Uber (UBER) 🤖 🚕 - Share Chat

In Southeast Asia, ride hailing “startups” like Grab (Uber gave up its business there for a major stake in Grab) and GoJek also provide e-payments. They have essentially become super apps. You preload the app with money and use it as a cash card—get rewards in return. In Indonesia, GoJek became a bank for millions of unbanked people. I have used both and it makes sense there. Uber seems to be copying them. But will it work in the West?

I also went once to a presentation by an ex-Nasa (I think) guy who is leading Uber Air. I think he was talking about flights between San Jose and San Francisco. But can that, as well as the Level 5 fully self-driving project, save the company. The latter was a priority for the previous CEO but is very hard to implement nationally, even for Alphabet’s Waymo.

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Yeah, it looks like it’ll be in Dallas, LA and an international city.

Very interested to see which city that is.

https://www.uber.com/us/en/elevate/cities/

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Earnings call is coming on Thursday. :eyes:

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Uber Eats :taco::

  • Uber Eats strengthens marketplace liquidity: In Q2 2019, Uber Eats Monthly Active Platform Consumers (MAPCs) grew over 140% year-over-year. Over 40% of new Eats consumers had never used Uber’s platform before. Uber Eats restaurant selection continues to improve, reaching 320,000 restaurant partners at the end of Q2 2019. New delivery fees (service and small-basket fees) resulted in improved Adjusted Net Revenue take rates quarter-over-quarter.

Self-driving thing :taxi::

  • Advanced Technologies Group (ATG) makes technological progress: We unveiled our first production car capable of self-driving with Volvo’s newest XC90 SUV, which is designed with a chassis ready to integrate ATG’s self-driving system direct from the factory.

Overall, a crappy quarter for a potentially overvalued business but who knows.

Massive paper losses (net loss) and cash burn on the operating side (negative 1.6 billion US$ in 6 months):

Full 2Q 2019 report here (Form 10-Q):
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/bd9b0094-72bd-4c11-ba7f-3b9eeae9ebe2.html

Good news though if you’re a property agent in the Bay Area - seasoned Slack, Lyft and Uber employees are looking for new homes.

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They give away good free swag to software engineers, I’d give them 5 stars just for that.

Driver classification

There are new developments that are kind of important for Uber, Lyft and all the other gig-economy companies that have massive operations in the US.

These tech (or “tech”) companies made it convenient—and sometimes cheaper—for its users to get a taxi or have food delivered.

Remove the friction out of the equation.

On the other side of the transactions were the providers of services who got paid less than the market. Uber and others would incentivise drivers to fill the streets by paying them bonuses.

But we, as users, always got the better end of the deal.

Meanwhile, valuations of these startups ballooned. And also thank you SoftBank Vision Fund.

And if you have ever asked Uber drivers about bonuses from Uber, you have probably regretted asking them about Uber bonuses. They used to be higher and SoftBank and other investors may have paid for that form of ride subsidy.

This study from EPI says average pay of Uber drivers is USD 9.21 an hour:

The Uber driver W-2 equivalent hourly wage falls below the mandated minimum wage in the majority of major Uber urban markets

This revised study by MIT—as reported by Inc—says the medium pay is about USD 10 an hour.

Forty-one percent of drivers made less than their state’s minimum wage and 4 percent lost money.

If Uber or Lyft or who-else starts paying their drivers normal wages plus “unpaid fair wages”, what do you think will happen to General & Administrative or Operations & Support expenses (see below):



(from the S-1 filings)

Neither Uber nor Lyft were (are?) making an operating profit (as in, with a plus sign next to it) before you could even adjust it for weird items and depreciation/amortisation (to make it an “EBITDA” that analysts like talking about).

Lyft warned under Risk Factors in its S-1 pre-IPO filing what would happen to its business if it has to classify drivers as employees—monetary exposure, claims, claims, charges, other claims…:


Always read the Risk Factors section.

AB5

On Friday, California state senators on the appropriations committee voted for Assembly Bill 5 — a bill designed to improve the livelihood of gig economy workers at companies like Uber and Lyft, whose business models depend on independent contractors who often suffer inconsistent wages and little or no benefits.

The vote brings the bill one step closer to becoming a law, one which has the potential to completely remake California’s gig economy to make it more equitable for workers. Lawmakers voted 5-2 to send the bill to the Senate floor, which will be the final vote.

(Source — Salon)

In the S-1 filing pre-IPO, Uber warned that:

It will also fundamentally change Uber and Lyft. Uber phrases it this way: the bill would “drastically change the rideshare experience as you’ve come to know it, and would limit Uber’s ability to connect you with the dependable rides you’ve come to expect.”

If this sounds like a dire prediction, it’s meant as such. Uber and Lyft are facing an existential threat in AB5. And they’re losing.

(Source - The Verge)

…the companies have all but accepted that AB 5 will pass and the governor will sign it. Their focus is now on a second bill that creates an alternative employment category for gig workers.

(Source - LA Times):

but

… Gonzalez predicted a separate bill would fail because the labor movement is divided. “I will fight against any third classification of workers,” she said, adding she has “not heard one thing from any of my colleagues about exempting the gig economy.”

(Source - LA Times)

What’s that other bill?

The ride-hailing companies said Thursday they will commit $60 million to fund a statewide initiative aimed at the 2020 ballot to create an alternate classification for drivers that would include some employee protections and a guaranteed minimum pay. Later, delivery service DoorDash said it would commit an additional $30 million.

(Source - LA Times)


(Source - Lyft S-1 filing)

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uber still says its drivers aren’t employees:

  • California lawmakers passed a landmark bill on Wednesday that threatens to reshape how companies like Uber and Lyft do business.
  • The legislation, known as Assembly Bill 5, would require gig economy workers to be reclassified as employees instead of contractors.
  • The bill has received support from California Gov. Gavin Newsom and would go into effect Jan. 1, 2020.
  • Uber on Wednesday argued that the law would not apply to its business.

The bill has the potential to change the employment status of more than 1 million low-wage workers in California, not just gig workers at companies like Uber, Lyft, DoorDash, Postmates and Instacart. It will make it harder for gig economy companies to prove that their workers aren’t staff, while ensuring key benefits and protections, like minimum wage, insurance and sick days.

Source - CNBC

Uber slides:



Source - Code 2019 conf

via @saf

This is why startups should list directly.

The proposals from US banks suggested Uber seek a valuation much higher than the $76bn it was valued at in August during its most recent fundraising round.

Current market cap is $50.5 billion.

Uber used to be perceived as a cool company with a tech vision.

Now it’s just a boring company with a fading decal on the laptop that says “self-driving and flying cars and other bets”:

Bicycles, scooters, helicopter rides, groceries… Growth through acquisitions when the core business is stalling is a :triangular_flag_on_post:.

Edit—UPDATE:

More layoffs at Uber.

Expecting some highly-skilled people in the self-driving car “ATG” division to start jumping ship because of the value of stock options and morale. There’re plenty of companies there working on the same challenges, including Lyft’s “Level 5”.

This flying car thing is still in the works though:

Wouldn’t touch Uber with a barge pole right now, until they can put together a proper case for profitability. At the end of the day it doesn’t matter how much you are growing revenues if your losses are growing in tandem! Eventually that investor money is going run out.

That being said, these guys have been a real game changer in terms of how we use taxis in most cities and one would have thought there was a sensible business model lying underneath all of the hype and dot-com-bubble reminiscent madness. I’ll be keeping a bit of a watch on them but i wont be going near until they start showing signs of heading towards being cash flow positive!

So the stock lockup will be ending next week, there will probably be a massive sell off. The only issue is there is very little volume in the markets right now so there may be an issue with liquidity. After all there needs to be buyers if someone is selling and where are they all going to come from?

e-Scooters are pure tech. Just like Uber. And Uber and Lyft run e-scooter businesses. Also - bikes. All of which need to be constantly maintained. That’s the opposite of a having scalable software-based business.

Yesterday The Information reported that Lime, an American scooter unicorn, expects to post an operating loss of over $300 million against gross revenue of around $420 million. The same report also details select unit economic data that we’ll examine.

The Lime news is not the first expected or reported scooter-induced loss that we’ve covered this year. Recall that Bird, a key Lime rival, posted a roughly $100 million lossagainst $15 million in revenue during the first quarter; the loss was boosted by a writeoff and the revenue hit by seasonality making the ensuing deficit appear worse than it might under less irksome circumstances.

Instead, after rocketing into the unicorn club — a private valuation of $1 billion is all you need for entry — Lime and Bird have managed continued growth, but haven’t yet beat back skepticism regarding their business model.

It’s going to take a pretty penny for Lime to get there if it can. Bird is in the same boat. Crunchbase data indicates that Bird has raised $275 million to date. Lime an even more impressive $765 million. That’s well north of $1 billion between the two firms. Capital that has likely largely been spent.

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Market cap: USD 52 billion.

Uber’s stock lockup is also set to expire this week, meaning many employees will likely be cashing in their shares soon. On the call with analysts, CFO Nelson Chai said the company has had “good and constructive dialogue with long term shareholders,” but ultimately doesn’t know what will happen to the stock on Wednesday.

Who’s all buying long? :raising_hand_man:t3:

Been watching Uber since the IPO, think I’ll take the plunge now

Abandon the ship, sort of. Travis apparently still sits on Uber’s board.

CNBC:

Uber’s stock has plummeted to below $27 per share as of Thursday’s opening price since the company debuted in May at $42 per share. The company’s market value is now about $45 billion, down from nearly $70 billion at the end of its first trading day.

Kalanick’s recent sales may indicate his interest in other investments such as CloudKitchens, the entrepreneur’s latest venture.

Great business if you’re a user.

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