What is their cost? With the exception of software and IT, what is their overhead? It seems everyone knows and uses it. What's the issue with this company?

50% margins with 30% marketing and 20% G&A leaves no room for profit. Eventually they can get R&D/Marketing down, but the industry is too competitive at this point.

How do they market? I haven't noticed I guess.

The ride shares are in a price race to the bottom trying to get market share.

Do the drivers really only get 50%?

If they have enough users then they can profitable, surprised they haven't reached the needed scale yet to cover marketing and app maintenance.

bmks270 said:

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How do they market? I haven't noticed I guess.

The ride shares are in a price race to the bottom trying to get market share.

Do the drivers really only get 50%?

If they have enough users then they can profitable, surprised they haven't reached the needed scale yet to cover marketing and app maintenance.

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Marketing would include their incentives to riders and drivers. They lose massive amounts of money with new riders and even with recurring riders. I use Uber a lot and still get offers such as 10-20% off my next 10 rides. Being that they still need to pay the drivers on the full fare, it doesn't leave much room (if any) for profit.

queso1 said:

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What is their cost? With the exception of software and IT, what is their overhead? It seems everyone knows and uses it. What's the issue with this company?

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Why don't you go read the S-1 and let us know?

bmks270 said:

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How do they market? I haven't noticed I guess.

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I couldn't count how many 40% off rides me and the wife got last year. Perhaps 20 or so. Pretty much every ride we got for about 3 or 4 months

bmks270 said:

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How do they market? I haven't noticed I guess.

The ride shares are in a price race to the bottom trying to get market share.

Do the drivers really only get 50%?

If they have enough users then they can profitable, surprised they haven't reached the needed scale yet to cover marketing and app maintenance.

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I don't know anything about their financials but I asked a driver recently and he mentioned Uber takes 30%.

jamey said:

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bmks270 said:

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How do they market? I haven't noticed I guess.

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I couldn't count how many 40% off rides me and the wife got last year. Perhaps 20 or so. Pretty much every ride we got for about 3 or 4 months

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Where do I find these promotions? Email? Website?

bmks270 said:

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jamey said:

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bmks270 said:

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How do they market? I haven't noticed I guess.

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I couldn't count how many 40% off rides me and the wife got last year. Perhaps 20 or so. Pretty much every ride we got for about 3 or 4 months

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Where do I find these promotions? Email? Website?

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They just pop up in your account, not really sure how they target who they do. I've gotten plenty of 10-20% from them and lyft here in denver. The fine print is usually only valid in large cities, which is kind of annoying since i go to fort collins and use it there enough to know you wont get the discount.

Also for the marketing question, go to a stadium or anywhere people may want a ride to and fro and you'll see an add for lyft/uber. I think they pay more to exclusively show one brand. I know the pepsi center is all lyft marketing.

PeekingDuck said:

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bmks270 said:

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How do they market? I haven't noticed I guess.

The ride shares are in a price race to the bottom trying to get market share.

Do the drivers really only get 50%?

If they have enough users then they can profitable, surprised they haven't reached the needed scale yet to cover marketing and app maintenance.

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I don't know anything about their financials but I asked a driver recently and he mentioned Uber takes 30%.

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It's not a set percentage, it can be anywhere from 50% to 0% (or less, Uber actually loses money on some rides). I would guess the average is closer to 35% these days.

bmks270 said:

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jamey said:

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bmks270 said:

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How do they market? I haven't noticed I guess.

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I couldn't count how many 40% off rides me and the wife got last year. Perhaps 20 or so. Pretty much every ride we got for about 3 or 4 months

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Where do I find these promotions? Email? Website?

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As others said they just sort of pop up in the account.

I suspect we were targeted for lack of use because we had a 2 yr old that was getting sick so we didnt go out as much


Uber may have thought we were using Lyft or some other service. Might try using Lyft for a while and see what happens

My sister worked for their Uber Eats division a few years ago, briefly. She absolutely hated it. Terribly run company (at least at the time). Their overriding philosophy seemed to be, if you have an idea, any idea, tell us and we'll throw money at it. If it turns into something profitable, great! If not, and it bombs and we lose money on it, so be it.

That's just what she always conveyed to me...

In biology that is called the k vs r reproduction strategy.

In business, it is called portfolio management strategy and when done correctly
and somewhere in the middle is the best approach.

The kicker is "done correctly "

Profitability slows growth. Growth and revenue drive valuation. No need to try and be profitable.

Interesting on the discount discussion. Uber pissed me off due to a CC fraud issue and I switched to Lyft. I had 500 rides with Uber at that point. They've done NOTHING to try and get me back.

I could massively transform Uber or Lyft for the better. First thing I'd do is ditch 5 star ratings and change it to "Would you ride with this driver again?" If the answer is No, you never get paired (not that it happens often) and ratings become much more accurate.

Rate your driver a 3* or less and you will never get them again.


My suggestion would be a minimum star rating/# of rides driven I'm willing to ride with.

I want someone with 20+ rides (knows the app and isn't going to screw something up) and a rating of over 4.8. I'm willing to wait an extra few minutes for better drivers. I immediately cancel anyone that has less than a 4.7.

Didn't know that, but I still think the Yes/No would drive more accurate ratings. People too often just go 5 stars or don't rate.

Another thing I'd do is add ability to rank car types. I'd wait at times longer to not get a Prius!

ORAggieFan said:

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Didn't know that, but I still think the Yes/No would drive more accurate ratings. People too often just go 5 stars or don't rate.

Another thing I'd do is add ability to rank car types. I'd wait at times longer to not get a Prius!

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I typically do the stars like this:

1 for safety
1 for car cleanliness (includes car smelling good)
1 for no obnoxious driver/music
1 for not taking a terrible route
1 for getting to the correct pickup location without me having to guide a driver to it

I sort of wish Uber would ask those questions because 3 of those are directly not the driver and the other 2 possibly fall on Uber... answering all of those questions takes no time and works as a legitimate feedback loop to the driver or Uber. Theoretically it should train drivers to be better.

Aggie09Derek said:

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Rate your driver a 3* or less and you will never get them again.

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I think that's just on Lyft. If Uber does it then it's only for 1*, but I'm not even sure that's automatic without sending in a complaint with your 1*.

What marketing? Serious question.

lockett93 said:

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Uber has spent approximately $1B in self driving car research since 2015. That eats the bottom line fairly quickly.

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I think they are researching aircraft to transport passengers too. Stupid stuff for a company not making $$$.

redd38 said:

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Aggie09Derek said:

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Rate your driver a 3* or less and you will never get them again.

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I think that's just on Lyft. If Uber does it then it's only for 1*, but I'm not even sure that's automatic without sending in a complaint with your 1*.

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I think you may be right. May just be the lyft policy. I like it though because there are plenty of people that deserve 3*''s that I don't want to ride with again and don't want to give them a 1*.

Really wish they would reward top drivers though and let customers choose their minimum ranking. In big cities they allow too many terrible drivers with **** ratings to stay on the road.

Uber loses money just like every other company and individual loses money. Their expenses exceed their revenue.

Sales and marketing expenses consist primarily of compensation expenses, including stock-based compensation to sales and marketing employees, advertising expenses, expenses related to consumer acquisition and retention, including consumer discounts, promotions, refunds, and credits, Driver referrals, and allocated overhead. We expense advertising and other promotional expenditures as incurred.

Uber VIP does a decent job of filtering the more seasoned/higher rated drivers.