Non-IT News Thread
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Keep in mind that Uber currently earns $2.22 bn in the same period. So while losing $1bn is a big percentage, it's only so much. It's well within normal ranges of "what you spend to get bigger." If Uber doesn't expand, someone else will move into the markets where they want to operate.
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@scottalanmiller said in Non-IT News Thread:
@dustinb3403 said in Non-IT News Thread:
@mlnews said in Non-IT News Thread:
Uber leaving markets such as SE Asia as they are losing $1bn a quarter.
I can't begin to understand how a business spends 1-billion a quarter for something as simple as ride-sharing. . .
What kind of opex is occurring here?!
This is how businesses work. They get billions in investment, and then they spend that money to grow the business. It's expected that you will lose that money. If they weren't going to lose it, they'd not have made it in the first place.
It is an extremely rare business that can grow using only profits, because if they could, everyone would start zero risk, unlimited growth companies. This is where investments and risk come in.
I get start up risk and reward, but at this level? Uber and the others are simply ride-shares (cheap taxis so to speak). I just don't see how this level of spend, is in the realm of realistic for such a basic service.
Does every Uber include WiFi and drinks and companionship for each customer?!
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@dustinb3403 said in Non-IT News Thread:
@scottalanmiller said in Non-IT News Thread:
@dustinb3403 said in Non-IT News Thread:
@mlnews said in Non-IT News Thread:
Uber leaving markets such as SE Asia as they are losing $1bn a quarter.
I can't begin to understand how a business spends 1-billion a quarter for something as simple as ride-sharing. . .
What kind of opex is occurring here?!
This is how businesses work. They get billions in investment, and then they spend that money to grow the business. It's expected that you will lose that money. If they weren't going to lose it, they'd not have made it in the first place.
It is an extremely rare business that can grow using only profits, because if they could, everyone would start zero risk, unlimited growth companies. This is where investments and risk come in.
I get start up risk and reward, but at this level?
Less than 50% of revenue. That's not a high level.
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@dustinb3403 said in Non-IT News Thread:
Uber and the others are simply ride-shares (cheap taxis so to speak). I just don't see how this level of spend, is in the realm of realistic for such a basic service.
I think that there is a massive disconnect here. What Uber does is insanely expensive. The scale of the tech, infrastructure, legal, marketing, sales, training, local coordination needed, plus R&D... there is a reason no one else did this for so long. This is one insanely expensive business to be in. The costs of being in just a single city is staggering. The amount of licensing and other needs are just crazy.
Simple is the last thing you can use to describe Uber.
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@scottalanmiller said in Non-IT News Thread:
@dustinb3403 said in Non-IT News Thread:
Uber and the others are simply ride-shares (cheap taxis so to speak). I just don't see how this level of spend, is in the realm of realistic for such a basic service.
I think that there is a massive disconnect here. What Uber does is insanely expensive. The scale of the tech, infrastructure, legal, marketing, sales, training, local coordination needed, plus R&D... there is a reason no one else did this for so long. This is one insanely expensive business to be in. The costs of being in just a single city is staggering. The amount of licensing and other needs are just crazy.
Simple is the last thing you can use to describe Uber.
I just used the word simple to define Uber.
It's ride sharing.
Ignoring everything else that they are doing (which appears to be an autonomous rideshare - end game)
You hail a rideshare, it arrives, it takes you to point A. You opt to leave point A and hail another rideshare. . .
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@dustinb3403 said in Non-IT News Thread:
Does every Uber include WiFi and drinks and companionship for each customer?!
Think about the cost of good IT. People who don't understand IT will say things like "how much can it cost to plug in a computer, that's all IT is." But in IT we know that it takes an insane amount of time and cost to ensure stability, security, patching, planning, helping end users, etc.
Uber has all of that. You are focused on parts of Uber that aren't even Uber, but are the individual drivers. Uber doesn't own the cars or manage the services. This is why you feel Uber is simple, you can mixing the concepts of a global technological and legal behemoth with individuals who drive cars. It would be like saying "how hard is it to run a country, does every citizen get a personal chef?" The luxuries provided by the government aren't what make a government big and complex. It has a lot of stuff to do behind the scenes.
Uber has to manage so many things that it is actually amazing that it is even possible to do. And long term, we might sadly discover that it is not possible to do.
Imagine starting an Uber service in a new city. It might require five years of legal work and technical work, costing hundreds of millions of dollars, before you can even do your first ride. And only then do you start discovering real world problems.
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@dustinb3403 said in Non-IT News Thread:
You hail a rideshare, it arrives, it takes you to point A. You opt to leave point A and hail another rideshare. . .
Which is INSANELY complex to do and the exact opposite of "simple."
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@scottalanmiller said in Non-IT News Thread:
@dustinb3403 said in Non-IT News Thread:
You hail a rideshare, it arrives, it takes you to point A. You opt to leave point A and hail another rideshare. . .
Which is INSANELY complex to do and the exact opposite of "simple."
How so? I can call for a taxi from my cell phone just as easily. . . I don't see the difficulty in this?
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Some of the things that Uber needs to do for every ride:
- Do more work that most companies here have ever considering doing in the history of their companies just to get legal permission to operate in a country.
- Build and maintain applications and application frameworks that cost hundreds of millions to make.
- Run a world class IT department.
- Build an infrastructure in every single city they want to service.
- Run massive marketing campaigns.
- Hire and train and army of drivers.
- Run customer service and support organizations.
And this is just the tip of the iceberg. Every "little simple" thing that Uber does requires 100x more cost and scale than any business you've ever looked at. It's a massive organization doing an insanely massive task. The cost to deliver a single ride share is enormous.
If you wanted to bring Uber to Rochester for the first ride, that first ride might cost $100 million dollars to do, even in a country and state that already had Uber in it.
Think about the insane cost of taxi services. Uber is literally running a service 10x as complex, while trying to do it at half of the cost, of existing services that cost many billions of dollars.
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@dustinb3403 said in Non-IT News Thread:
@scottalanmiller said in Non-IT News Thread:
@dustinb3403 said in Non-IT News Thread:
You hail a rideshare, it arrives, it takes you to point A. You opt to leave point A and hail another rideshare. . .
Which is INSANELY complex to do and the exact opposite of "simple."
How so? I can call for a taxi from my cell phone just as easily. . . I don't see the difficulty in this?
- No you can't, that's totally false.
- Taxi services costs many more times as much as Uber.
- Taxis don't do any of the things that makes Uber Uber.
I'm not sure where you are lost here. It sounds like you think Uber is like a taxi and don't actually know what it is.
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Things my taxi can't do...
- Work globally in every market. They are segmented.
- Travel between markets.
- Be hailed from a global app.
- Maintain a global billing and reporting system for me.
- Do quality tracking.
- Cost as little as Uber does, taxis are super expensive.
- Be reliable.
- Be safe.
- Tell me when my taxi is arriving, what route I took, or track where I was going.
- Tell me the cost ahead of time.
- Be paid for by someone else.
- Free me from government control.
- Be reliable.
- Be private.
How the hell do you think Uber and taxis are alike? It seems like because they both use a car on a road, you don't see the "service" side of them, which is the whole thing. That they both use cars is coincidental, and could change.
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Uber exists because taxi services weren't meeting the need. That means, the entire purpose of Uber and Lyft is to do what taxis do not. That's their function.
It's like making airplanes because cars couldn't fly. Then stating that airplanes have to be simple because cars are simple - even thought the very existence of the one is to meet the lack of capability of the other. People use Uber because taxis are different. Some people do it because Uber is safer, some because it is easier, some because it is more reliable, some because it is half the price, some because they can't find taxis... loads of reasons. The differences are very, very significant.
And on top of all that, taxis cost an insane amount. More than Uber. So even if they were the same, that as well shows why the amount of money involved is a sensible amount.
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To give some perspective, the NYC budget for OVERSEEING the taxi services, without actually doing a single thing themselves, is: $68,567,792 a year.
That's the city budget, it does not include the state budget. That's just the "executives" in the system. None of the actual work.
The budgets of all taxi services, which is where all of the real money is, is on top of that. All of the workers, training, legal, customer service (what little there is), all of that is not included. And the service does almost nothing, and it isn't reliable.
So figure a budget of $500,000,000 for a single city. That's the terrible taxi service. One city. That's what taxis cost today.
Now, take that from a worthless, terrible, crappy situation to a massively technical, customer service oriented, safe, and reliable system; and move it from one city to hundreds.
What people should be shocked at is how cheap Uber is able to do it, considering no one else was ever able to come close to being so cheap before. They leap frogged the taxi service - doing ten times as much, at half the cost.
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But the easy answer is... because it acts like one.
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@scottalanmiller said in Non-IT News Thread:
@coliver said in Non-IT News Thread:
We have a whole thread for that.
Oh... I didn't see it.
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@coliver said in Non-IT News Thread:
@scottalanmiller said in Non-IT News Thread:
@coliver said in Non-IT News Thread:
We have a whole thread for that.
Oh... I didn't see it.
Slacker
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@scottalanmiller said in Non-IT News Thread:
@coliver said in Non-IT News Thread:
@scottalanmiller said in Non-IT News Thread:
@coliver said in Non-IT News Thread:
We have a whole thread for that.
Oh... I didn't see it.
Slacker
You can remove these few comments I'll post something in that thread.
