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Uber Is Headed For A Crash

http://nymag.com/intelligencer/2018/12/will-uber-survive-the-next-decade.html#comments

"Uber has established a large business in cities over the world. Yes, it’s easy to get a lot of traffic by selling at a discount. Uber is subsidizing ride costs. Across all its businesses, Uber was providing services at only roughly 74 percent of their cost in its last quarter. Uber was selling its services at only roughly 64 percent of their cost in 2017, with a GAAP profit margin of negative 57 percent. As a reference point, in its worst four quarters, Amazon lost $1.4 billion on $2.8 billion in sales, for a negative margin of 50 percent. Amazon reacted by firing over 15 percent of its workers."

"The pay cuts have led to more driver turnover, which leads to higher managerial costs. And it is degrading service quality. A comment on an article about Uber’s third-quarter earnings:"

"I needed a ride from Burbank to LAX on a Thursday morning around 5:45 AM. I requested a car the night before. At pickup time there wasn’t a Lyft or Uber within 20 miles. When I did get one the driver said that at the rate they are being paid it wasn’t worth getting out of bed early anymore."

The more I read these articles, the happier I get for pulling out last week. Thoughts?
 

Lee239

Well-Known Member
http://nymag.com/intelligencer/2018/12/will-uber-survive-the-next-decade.html#comments

"Uber has established a large business in cities over the world. Yes, it’s easy to get a lot of traffic by selling at a discount. Uber is subsidizing ride costs. Across all its businesses, Uber was providing services at only roughly 74 percent of their cost in its last quarter. Uber was selling its services at only roughly 64 percent of their cost in 2017, with a GAAP profit margin of negative 57 percent. As a reference point, in its worst four quarters, Amazon lost $1.4 billion on $2.8 billion in sales, for a negative margin of 50 percent. Amazon reacted by firing over 15 percent of its workers."

"The pay cuts have led to more driver turnover, which leads to higher managerial costs. And it is degrading service quality. A comment on an article about Uber’s third-quarter earnings:"

"I needed a ride from Burbank to LAX on a Thursday morning around 5:45 AM. I requested a car the night before. At pickup time there wasn’t a Lyft or Uber within 20 miles. When I did get one the driver said that at the rate they are being paid it wasn’t worth getting out of bed early anymore."

The more I read these articles, the happier I get for pulling out last week. Thoughts?
The difference is Amazon fired workers. Uber doesn't need to fire workers because they don't employ them, the workers provide, labor, car and gas for the company and work for crumbs.
 

Ant42

Member
"No ultimately successful major technology company has been as deeply unprofitable for anywhere remotely as long as Uber has been."

Twitter is across 10th from Uber and it took 12 years to make a profit. Tesla took ~15 years to make a profit.

However, I do agree with many of the other sentiments in the article.
 

Kodyhead

Well-Known Member
Explain to me how high turnover leads to higher managerial costs unless they are talking about actual uber employees and not drivers
 

Ant42

Member
Explain to me how high turnover leads to higher managerial costs unless they are talking about actual uber employees and not drivers
They need people to sign-up the drivers, vehicle inspections, people to do background checks, etc. If there is a high turnover in drivers that means more work on the frontline.
 

Lee239

Well-Known Member
"No ultimately successful major technology company has been as deeply unprofitable for anywhere remotely as long as Uber has been."

Twitter is across 10th from Uber and it took 12 years to make a profit. Tesla took ~15 years to make a profit.

However, I do agree with many of the other sentiments in the article.
They aren't a tech company where you have to think where and how do they make money like Twitter and Facebook, they are a taxi company and everyone knows they should be making money, especially how they continually cheat the drivers and overcharge the pax.

They need people to sign-up the drivers, vehicle inspections, people to do background checks, etc. If there is a high turnover in drivers that means more work on the frontline.
A lot of that is automated. Even before with customer service as a driver they only responded thru text and it took the workers in India who are paid peanuts, even less peanuts than the drivers here a minute or less to respond via a text message.

Plus a lot of that is automated. Background checks don't cost them more, they pay a flat rate to have a company do them, not per person. A lot of other things are automated too. Also in many parts of the country that are not as busy they don't even have greenlight hubs, you just take a photo of your car for inspection.

Don't you think if it cost them more than a few hours pay that a driver gives them when they start to hire new drivers that they would try harder retain drivers?
 

peteyvavs

Well-Known Member
Uber’s management doesn’t care, these people are making 6 and 7 figure incomes, while we the driver peons get screwed every couple of months.
 

Stevie The magic Unicorn

Well-Known Member
Explain to me how high turnover leads to higher managerial costs unless they are talking about actual uber employees and not drivers
Higher costs in onboarding drivers,

If they turn over 12% of their drivers every month they need to do background checks on 12% of drivers who won't last a year.


By that math they need to do "annual" background checks on over 144% of their workforce every year.
 

peteyvavs

Well-Known Member
Higher costs in onboarding drivers,

If they turn over 12% of their drivers every month they need to do background checks on 12% of drivers who won't last a year.


By that math they need to do "annual" background checks on over 144% of their workforce every year.
Yep that is correct, now explain that to Uber management, they don’t have a clue.
 

UberBastid

Well-Known Member
Employee turnover is a big cost to business.
So is contractor and sub-contractor turnover.
It does cost less, but it is still a cost and its not small.

The company that I work for now is a good example.
They are very profitable - margins are obscene. But they are spending way way more than they should on payroll and contractor costs and the work produced per worker was the lowest I ever seen.
I went to a couple of department managers and asked why; and the answers were surprisingly similar. One manager said he spent about half of his time training new people; then about the time they figure out the job - they leave for greener pastures.
I asked what made the pastures greener than ours and she replied "Money, of course. What else? Isn't that why we all work?"
A lab tech, BA in sciences, one year experience makes between $50k and $60k per year in our marketplace. We are paying $46,500. The quality of person we get = not so good. The longevity = not so good. We are getting what we pay for, and it is causing delays in delivery and poor quality control. This will eventually show up in the bottom line, as customers will notice - and leave.
I did some research, talked to a couple of recruiting firms and, eyup, that was the thing. Money. We were paying 20% to 40% less for the same skills package as our competition.

Day before yesterday I presented my study to the board with recommendations to increase pay across the board 10% RFN, and schedule another 10% on June 1 of this year for all non-management employees and contractors. I project this will decrease our overall expenses by at least 7% the first year.
 

peteyvavs

Well-Known Member
Employee turnover is a big cost to business.
So is contractor and sub-contractor turnover.
It does cost less, but it is still a cost and its not small.

The company that I work for now is a good example.
They are very profitable - margins are obscene. But they are spending way way more than they should on payroll and contractor costs and the work produced per worker was the lowest I ever seen.
I went to a couple of department managers and asked why; and the answers were surprisingly similar. One manager said he spent about half of his time training new people; then about the time they figure out the job - they leave for greener pastures.
I asked what made the pastures greener than ours and she replied "Money, of course. What else? Isn't that why we all work?"
A lab tech, BA in sciences, one year experience makes between $50k and $60k per year in our marketplace. We are paying $46,500. The quality of person we get = not so good. The longevity = not so good. We are getting what we pay for, and it is causing delays in delivery and poor quality control. This will eventually show up in the bottom line, as customers will notice - and leave.
I did some research, talked to a couple of recruiting firms and, eyup, that was the thing. Money. We were paying 20% to 40% less for the same skills package as our competition.

Day before yesterday I presented my study to the board with recommendations to increase pay across the board 10% RFN, and schedule another 10% on June 1 of this year for all non-management employees and contractors. I project this will decrease our overall expenses by at least 7% the first year.
The board heard your concerns and decided they can save money by eliminating your job, welcome to Uber full time.
 
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