2%.


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## Buckiemohawk (Jun 23, 2015)

Give us more money and we will profit in three years... I thought they were supposed to IPO next year.


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## heynow321 (Sep 3, 2015)

Rofl they are following the play book of the first dot com bubble almost perfectly ! So three years that’s only another 12 billion or so down the hole.

“Because Uber has negative EBITDA, its debt-to-EBITDA ratio – the standard measure of leverage used by high yield investors – is essentially irrelevant, said sources following the deal. “

Uh WRONG. It’s not irrelevant. It’s more important than ever. This is basically the equivalent of a guy with no job and no income trying to sign up for a bunch of credit cards. Actually it’s worse. It’s like a guy with no job and no income who loses money every day he steps out of bed and asking for more money


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## observer (Dec 11, 2014)

Buckiemohawk said:


> Give us more money and we will profit in three years... I thought they were supposed to IPO next year.


"EBITDA should reach break-even levels in around three years, they added."

"Make a profit" or "break even".

They haven't quite decided...


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## Pulledclear (Oct 31, 2017)

Jo3030 said:


> *Uber Says It's Three Years From Turning A Profit As It Pitches Debut Bond*
> 
> *https://www.forbes.com/sites/debtwi...profit-as-it-pitches-debut-bond/#7f0641e85e0e*
> 
> ...


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

heynow321 said:


> Rofl they are following the play book of the first dot com bubble almost perfectly ! So three years that's only another 12 billion or so down the hole.
> 
> "Because Uber has negative EBITDA, its debt-to-EBITDA ratio - the standard measure of leverage used by high yield investors - is essentially irrelevant, said sources following the deal. "
> 
> Uh WRONG. It's not irrelevant. It's more important than ever. This is basically the equivalent of a guy with no job and no income trying to sign up for a bunch of credit cards. Actually it's worse. It's like a guy with no job and no income who loses money every day he steps out of bed and asking for more money


It's more like a gambling addict asking to borrow money...

Sure they might actually beleive they are gonna make money but...

We ALL know better...

This is just getting rediculous...

I'm really hoping that someone finally sees these tools for what they really are.

The pets.com of transportation.

Every dime that got invested in them resulted in $0 in return.


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## heynow321 (Sep 3, 2015)

Stevie The magic Unicorn said:


> It's more like a gambling addict asking to borrow money...
> 
> Sure they might actually beleive they are gonna make money but...
> 
> ...


as rates rise other more traditional investments will become far more attractive and offer a much better risk/reward scenario. the fact that they're already trying to tap High Yield markets shows they're running into trouble finding new suckers. selling more their equity will become harder (if not impossible) b/c current equity holders will not want their shares diluted. the only option left is to leverage up with debt....not good when you have bigly negative margins (with no hope of turning that around).

ironically, travis is going to come out of this whole debacle looking like a genius. He said it years ago...SDC's are existential to boober, without them there is no boober...and anyone who follows the development of SDC's closely knows they are the 2nd biggest pipe dream of this tech bubble (after boober of course). Very smart of him to bail out early and collect his $1.4 billion.


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

heynow321 said:


> as rates rise other more traditional investments will become far more attractive and offer a much better risk/reward scenario. the fact that they're already trying to tap High Yield markets shows they're running into trouble finding new suckers. selling more their equity will become harder (if not impossible) b/c current equity holders will not want their shares diluted. the only option left is to leverage up with debt....not good when you have bigly negative margins (with no hope of turning that around).
> 
> ironically, travis is going to come out of this whole debacle looking like a genius. He said it years ago...SDC's are existential to boober, without them there is no boober...and anyone who follows the development of SDC's closely knows they are the 2nd biggest pipe dream of this tech bubble (after boober of course). Very smart of him to bail out early and collect his $1.4 billion.


It's looking like those a-holes who sold out on that round are the only ones who will ever make any money/ but I'm still hoping that the law catches up to TK. Like when the company folds and the investors demand financials and they start digging dirt.

I wouldn't be surprised if TK was on record bribing politicians.

When the vultures are picking apart that carcass for scrap they are gonna sell him out so hard so fast and pulll our all the dirt on him they can.

Given how many billion he pissed away all the investors are gonna be pissed when that wooly mammoth of a company crumbles.

Then the dinosaur cab companies can get back to business...


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## tohunt4me (Nov 23, 2015)

Jo3030 said:


> *Uber Says It's Three Years From Turning A Profit As It Pitches Debut Bond*
> 
> *https://www.forbes.com/sites/debtwi...profit-as-it-pitches-debut-bond/#7f0641e85e0e*
> 
> ...





heynow321 said:


> Rofl they are following the play book of the first dot com bubble almost perfectly ! So three years that's only another 12 billion or so down the hole.
> 
> "Because Uber has negative EBITDA, its debt-to-EBITDA ratio - the standard measure of leverage used by high yield investors - is essentially irrelevant, said sources following the deal. "
> 
> Uh WRONG. It's not irrelevant. It's more important than ever. This is basically the equivalent of a guy with no job and no income trying to sign up for a bunch of credit cards. Actually it's worse. It's like a guy with no job and no income who loses money every day he steps out of bed and asking for more money


SHADDAP !

You wanna get Paid Right ?


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## Clothahump (Mar 31, 2018)

Jo3030 said:


> *Uber Says It's Three Years From Turning A Profit As It Pitches Debut Bond*


How can this be? As much money as they steal from the drivers, they have got to be rolling in dough.


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## Buckiemohawk (Jun 23, 2015)

i'm waiting for them to throw the bus crowd off the sinking boat realizing going for the bottom is not worth it. Wait till it's almost 10 dollars to go up the street than 15 dollars. It will keep rising because they have never figured out a profitable margin


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## observer (Dec 11, 2014)

Why would anyone rent a scooter if you can buy one and keep it at home?

Adult scooters are around 400 bux, in a few years they'll be a hundred bux, then who wil want to rent one?

The scooter rental business is going to die.


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## New2This (Dec 27, 2015)

observer said:


> The scooter rental business is going to die.


If it doesn't get regulated and banned first.

They're an eyesore and safety hazard. Municipalities are starting to notice.


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## New2This (Dec 27, 2015)

Already happened in D.C.

Scooter vs BMW SUV. BMW 1, Scooter 0.

Darwin wins again.


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## TwoFiddyMile (Mar 13, 2015)

They won't sell 1.5 billion in bonds. They won't be around in 3 years to collect that profit.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> They won't sell 1.5 billion in bonds. They won't be around in 3 years to collect that profit.


You're probably wrong. I think Uber will be around for at least ten years or even much longer.

https://www.cnbc.com/2018/08/15/uber-q2-2018-revenue-bookings-slow-slightly.html

*Uber's gross cash on hand at the end of the June quarter was $7.3 billion, increasing by $1 billion from a quarter before.*


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## heynow321 (Sep 3, 2015)

Yeah but the magical “network effects” that don’t really exist will save them !


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## jonhjax (Jun 24, 2016)

Buckiemohawk said:


> i'm waiting for them to throw the bus crowd off the sinking boat realizing going for the bottom is not worth it. Wait till it's almost 10 dollars to go up the street than 15 dollars. It will keep rising because they have never figured out a profitable margin


And Uber drivers will still get 3 or 4 dollars for these trips..


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> You're probably wrong. I think Uber will be around for at least ten years or even much longer.
> 
> https://www.cnbc.com/2018/08/15/uber-q2-2018-revenue-bookings-slow-slightly.html
> 
> *Uber's gross cash on hand at the end of the June quarter was $7.3 billion, increasing by $1 billion from a quarter before.*


Dude...that's 2 years of operating costs.



heynow321 said:


> Yeah but the magical "network effects" that don't really exist will save them !


Flying pigs oops I mean flying cabs.


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## Lowestformofwit (Sep 2, 2016)

observer said:


> The scooter rental business is going to die.


There seems to be a dyslexia problem going on here.
It was meant to be "adult hooters" - everyone knows that's where real money can be made.
Hooter rental is a well-proven business model over eons.


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## dirtylee (Sep 2, 2015)

Uber won't go bankrupt unless some1 else takes its marketshare.
They simply have to stop spending money on anything else but operations. 
~$5b is what they take every quarter. 
Cut out those pesky flat rate ride passes.
Cut the SDC money pit.
Move your office away from the most expensive city in the US.
Figure out the insurance "problem"


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## Lowestformofwit (Sep 2, 2016)

And in breaking news from the LOL Channel:
"Uber proposals value company at $120 billion in a possible IPO - WSJ
Uber Technologies Inc [UBER.UL] could be valued at $120 billion when it finally goes public next year according to recent proposals made by U.S. banks, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
The ride hailing company's most recent valuation was pegged at $76 billion, following a $500 million investment from Toyota Motor Corp 7203.T in August.
Reuters reported in late September that Goldman Sachs and Morgan Stanley were in pole position to secure top roles in Uber IPO.
Goldman Sachs and Morgan Stanley last month delivered the valuation proposals to Uber, the WSJ report said."
https://apple.news/A1sC-nzkWQiyeyGVe-OLX1g


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## New2This (Dec 27, 2015)

Lowestformofwit said:


> And in breaking news from the LOL Channel:
> "Uber proposals value company at $120 billion in a possible IPO - WSJ
> Uber Technologies Inc [UBER.UL] could be valued at $120 billion when it finally goes public next year according to recent proposals made by U.S. banks, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.
> The ride hailing company's most recent valuation was pegged at $76 billion, following a $500 million investment from Toyota Motor Corp 7203.T in August.
> ...


$120 Billion LMFAO. In this currency maybe


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## Lowestformofwit (Sep 2, 2016)

Lowestformofwit said:


> Goldman Sachs and Morgan Stanley last month delivered the valuation proposals to Uber, the WSJ report said."


Wonder how much skin in the game this pair have got to lose, if the IPO bullshit goes south in a hurry?


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## TwoFiddyMile (Mar 13, 2015)

Lowestformofwit said:


> Wonder how much skin in the game this pair have got to lose, if the IPO bullshit goes south in a hurry?


Goldman Sachs wrote off their Uber investment years ago.


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## wontgetfooledagain (Jul 3, 2018)

This is like the old joke about a company that loses $1 on every sale it makes and the CFO promises to fix it by "making it up in volume."


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## heynow321 (Sep 3, 2015)

wontgetfooledagain said:


> This is like the old joke about a company that loses $1 on every sale it makes and the CFO promises to fix it by "making it up in volume."


it's not even a joke. that's pretty much what they're trying to do.



Lowestformofwit said:


> Wonder how much skin in the game this pair have got to lose, if the IPO bullshit goes south in a hurry?


generally the underwriters won't take on too much risk. GS and MS are both smart enough to know what a charade boober is so they will likely make sure all the offered shares are placed into the hands of the muppets before trading (and by that, I mean selling) actually begins.


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## goneubering (Aug 17, 2017)

observer said:


> "EBITDA should reach break-even levels in around three years, they added."
> 
> "Make a profit" or "break even".
> 
> They haven't quite decided...


I'm surprised they're willing to admit either option will be three years.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Goldman Sachs wrote off their Uber investment years ago.


Where did you hear that? The value of Uber has climbed substantially.


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> Where did you hear that? The value of Uber has climbed substantially.


Holy crap dude. just stop.


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## Lowestformofwit (Sep 2, 2016)

goneubering said:


> Where did you hear that? The *talked-up value of Uber has climbed substantially*.


Fixed.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Holy crap dude. just stop.


Do you have a link? Or are you just making up stuff?


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> Do you have a link? Or are you just making up stuff?


do you really need a link to see the 3 billion dollar loss every year? Do you really need a link to see that the last substantial venture-capital was last year when SoftBank provided 1.25 billion for 9% ownership in the company?
Do you really need a link to show the data that Toyota kicked in a measly $500 million for a stake in the company?
How about a link for the news story where Uber is attempting a bond release for another 1.5 billion in potential revenue because they are just about out of money?
I read the News forum here, so should you.


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## Nats121 (Jul 19, 2017)

Fuber is lying sack of shit.

They're making hefty profits on our rides and eats deliveries.

Look at the massive cut they take from our rides and eats deliveries, and you can see there's no way they're losing money on us.

They take the profits we generate, and spend them like drunken sailors on scooters, flying cars, SDCs, etc, etc, etc.

Also, fuber is sitting on a data collection GOLDMINE.

They collect valuable data on EVERY TRIP 24/7.

The BILLIONS of dollars fuber saves by paying drivers 1970s taxi rates, not paying FICA, not paying unemployement, not paying workers comp are the largest source of their revenue.

THE DRIVERS are paying for the scooters, SDCs, flying cars, world-wide expansion, etc.



TwoFiddyMile said:


> do you really need a link to see the 3 billion dollar loss every year? Do you really need a link to see that the last substantial venture-capital was last year when SoftBank provided 1.25 billion for 9% ownership in the company?
> Do you really need a link to show the data that Toyota kicked in a measly $500 million for a stake in the company?
> How about a link for the news story where Uber is attempting a bond release for another 1.5 billion in potential revenue because they are just about out of money?
> I read the News forum here, so should you.


You play right into fuber's hands.

They want the public and the govt to believe they're losing money in order to prevent a crackdown on their woeful pay rates for the drivers.

Use your common sense. There's no way their "investors" would be confidently staying the course if the fuber ship was truly taking on water.

Their investors didn't become rich by being stupid.


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## Lowestformofwit (Sep 2, 2016)

When $1.5 billion wasn't quite enough, after all:
https://apple.news/ApZfU7SOHStqDuETBPMlbsw


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## TwoFiddyMile (Mar 13, 2015)

Nats121 said:


> Fuber is lying sack of shit.
> 
> They're making hefty profits on our rides and eats deliveries.
> 
> ...


Ok


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## heynow321 (Sep 3, 2015)

Nats121 said:


> Fuber is lying sack of shit.
> 
> They're making hefty profits on our rides and eats deliveries.
> 
> ...


Lol so naive


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> do you really need a link to see the 3 billion dollar loss every year? Do you really need a link to see that the last substantial venture-capital was last year when SoftBank provided 1.25 billion for 9% ownership in the company?
> Do you really need a link to show the data that Toyota kicked in a measly $500 million for a stake in the company?
> How about a link for the news story where Uber is attempting a bond release for another 1.5 billion in potential revenue because they are just about out of money?
> I read the News forum here, so should you.


You changed the subject. This was your earlier claim. Can you back it up?

*Goldman Sachs wrote off their Uber investment years ago.*


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> You changed the subject. This was your earlier claim. Can you back it up?
> 
> *Goldman Sachs wrote off their Uber investment years ago.*


It's my strong opinion. You obviously disagree. None of these VC firms will get their money out of the IPO. Also my opinion, based on the lack of capital Uber has left and the speed at which they lose money.
But by all means, believe what you want.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> It's my strong opinion. You obviously disagree. None of these VC firms will get their money out of the IPO. Also my opinion, based on the lack of capital Uber has left and the speed at which they lose money.
> But by all means, believe what you want.


You're letting your hate of Uber blind you I think. Goldman Sachs is a huge Uber booster because they will make tons of money when Uber eventually goes public.

Did you know Uber's revenue in 2017 was $37 Billion? They give millions of rides to happy customers every day yet you seem to think they and their investors are so stupid that Uber will go belly up in three years. I must disagree.

Edit.

http://www.latimes.com/business/technology/la-fi-uber-earnings-20180214-story.html

Here's the link. Not my opinion.


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## Lowestformofwit (Sep 2, 2016)

Please keep us advised when they start making a profit.
So you don’t appear overtly pro-Uber, you can do the same re Lyft, Didi, Taxify, Ola, et al.


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## heynow321 (Sep 3, 2015)

$37 billion with margins of -145%. Guess what? If you subsidize flights from coast to coast at way below their cost to produce, you will generate a shit ton of revenue. You will never make a profit though. Why don’t people understand this


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## BurgerTiime (Jun 22, 2015)

I just came back from the future three years from now and have this to report. Uber's quarterly profit:


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## Amsoil Uber Connect (Jan 14, 2015)

goneubering said:


> Do you have a link? Or are you just making up stuff?


I don't have a link, but apparently so. About 3-4 years ago.


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## HotUberMess (Feb 25, 2018)

Pax yesterday: “Uber must be really raking it in.”
Me: (dying laughing) “Uber operates at a loss and has for years.”
Pax: “WHAT!? Are they idiots??”


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## Amsoil Uber Connect (Jan 14, 2015)

As they say,.... Follow the money trail.


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## Lowestformofwit (Sep 2, 2016)

Amsoil Uber Connect said:


> As they say,.... Follow the money trail.


Yes.
And that's why I never follow ANY rideshare drivers along the road.


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## goneubering (Aug 17, 2017)

Lowestformofwit said:


> Please keep us advised when they start making a profit.
> So you don't appear overtly pro-Uber, you can do the same re Lyft, Didi, Taxify, Ola, et al.


They say three years. They have real management in place now so I expect that will happen. The doom and gloom posted here is not realistic. I see many posters and sock puppets hate Uber but they're not going belly up. They will go public at some point.

$120 billion is an absurd valuation for Uber today or next year. I have zero interest in the profits or value of the other companies but you can post that info if you have it.


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> You're letting your hate of Uber blind you I think. Goldman Sachs is a huge Uber booster because they will make tons of money when Uber eventually goes public.
> 
> Did you know Uber's revenue in 2017 was $37 Billion? They give millions of rides to happy customers every day yet you seem to think they and their investors are so stupid that Uber will go belly up in three years. I must disagree.
> 
> ...


Revenue 37 billion. Expense 40.5 to 41 billion. Losing.


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## Zoe Wilson (Oct 16, 2018)

The financial press says that the reason the ride shares burn though so much cash is because they are subsidizing fares to induce riders to use their services in lieu of taxis, personal cars, even cheaper mass transit.
So if they are ever to be profitable they will eventually have to raise fares or cut costs.
I suspect the latter is their long term plan and the message to potential investors is that driverless vehicles are on the way to service this burgeoning alternative transportation model and profits will materialize once they eliminate the costly burden of paying drivers.
This appears to be the reason that UberEats asks folks to come out to the car/curb, a departure from the traditional pizza delivery mode, (and reinforced by the "wait in car" message to the Uber driver) as driverless vehicles aren't likely to be able go up to folk's doors and knock...yet.
Oh and the geniuses who petal this rosy scenario involving unproven technologies to investors get paid millions while the drivers who keep the whole operation going until those driverless cars start working are paid next to nothing.


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## TwoFiddyMile (Mar 13, 2015)

Zoe Wilson said:


> The financial press says that the reason the ride shares burn though so much cash is because they are subsidizing fares to induce riders to use their services in lieu of taxis, personal cars, even cheaper mass transit.
> So if they are ever to be profitable they will eventually have to raise fares or cut costs.
> I suspect the latter is their long term plan and the message to potential investors is that driverless vehicles are on the way to service this burgeoning alternative transportation model and profits will materialize once they eliminate the costly burden of paying drivers.
> This appears to be the reason that UberEats asks folks to come out to the car/curb, a departure from the traditional pizza delivery mode, (and reinforced by the "wait in car" message to the Uber driver) as driverless vehicles aren't likely to be able go up to folk's doors and knock...yet.
> Oh and the geniuses who petal this rosy scenario involving unproven technologies to investors get paid millions while the drivers who keep the whole operation going until those driverless cars start working are paid next to nothing.


Because SDCs have worked so far. Uber has scrapped their SDC program.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Revenue 37 billion. Expense 40.5 to 41 billion. Losing.


Yes. And growing. You seem to miss that part.


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> Yes. And growing. You seem to miss that part.


Yet even Uber admits they are 3 years from breaking even. Expect a fire sale. They don't have 9 billion dollars left for that.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Yet even Uber admits they are 3 years from breaking even. Expect a fire sale. They don't have 9 billion dollars left for that.


You seem to have a fixation on one number when the reality of a rapidly growing company means you must look at the big picture like all the investors are doing. Uber will be fine in three years even though a $120 billion valuation is nuts. I would be a buyer of Uber stock at a $10 billion valuation.


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## Z129 (May 30, 2018)

Uber's business plan has a fatal flaw. That flaw is the drivers. If we can't earn enough to replace our cars then Uber has no fleet. There are plenty of drivers now, and will be for awhile longer, but then it's over. SDC will not save Uber. That was just Travis' pitch to investors.


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## goneubering (Aug 17, 2017)

Z129 said:


> Uber's business plan has a fatal flaw. That flaw is the drivers. If we can't earn enough to replace our cars then Uber has no fleet. There are plenty of drivers now, and will be for awhile longer, but then it's over. SDC will not save Uber. That was just Travis' pitch to investors.


That's why drivers like Snowblind are working this gig correctly. He has a real job and does Uber as a side hustle. The ones who suffer are the drivers who try to do this full time without understanding their costs.


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## heynow321 (Sep 3, 2015)

goneubering said:


> You seem to have a fixation on one number when the reality of a rapidly growing company means you must look at the big picture like all the investors are doing. Uber will be fine in three years even though a $120 billion valuation is nuts. I would be a buyer of Uber stock at a $10 billion valuation.


and why do you think that? their losses are remaining proportional b/c the business model isn't sustainable. what do you not get about that?

explain to the class how these massive losses are magically going to disappear. magical network effects (tip: there aren't any). magical economies of scale ('nother tip: there aren't any). Are they just going to start trimming fat in three years? why not trim the fat now? are they still "expanding"? where in the developed world are they currently not operating? they already got their asses kicked out of russia and gina.

you kool aid drinkers always have such giant blind spots.


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## uber-xxx (Oct 25, 2017)

Zoe Wilson said:


> The financial press says that the reason the ride shares burn though so much cash is because they are subsidizing fares to induce riders to use their services in lieu of taxis, personal cars, even cheaper mass transit.
> So if they are ever to be profitable they will eventually have to raise fares or cut costs.
> I suspect the latter is their long term plan and the message to potential investors is that driverless vehicles are on the way to service this burgeoning alternative transportation model and profits will materialize once they eliminate the costly burden of paying drivers.
> This appears to be the reason that UberEats asks folks to come out to the car/curb, a departure from the traditional pizza delivery mode, (and reinforced by the "wait in car" message to the Uber driver) as driverless vehicles aren't likely to be able go up to folk's doors and knock...yet.
> Oh and the geniuses who petal this rosy scenario involving unproven technologies to investors get paid millions while the drivers who keep the whole operation going until those driverless cars start working are paid next to nothing.


SDCs are at least a decade away from any type of commercial viability, 20-30 years for uber style usage in a market like SF, NYC, or LA.

Uber is trying to out compete PUBLIC TRANSIT which already operates at a loss. Let that sink in.

Uber drivers require a minimal background ship, possible citizenship, any cheap insurance, and a 3000 car to drive on their platform. How can they possibly reduce the cost of drivers further when they already dont pay for gas, maintenance or insurance? How would a 50-100K SDC that requires maintenance and fuel cost less than the typical ant?


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## Lowestformofwit (Sep 2, 2016)

uber-xxx said:


> How would a 50-100K SDC that requires maintenance and fuel cost less than the typical ant?


They'll likely con suckers into buying or leasing them from one their related entities, by telling them "you can become rich collecting fares".
I'd expect some sort of tied maintenance/servicing arrangement to accompany the titling of such vehicles.
Remember, the parasitic Uber (and other rideshare operators) model must be maintained, at all costs (i.e. costs to be born by others, as currently). It's all been about maximum risk transfer to others.


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## observer (Dec 11, 2014)

goneubering said:


> That's why drivers like Snowblind are working this gig correctly. He has a real job and does Uber as a side hustle. The ones who suffer are the drivers who try to do this full time without understanding their costs.


Costs are the same wether you are part time or full time.

You are either losing money part time, or losing money full time.


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## goneubering (Aug 17, 2017)

observer said:


> Costs are the same wether you are part time or full time.
> 
> You are either losing money part time, or losing money full time.


You've been here long enough to know some drivers make a profit.


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## soontobeautomated (Apr 4, 2017)

Everyone knows FUbers economic secret. They are obviously sitting quietly on this one. Cut their commission, pass 100% onto the pax. Then lower rates mean more trips and more money for them!


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## goneubering (Aug 17, 2017)

heynow321 said:


> and why do you think that? their losses are remaining proportional b/c the business model isn't sustainable. what do you not get about that?
> 
> explain to the class how these massive losses are magically going to disappear. magical network effects (tip: there aren't any). magical economies of scale ('nother tip: there aren't any). Are they just going to start trimming fat in three years? why not trim the fat now? are they still "expanding"? where in the developed world are they currently not operating? they already got their asses kicked out of russia and gina.
> 
> you kool aid drinkers always have such giant blind spots.


2016 revenue was $20 billion.

2017 revenue was $37 billion.

I'll be back in a few minutes with the losses for each year.

Okay. 2016 loss was $2.8 billion.

2017 loss was $4.5 billion. I have no inside info but I believe Uber in the USA is profitable. They need to end their lame SDC program now and get out of India. Just those two changes would add a huge amount to their bottom line.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Because SDCs have worked so far. Uber has scrapped their SDC program.


No they didn't.

https://www.google.com/amp/amp.timeinc.net/time/5379865/uber-toyota-investment-self-driving-cars

*Toyota Is Investing $500 Million in Uber to Get Self-Driving Cars on the Road*


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## TwoFiddyMile (Mar 13, 2015)

Z129 said:


> Uber's business plan has a fatal flaw. That flaw is the drivers. If we can't earn enough to replace our cars then Uber has no fleet. There are plenty of drivers now, and will be for awhile longer, but then it's over. SDC will not save Uber. That was just Travis' pitch to investors.


How
Can
They 
Survive
3
Years
Of
Loss
Without 
9
Billion?


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## observer (Dec 11, 2014)

goneubering said:


> That's why drivers like Snowblind are working this gig correctly. He has a real job and does Uber as a side hustle. The ones who suffer are the drivers who try to do this full time without understanding their costs.





goneubering said:


> You've been here long enough to know some drivers make a profit.


But, you weren't talking about drivers who made a profit.

"The ones who suffer are the drivers who try to do this full time without understanding their costs."

Drivers who make a profit probably aren't "suffering".

If drivers "don't understand their costs", they'll lose money no matter wether they work one hour a week or a hundred hours a week.


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

observer said:


> If drivers "don't understand their costs", they'll lose money no matter wether they work one hour a week or a hundred hours a week.


Nope...

They will eventually "wake up" from the dream.. here..

Or it could be any auto shop really...

But honestly i expect that a lot more of these idiots quit when they get massive repair bills and THEN realize they arn't making anything.


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## goneubering (Aug 17, 2017)

observer said:


> But, you weren't talking about drivers who made a profit.
> 
> "The ones who suffer are the drivers who try to do this full time without understanding their costs."
> 
> ...


We agree there are two classes of drivers.



TwoFiddyMile said:


> How
> Can
> They
> Survive
> ...


By cutting their losses. This isn't rocket surgery.


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> We agree there are two classes of drivers.
> 
> By cutting their losses. This isn't rocket surgery.


Ok, now we are making progress. 2 million a year in Manhattan for office space. Probably 10 times that cost in the entire state of California. Green light hubs everywhere. Wars to win back lost countries in Europe and Asia. Legal costs due to class action suits. New driver sign ons. The list is almost endless.
Uber makes me scratch my head. Great software. Doesn't work in China? Scratch China. Europe doesn't want you? Move on. Overhead too high? Suck it up and close some infrastructure.
These things aren't rocket science.
I'm shocked they haven't brought in the efficiency experts.


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

TwoFiddyMile said:


> Ok, now we are making progress. 2 million a year in Manhattan for office space. Probably 10 times that cost in the entire state of California. Green light hubs everywhere. Wars to win back lost countries in Europe and Asia. Legal costs due to class action suits. New driver sign ons. The list is almost endless.
> Uber makes me scratch my head.  Great software. Doesn't work in China? Scratch China. Europe doesn't want you? Move on. Overhead too high? Suck it up and close some infrastructure.
> These things aren't rocket science.
> I'm shocked they haven't brought in the efficiency experts.


Why is their HQ in the of the most expensive Cities in the nation?

I guarantee they could move to LA and save a fortune.

Open up in a boarded up $(*% studio and turn it into a hipster paradise...

In "expensive" cities all they should have are green-light hubs.


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## TwoFiddyMile (Mar 13, 2015)

Also, why was it so important to have total world domination?
Honestly if Uber had done things correctly (like follow licensing laws) they still would have dominated North America and Europe by now and would be raking in actual profits.
You'd think they're Dr Evil or something.


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## observer (Dec 11, 2014)

Stevie The magic Unicorn said:


> Why is their HQ in the of the most expensive Cities in the nation?
> 
> I guarantee they could move to LA and save a fortune.
> 
> ...


To give you an idea of costs, their Advanced Technologies unit rents at Pier 70.

I worked at Pier 70 many years ago. We rented a 120,000 square foot warehouse. The ceilngs at the time were 50-60 feet high and there were no floors, just empty space overhead. The area and buildings were a dump. We paid 1.5 million a year.

Pier 70 is in the middle of being completely redeveloped. Uber rents 130,000 square feet. I imagine their rent is substantially higher.


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## TwoFiddyMile (Mar 13, 2015)

No need to leave the Bay Area either. Plenty of cheap(er) space over the bay in Oakland. Could get tax breaks for hiring the locals.
Almost 10 years of the dumbest spending decisions in corporate history.
Remember the Dot Coms?


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## observer (Dec 11, 2014)

TwoFiddyMile said:


> No need to leave the Bay Area either. Plenty of cheap(er) space over the bay in Oakland. Could get tax breaks for hiring the locals.
> Almost 10 years of the dumbest spending decisions in corporate history.
> Remember the Dot Coms?


One of the managers that worked for me lives in Oakland. I still occasionally call him to see how he's doing. He told me rents there have doubled or more in the last 12 years. I imagine commercial/industrial rents have gone up too.

The problem is these tech companies didn't have to work for their money. They pay high rents with investors money.

I think we are in for a major correction bigger than the Great Depression and Great Recession.

Companies are artificially growing on investor money.

In previous decades companies grew by selling products and making profits. Saving profits and then investing that money in expansion. They'd also get loans from banks or if they could, the stock market.

Now they borrow money without profits. Money investors get from the middle class through 401Ks and IRAs.

Yay! The middle class is now able to invest in the stock market through their work savings (what used to be their pension).

What they don't realize is the middle class is FINANCING its own destruction.

That 401k and IRA money is given to investors who then give that money to companies ("give" was not a mistake, since money is sometimes lost).

The companies then buy other companies where long term employees are downsized.

Downsized with their own money.


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## K girl 213 (Aug 20, 2015)

uber-xxx said:


> SDCs are at least a decade away from any type of commercial viability, 20-30 years for uber style usage in a market like SF, NYC, or LA.
> 
> Uber is trying to out compete PUBLIC TRANSIT which already operates at a loss. Let that sink in.
> 
> Uber drivers require a minimal background ship, possible citizenship, any cheap insurance, and a 3000 car to drive on their platform. How can they possibly reduce the cost of drivers further when they already dont pay for gas, maintenance or insurance? How would a 50-100K SDC that requires maintenance and fuel cost less than the typical ant?


Bingo.


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## TwoFiddyMile (Mar 13, 2015)

observer said:


> One of the managers that worked for me lives in Oakland. I still occasionally call him to see how he's doing. He told me rents there have doubled or more in the last 12 years. I imagine commercial/industrial rents have gone up too.
> 
> The problem is these tech companies didn't have to work for their money. They pay high rents with investors money.
> 
> ...


I hear you. I've often asked the question why should a company go off the charts with stock sales and prices If the product that they sell isn't tied to the stock price? So just because someone like Kramersays this is the hot stock, everyone buys it to inflate the price? Stock prices should be tied to robust sales.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> Also, why was it so important to have total world domination?
> Honestly if Uber had done things correctly (like follow licensing laws) they still would have dominated North America and Europe by now and would be raking in actual profits.
> You'd think they're Dr Evil or something.


That was a combination of TK's hubris and lack of business knowledge.


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## TwoFiddyMile (Mar 13, 2015)

goneubering said:


> That was a combination of TK's hubris and lack of business knowledge.


They haven't changed.


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## goneubering (Aug 17, 2017)

TwoFiddyMile said:


> They haven't changed.


Of course they have. Reality slapped them in the face in Russia and China but the best news for Uber investors is that TK is gone.


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## TwoFiddyMile (Mar 13, 2015)

Oy vey.


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