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posted by Fnord666 on Saturday November 09 2019, @03:03PM   Printer-friendly
from the somewhat-less-unprofitable dept.

Arthur T Knackerbracket has found the following story:

Uber lost another $1.1 billion in the third quarter of 2019, the company announced on Monday. This wasn't a surprise: Uber lost about the same amount in the first quarter of 2019 and lost even more last quarter.

Yet the company argues that things aren't as bad as that headline figure suggests. To show why, Uber broke its earnings down by business area, distinguishing its core "rides" app from Uber Eats, Uber Freight, and other operations.

Uber says that, if you exclude certain non-operating expenses—mainly interest, depreciation, and stock-based compensation—the "rides" app actually earned a substantial $631 million profit. That's enough to cover the company's core operating expenses, the company said. But Uber's profitability was dragged down by losses in its other businesses—mainly a $316 million loss from Uber Eats.

Of course, interest, depreciation, and stock-based compensation are real costs. So the fact that Uber looks less unprofitable excluding them isn't going to be particularly reassuring to Uber investors.

But the reason these numbers could ultimately be good news for investors is that they suggest Uber's core rides business might not be perpetually money-losing. If the "EBIDTA" profitability of the ride-hailing business continues to improve—it grew from $416 million in the year-ago quarter to $631 million last quarter on an EBITDA basis—the company could eventually reach honest-to-goodness profitability.


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  • (Score: 2) by TheReaperD on Saturday November 09 2019, @07:54PM (6 children)

    by TheReaperD (5556) on Saturday November 09 2019, @07:54PM (#918369)

    Taxis are a racket in the US. Only certain, often politically connected people were allowed to own the rights to run a cab (it's not the driver, that's some schmuck they conned into driving it for pennies on the dollar), called a medallion. There's a limited number of them, regulated by the city government, and all owned by the elite rich that buzzes around city hall. They do not go back to the city to be auctioned when someone wants to get rid of theirs, they are privately traded among the before mentioned group. They had been used as a guaranteed profit center by the political elite until Uber came along. It's why they're so pissed now. Something that has been guaranteed to turn a profit for almost 150 years suddenly isn't and these are the people that have the ear of the city to bitch about it.

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  • (Score: 4, Informative) by hemocyanin on Saturday November 09 2019, @10:22PM (1 child)

    by hemocyanin (186) on Saturday November 09 2019, @10:22PM (#918413) Journal

    (A)... called a medallion... (B)it's not the driver, that's some schmuck they conned into driving it for pennies on the dollar ... [Medallions] had been used as a guaranteed profit center by the political elite until Uber came along.

    A: Is that so for all cities or just a few? I think in most places if you get the right business license you can have a taxi.

    B: Until Uber came along awith an unprofitable business model that also screwed workers even more. Yes, those taxi drivers weren't getting rich, but they were able to earn a basic income that supported life rather than make a few extra bucks on the side as with Uber.

    Basically, Uber is probably just trying to hold on to an unprofitable business model long enough to utterly destroy the taxi industry so it can raise prices to their former rational level AND own the only fucking Medallion in the country, let alone the town.

    • (Score: 2) by TheReaperD on Tuesday November 12 2019, @11:10AM

      by TheReaperD (5556) on Tuesday November 12 2019, @11:10AM (#919314)

      Getting your independent business license to drive a taxi is simple and relatively inexpensive. However, most, if not all cities have a set limit on the number of cabs allowed in the city and you need a special license (the medallions) to have a physical cab in the city. To actually run a cab, you need one of these licenses and they're all owned by private owners and change hands between these private parties. You cannot go to city hall in these cities and get one of these licenses. You have to apply at one of the companies set up by the medallion holders and follow their rules and pay schedules to drive an actual cab.

      A) Damn near all from what I understand. Though I admit that I am not a researcher and haven't done a study on it. My knowledge comes from my ex-girlfriend's dad and an old friend of mine who were both cab drivers. The friend of mine was like me and liked to know everything about everything, especially anything that his paycheck relied on, and researched how the cab industry actually worked.

      B) You won't get any argument from me. Uber does need to be reigned in and forced to pay their drivers a fair wage. Though that taxi industry did need a change, Uber's model isn't an improvement.

      --
      Ad eundum quo nemo ante iit
  • (Score: 2) by Runaway1956 on Sunday November 10 2019, @04:29AM (3 children)

    by Runaway1956 (2926) Subscriber Badge on Sunday November 10 2019, @04:29AM (#918523) Journal

    As hemocyanin points out, not all cities run their taxi services the same way. I suspect that Chicago is probably as corrupt as New York (Chicago, the most corrupt city in the US, allowing New York to out-corrupt them?) But, smaller cities and towns can't compete with the Big Apple.

    We had a taxi service locally, for awhile. It didn't do so well because small town and rural economics just don't support a taxi service. If there was corruption involved, it was probably on tax returns.

    • (Score: 2) by PartTimeZombie on Sunday November 10 2019, @10:31PM (2 children)

      by PartTimeZombie (4827) on Sunday November 10 2019, @10:31PM (#918712)

      Where I live the taxi industry was deregulated in the 1980's.

      Instantly every idiot with a car became a taxi driver and there was chaos for a while.

      Once the police made it clear that if your taxi broke down before it got you where you wanted to go, you didn't have to pay (this only happened to me one time) things began to improve.

      The really dodgy operators went away after a while, and the taxi industry is reasonably good now.

      Uber still manages to undercut taxis on price, and by quite a lot in some cases, so I don't know who is losing money but someone is. Hopefully it's Softbank and the other Uber shareholders.

      • (Score: 3, Insightful) by TheReaperD on Tuesday November 12 2019, @11:24AM (1 child)

        by TheReaperD (5556) on Tuesday November 12 2019, @11:24AM (#919316)

        Good to hear that your city tried to fix the taxi system. Unfortunately, they decided, as many do, that the solution to bad regulation was deregulation rather than reform, thus leading to chaos. Though it seems they learned from their mistakes and put some regulation back in place that made sense. Good for them (and you). Hopefully, their learn from the mistakes of the past when they finally get around to dealing with Uber.

        Almost always, deregulation is not the solution to bad government. Deregulation ends up with chaos, raised prices, corruption and greed in most cases (though not always right away; giving the false impression that it can be good for the economy). Bad government needs to be reformed (and in extreme cases, such as fascist governments and oligarchies, shot), not deregulated.

        --
        Ad eundum quo nemo ante iit
        • (Score: 2) by PartTimeZombie on Tuesday November 12 2019, @08:32PM

          by PartTimeZombie (4827) on Tuesday November 12 2019, @08:32PM (#919535)

          That is almost entirely true.

          There is now a fair bit of regulation on the taxi industry (but not Uber, for some reason) as deregulation did not produce high prices and corruption, but unsustainably low prices and really, really poor service as the barriers to entry were reduced to almost zero.