<story><title>Uber, losing billions, freezes engineering hires</title><url>https://arstechnica.com/cars/2019/08/uber-freezes-engineering-hires-amid-mounting-losses/</url></story><parent_chain><item><author>futureastronaut</author><text>&amp;gt; (2) It&amp;#x27;s arguably the most valuable battleground in logistics - developing a &amp;quot;last mile&amp;quot; delivery network at scale.&lt;p&gt;How is Uber Eats any different from the many other operations strapping boxes to the backs of bicyclists? I don&amp;#x27;t see anything innovative about Uber&amp;#x27;s last mile logistics compared to Amazon (who aren&amp;#x27;t even that great) for instance.&lt;p&gt;It sounds more like an excuse Uber&amp;#x27;s leadership would make as they desperately search for profitable business.</text></item><item><author>aresant</author><text>The sentiment on UBER recently is that they are only surviving by subsidizing rides and are out of control &amp;#x2F; there&amp;#x27;s no future business there.&lt;p&gt;But that is not an accurate portrayal, here&amp;#x27;s what&amp;#x27;s going on when you look at their un-editorialized results (1):&lt;p&gt;- Headlines have portrayed UBER as losing $5b this quarter. This is the easy one to address as this article touches on - UBER paid out almost $4b in stock based compensation (one time, due to IPO) that inflated their loss number. The more accurate portrayal is that UBER burned ~$1.2b this quarter on operations.&lt;p&gt;- Of their remaining $1.2b operating loss almost 50% of that is from UBER eats subsidies. They paid $544m more to drivers to deliver food than they took in. Why? (a) It is their fastest growing (by %) division (2) It&amp;#x27;s arguably the most valuable battleground in logistics - developing a &amp;quot;last mile&amp;quot; delivery network at scale.&lt;p&gt;- Their core business - ridesharing - has improved their gross margin and unit economics quarter-over-quarter to the point that the discounting is almost non-material (less than $22m total worldwide this quarter, representing less than 1&amp;#x2F;2 a percent of total ride sharing revenue).&lt;p&gt;- They have &amp;gt;25,000 employees and &amp;gt;50% of those are international in new markets that require heavy HR spending. Their move to clip 400 marketing employees (25% of entire division) last month implies the CEO has confidence that there is a lot of fat in employee base.&lt;p&gt;- Add to that other losses in their &amp;quot;other bets&amp;quot; which is almost certainly their freight brokering network at -$50m, and the losses appear to be diminishing.&lt;p&gt;(1) &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;investor.uber.com&amp;#x2F;news-events&amp;#x2F;news&amp;#x2F;press-release-details&amp;#x2F;2019&amp;#x2F;Uber-Reports-Second-Quarter-2019-Results&amp;#x2F;default.aspx&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;investor.uber.com&amp;#x2F;news-events&amp;#x2F;news&amp;#x2F;press-release-det...&lt;/a&gt;</text></item></parent_chain><comment><author>Marazan</author><text>There is no &amp;quot;last mile delivery network at scale&amp;quot;.&lt;p&gt;Well there is, its called the postal system but there sure as heck isn&amp;#x27;t any just-in-time last mile network &amp;quot;at scale&amp;quot;. You just have fuck tonnes of delivery drivers who need to get paid. There is no magic &amp;quot;at scale&amp;quot; wand to wave over it to make it economically viable.&lt;p&gt;The excuses for Uber losing money is getting jaw dropping now.</text></comment>
<story><title>Uber, losing billions, freezes engineering hires</title><url>https://arstechnica.com/cars/2019/08/uber-freezes-engineering-hires-amid-mounting-losses/</url></story><parent_chain><item><author>futureastronaut</author><text>&amp;gt; (2) It&amp;#x27;s arguably the most valuable battleground in logistics - developing a &amp;quot;last mile&amp;quot; delivery network at scale.&lt;p&gt;How is Uber Eats any different from the many other operations strapping boxes to the backs of bicyclists? I don&amp;#x27;t see anything innovative about Uber&amp;#x27;s last mile logistics compared to Amazon (who aren&amp;#x27;t even that great) for instance.&lt;p&gt;It sounds more like an excuse Uber&amp;#x27;s leadership would make as they desperately search for profitable business.</text></item><item><author>aresant</author><text>The sentiment on UBER recently is that they are only surviving by subsidizing rides and are out of control &amp;#x2F; there&amp;#x27;s no future business there.&lt;p&gt;But that is not an accurate portrayal, here&amp;#x27;s what&amp;#x27;s going on when you look at their un-editorialized results (1):&lt;p&gt;- Headlines have portrayed UBER as losing $5b this quarter. This is the easy one to address as this article touches on - UBER paid out almost $4b in stock based compensation (one time, due to IPO) that inflated their loss number. The more accurate portrayal is that UBER burned ~$1.2b this quarter on operations.&lt;p&gt;- Of their remaining $1.2b operating loss almost 50% of that is from UBER eats subsidies. They paid $544m more to drivers to deliver food than they took in. Why? (a) It is their fastest growing (by %) division (2) It&amp;#x27;s arguably the most valuable battleground in logistics - developing a &amp;quot;last mile&amp;quot; delivery network at scale.&lt;p&gt;- Their core business - ridesharing - has improved their gross margin and unit economics quarter-over-quarter to the point that the discounting is almost non-material (less than $22m total worldwide this quarter, representing less than 1&amp;#x2F;2 a percent of total ride sharing revenue).&lt;p&gt;- They have &amp;gt;25,000 employees and &amp;gt;50% of those are international in new markets that require heavy HR spending. Their move to clip 400 marketing employees (25% of entire division) last month implies the CEO has confidence that there is a lot of fat in employee base.&lt;p&gt;- Add to that other losses in their &amp;quot;other bets&amp;quot; which is almost certainly their freight brokering network at -$50m, and the losses appear to be diminishing.&lt;p&gt;(1) &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;investor.uber.com&amp;#x2F;news-events&amp;#x2F;news&amp;#x2F;press-release-details&amp;#x2F;2019&amp;#x2F;Uber-Reports-Second-Quarter-2019-Results&amp;#x2F;default.aspx&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;investor.uber.com&amp;#x2F;news-events&amp;#x2F;news&amp;#x2F;press-release-det...&lt;/a&gt;</text></item></parent_chain><comment><author>threeseed</author><text>Uber Eats like Uber ride sharing are marketplace businesses.&lt;p&gt;In order for a new entrant to come in they need to grow both businesses and consumers at the same time. Which is hard with no competitors. But very hard with cash rich companies like Uber trying to stop you.&lt;p&gt;We saw this all play out in Australia where we initially had Foodora and Deliveroo. Then Uber joined with aggressive marketing and pricing. They pushed Foodora out and the number of businesses in Deliveroo is dropping. It is going to be a winner take all situation. At which point prices will rise and the profits will roll in.</text></comment>