# Shark Tank's Kevin O'Leary: Uber is not worth investing in because it has no cash flow CNBC Videos



## EmOinDallas (Oct 14, 2018)

https://finance.yahoo.com/video/shark-tanks-kevin-oleary-uber-131007232.html


----------



## BigRedDriver (Nov 28, 2018)

Yep

Had a son ask me if he should buy the stock. I told him I paid for 4 years of college tuition for him. If what he learned was to invest in a company that loses 1 billion a quarter, I want my money back.


----------



## No Prisoners (Mar 21, 2019)

Uber lyft both hype and hope enterprises. Only assets they have its data collected. Nothing else. Both companies cash flow negative without any path to profitability. They will burn through IPO capital in less than 2 years so they're probably already trying to raise more junk debt.


----------



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

No Prisoners said:


> Uber lyft both hype and hope enterprises. Only assets they have its data collected. Nothing else. Both companies cash flow negative without any path to profitability. They will burn through IPO capital in less than 2 years so they're probably already trying to raise more junk debt.


They are running out of options,

About their only "funding" is to borrow money, which comes with interest. Diluting their stock isn't an option either, the villagers would be out with pitchforks. Both the old and the new investors.


----------



## TheDevilisaParttimer (Jan 2, 2019)

I believe Uber will be profitable or at least break even within 5 years. 

They will keep dropping drivers pay and ease back on rider promotions. Then they will start to require all drivers purchase their own commercial insurance. 

Next they will roll out a robust loyalty rewards program for riders to shore up their customer base.


----------



## itsablackmarket (May 12, 2015)

Stevie The magic Unicorn said:


> They are running out of options,
> 
> About their only "funding" is to borrow money, which comes with interest. Diluting their stock isn't an option either, the villagers would be out with pitchforks. Both the old and the new investors.


But they'll probably do it anyway.


----------



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

itsablackmarket said:


> But they'll probably do it anyway.


Yeah your probably right,

Will only cause the end quicker and leave the stockholders with literally nothing when the company folds. The bank holding the loans will get first crack at rights to the name and to the IP.

GM and google won't even be able to take the SDV tech if the bank lending money shuffles away with it.


----------



## 1.5xorbust (Nov 22, 2017)

What’s all this concern about cash flow? Everyone knows it’s all about market share.


----------



## everythingsuber (Sep 29, 2015)

TheDevilisaParttimer said:


> I believe Uber will be profitable or at least break even within 5 years.
> 
> They will keep dropping drivers pay and ease back on rider promotions. Then they will start to require all drivers purchase their own commercial insurance.
> 
> Next they will roll out a robust loyalty rewards program for riders to shore up their customer base.


No. Uber spent 3.1 billion dollars on advertising last year as per it's S-1. Most of that was trying to get new drivers to replace drivers who got out. Cut drivers take spend more on advertising lose more. Uber need another trick.


----------



## Kodyhead (May 26, 2015)

everythingsuber said:


> No. Uber spent 3.1 billion dollars on advertising last year as per it's S-1. Most of that was trying to get new drivers to replace drivers who got out. Cut drivers take spend more on advertising lose more. Uber need another trick.


I dont know about down there but up here all the ads were about rebranding itself, which got erased as every week there was a rape, murder or crazy story with uber and lyft


----------



## everythingsuber (Sep 29, 2015)

Kodyhead said:


> I dont know about down there but up here all the ads were about rebranding itself, which got erased as every week there was a rape, murder or crazy story with uber and lyft


The previous was about 2.6 billion before Uber did the focus on rebrand. Getting drivers replaced takes up the significant preportion of spend on advertising. That will show in the next lot of figures for advertising spend though.


----------



## No Prisoners (Mar 21, 2019)

TheDevilisaParttimer said:


> I believe Uber will be profitable or at least break even within 5 years.
> 
> They will keep dropping drivers pay and ease back on rider promotions. Then they will start to require all drivers purchase their own commercial insurance.
> 
> Next they will roll out a robust loyalty rewards program for riders to shore up their customer base.


1s. uber already with $3+ billion in junk bonds at 8.5%+ interest. Highly unlikely anyone would buy any further bond offering. There's no growth, actually growth receding as per IPO filing.

2nd. IPO capital of approximately $8 billion won't last 3 years at current burn rate. No more VC capital subsidy after IPO. Only one left subsidizing uber is drivers

3rd. Model impossible to free cash flow unless uber raises fares substantially and drops driver rates below 45 cents p mile. This might get them to break even, but not profitable.

4th. Uber cannot require new drivers to carry commercial insurance. They'll never recruit enough new drivers to cover churning rate. No part time driver will pay for the insurance. This is a ludicrous proposition.

5th. Uber has no loyalty from riders or driver. As long as there's a lyft riders will go with whomever offers lower rates. Just look at Uber's negative growth numbers on IPO filing, while Lyft's growth more than double. Lyft's growth only related to lower fares. Neither company has a client base.


----------



## TheDevilisaParttimer (Jan 2, 2019)

everythingsuber said:


> No. Uber spent 3.1 billion dollars on advertising last year as per it's S-1. Most of that was trying to get new drivers to replace drivers who got out. Cut drivers take spend more on advertising lose more. Uber need another trick.


Well that's part of it I believe investors are going to move everyone in charge out.

It's rather turn a profit or shut the company down. Which one you think will happen over the next decade?



No Prisoners said:


> 1s. uber already with $3+ billion in junk bonds at 8.5%+ interest. Highly unlikely anyone would buy any further bond offering. There's no growth, actually growth receding as per IPO filing.
> 
> 2nd. IPO capital of approximately $8 billion won't last 3 years at current burn rate. No more VC capital subsidy after IPO. Only one left subsidizing uber is drivers
> 
> ...


So do you believe Uber will shut down or turn a profit? The real world dictates one must happen.


----------



## No Prisoners (Mar 21, 2019)

Fundamental economics uber's textbook bankruptcy candidate. No assets, no intellectual property, Permatemp labor force 100% disgruntled, no real client base without subsidy, no cash flow thus no hopes for additional capital, no path to profitability as its own admission in IPO filing. 
However, uber has a trove of data on passengers. That's very valuable and could be monetized. 
Uber doesn't have enough capital to last until autonomous vehicles reach level 5, probably 10 to 15 years, provided regulatory agencies allow. 
I've said several times that NO company is sustainable with a model that relies on fares as revenue streams. Impossible to generate free cash flow with human drivers.
Eventually another player with a sustainable model will come in an take over uber's data. 
Nevertheless, uber lyft are not sustainable.


----------



## Roadmasta (Aug 4, 2017)

TheDevilisaParttimer said:


> I believe Uber will be profitable or at least break even within 5 years.
> 
> They will keep dropping drivers pay and ease back on rider promotions. Then they will start to require all drivers purchase their own commercial insurance.
> 
> Next they will roll out a robust loyalty rewards program for riders to shore up their customer base.


You got it backwards, they need to keep drivers, 4% of drivers stay more than a year. No more cutbacks would keep drivers. Need not worry about getting more customers. If they don't use Uber by now they most likely won't. Cut back on incentives for riders and give more to drivers. Raise rates slowly and retain what they have. If they get rid of surge multiplier in my market I'm gone like the wind.


----------



## tohunt4me (Nov 23, 2015)

No Prisoners said:


> Uber lyft both hype and hope enterprises. Only assets they have its data collected. Nothing else. Both companies cash flow negative without any path to profitability. They will burn through IPO capital in less than 2 years so they're probably already trying to raise more junk debt.


Chapter 11 Right Out the Starting Gate !


----------



## Lee239 (Mar 24, 2017)

How does it not have a cash flow when it takes the first $3 of every ride, 25% of the fare and any amount over the 75% they have to pay the driver that they charged for. It has cash flow it's just negative because they are crooks and stupid


----------



## Kodyhead (May 26, 2015)

everythingsuber said:


> The previous was about 2.6 billion before Uber did the focus on rebrand. Getting drivers replaced takes up the significant preportion of spend on advertising. That will show in the next lot of figures for advertising spend though.


My bad I interpreted it as how much the spent this year, I guess it makes more sense over the life of the company


----------

