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Confidential Uber docs reveal company lost $1 Billion in first 6 months of 2015

What do you think the chances are for Uber's long term survival?

  • The are going to be #1 forever

    Votes: 0 0.0%

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    21

JohnF

Active Member
http://roadwarriorvoices.com/2016/01/18/confidential-uber-docs-reveal-company-lost-1-billion-in-first-6-months-of-2015/

By: Kevin Farrell | January 18, 2016 2:30 pm

Leaked documents prepared by Uber, but never meant for the public’s eyes, reveal the company lost a staggering $987.2 Million in the first six months of 2015. That figure is nearly 50% larger than Uber’s entire annual losses for 2014.

But just as the on-demand car service company’s losses grew from year to year, so has its gross earnings. Between just the first and second quarters of 2015, Uber’s gross bookings exploded from $1.5 Billion to $2.13 Billion, Tnooz reports. So where is all of that cash going, and why isn’t Uber able to hold onto any of it? The short answer, to at least the first part of that question, is China and India. Expansion is expensive, increasingly so as competitors spring up in countries all over the world.

But don’t shed too many tears for Uber. Even in the face of mounting expenses, the company is still sitting on a mountain of money, to the tune of billions of dollars. At the time these documents were prepared, Uber reported $4 Billion in the bank, with a projected $14 Billion in earnings over the next four years. Where the company guesses its break-even point falls on that timetable is anyone’s guess.

Uber’s massive $62 Billion valuation is based largely on that speculative earning potential. But some worry that the company’s rose-colored projections aren’t taking into account possible monkey wrenches in the form of government regulations, especially in the area of workers’ rights reforms.

In December, a judge expanded the base of a potential class action lawsuit against the company by its own drivers, who argue that they ought to be considered employees — with benefits, mileage reimbursement and all — instead of the current independent contractor classification Uber has used since day 0ne. Such a transition would likely decimate Uber’s financial projections, and casts doubt about the company’s longterm profitability.
 

RightTurnClyde

Well-Known Member
These stories always eerk me. Uber is NOT losing money, it's simply operating in the red for its own gain. Think about it, ALL THOSE MILLIONS OF RIDES generating a MASSIVE revenue stream with very very low overhead. Money is only lost when you do not get a equal return value for the money you lost. Also, you can't lose something when you are the one deciding where to put it. Discounts / free rides to pax is all in order to GAIN market share and dominate the industry; and in that is tremendous VALUE. This "loss" is something that Uber itself is in total control of i.e. Uber intentionally drives its revenue in the red. At this very moment, if they decided they're pleased with with their efforts for expansion and are dominant enough not to be realistically bothered by competitors, all that cash would go directly to the bank and you would see the real revenue they can produce. As it stands, with constant cash infusion from big name players and the obvious tax benefits from playing the game in the red, Uber is just doing what benefits them the most. It's intentional, it's smart, and it's very well thought out.
 

Bart McCoy

Well-Known Member
Actually we have to wait and see. Seems the way uber works it should be able to easily make profit with the overhead. What the hell are spending all their revenue on?

As mentioned in the article, if regulations nation and worldwide catches up to Uber, Uber fails
 

sellkatsell44

Well-Known Member
Moderator
These stories always eerk me. Uber is NOT losing money, it's simply operating in the red for its own gain. Think about it, ALL THOSE MILLIONS OF RIDES generating a MASSIVE revenue stream with very very low overhead. Money is only lost when you do not get a equal return value for the money you lost. Also, you can't lose something when you are the one deciding where to put it. Discounts / free rides to pax is all in order to GAIN market share and dominate the industry; and in that is tremendous VALUE. This "loss" is something that Uber itself is in total control of i.e. Uber intentionally drives its revenue in the red. At this very moment, if they decided they're pleased with with their efforts for expansion and are dominant enough not to be realistically bothered by competitors, all that cash would go directly to the bank and you would see the real revenue they can produce. As it stands, with constant cash infusion from big name players and the obvious tax benefits from playing the game in the red, Uber is just doing what benefits them the most. It's intentional, it's smart, and it's very well thought out.
I've always thought whoever first thought of those mobile games that are free but have "purchases" for gems ands such is ingenious. Loads of purchases for things that are not tangible.

Not quite the same as uber using u guys to shoulder majority of the overhead but it just always makes me think of pocket gem or king or supercell.

I'll tell you where all the money's going. .
Into the pockets of politicians, who eventually will get caught.
do they? I'm always so cynical.
 

Execucorp

New Member
I just thought about it, how could Uber be losing money, they're basically selling air, we drivers are free to them they get 20-25% charging us, the customer pays them, they get a all those safe ride fees, every second of everyday, just to tell you where to pickup and drop off.. they basically sold nothing and made billions.
 

sellkatsell44

Well-Known Member
Moderator
I just thought about it, how could Uber be losing money, they're basically selling air, we drivers are free to them they get 20-25% charging us, the customer pays them, they get a all those safe ride fees, every second of everyday, just to tell you where to pickup and drop off.. they basically sold nothing and made billions.
It's not just that easy to "tell you where to pickup and drop off"

ubers app isn't easy to duplicate and maintain but if you can, by all means, come out with one to compete with uber. That's where a good chunk goes.

Keeping a staff to run the business isn't easy either and even though they've gone from paying their reps (if I recall wonder woman's post correctly) a fairly substantial rate (as opposed to minimum wage) to a little above minimum--that's still money they're spending.

Then there is the marketing and expansion team. The legal team. The fraud analysts team...

it takes $$$$ to run a business, even one of ride shares. How they run it, and where they choose to sink their money, how much, etc, I can see the argument of where it can be greatly improved.

its just crazy how companies can lose so much money and just keep mooching money off the super rich
The super rich does not become super rich, and stay super rich, without doing some due diligence and having the faith that the business model will take off. Having meet said investors (private and ones who are angel investors); fools they aren't. That said, if it's the super rich losing the money, it has to go somewhere right? Where does the money go? If it's the execs spending the money and putting it back into society; I don't see that being the worst thing that could happen to the super riches money. Worse is them hoarding it, and the resources along with it.
 
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