[leothekim]

It's a Fabian strategy to establish market dominance. Uber is spending like crazy to expand for market share. On the surface at least, they are similar to how Amazon was operating in its early days - investing in itself early to expand and not expecting to generate a profit for many years.

[samfisher83]

AWS already makes more money than the entire Amazon retail side. The Amazon retail margins are still razor thin.

[thwarted]

It's currently pretty even, despite higher margins for AWS, and "already" is saying a lot despite how long AWS has been around. I covered this 64 days ago in [0], but here's the relevant part again.

Looking at Amazon's Q1 2016 Financial Results [1], page 8, we see that net sales of non-AWS amounts to ~$26B, and AWS is ~$2.5B. From the Segment Highlights section (same page), AWS sales is 9% of total sales. AWS beats non-AWS income only because there were losses in international; ignoring international, it's a $16m difference. Looking at page 14, Media sales in North America and International sum to $5.6B. Media sales alone is double AWS's sales of $2.5B (page 13). Profit margins are way higher for AWS, so there's still a lot of room for a larger income difference between the two segments.

[0] https://news.ycombinator.com/item?id=11951577

[1] http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9N...

[samfisher83]

Look at their most recent 10q http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-new...

Retail Profits = (702 (Domestic) + (- 135) (International)) < 718 (AWS)

Amazon made more money on AWS than their retail side.

[toomuchtodo]

I appreciate all of those VC dollars siphoned off by AWS-using startups subsidizing my consumer goods.

[ctdonath]

That's fine so long as they're not losing money. Someone can fill us in about how much Amazon sunk into startup costs before breaking even. Amazon is perceived by customers as usually the cheapest place to go for products/services.

My concern is that Uber is already considered "expensive" by customers, and that's at a massively subsidized rate - how will customers react when Uber wins the price war, destroys the competition, and then has to actually raise prices? and not just raise prices to break even, and not just to make a profit, and not just to grow the currently non-existent fleet of physical vehicles (self-driving or not), but to also make back the US$billions lost to win the war of attrition?

[sharemywin]

the problem is most of amazons profits are in cloud services. moving something from point a to b is expensive and hard to get economy of scale.

[wastedhours]

Part of the argument is the Uber is building product infrastructure of their own - Amazon built AWS as part of their everyday working, Uber could roll out delivery, autonomous tech or even their financial services as separate strands once they've reached pervasiveness.

[SyneRyder]

Indeed, Uber already has their UberEATS program where they offer home delivered food from restaurants that don't yet have their own delivery service. So they're already experimenting with providing delivery & mobile payment processing services.

[Guyag]

I'd be interested to see how UberEATS turns out. Deliveroo has had a year on them, and at least where I am I think the latter is still the favourite.

[wastedhours]

Yep - much bigger fan of Deliveroo, but whilst UberEATS might fail, could almost see them being more of a delivery API and last mile brand than the full restaurant service stack.