[GCA10]

I just fished out Amazon's 2000 financial statements ... and even with the inflation adjustment, Uber's results are in a class by themselves. Here's why:

It turns out that Amazon's bottom-line loss of $1.4 billion in 2000 included a host of non-cash items, all of which are conveniently being left out of Uber's EBITDA summation. These include: - $304 million of write-downs on other dot-com equity investments that weren't working out (Webvan, etc.) - $321 million amortization of goodwill (for full-fledged acquisitions that weren't looking so hot) - $25 million of stock-option expense - $200 million of impairment-related and other. (Jeff? Jeff ... what was that all about?)

Anyway, on an operating basis comparable to what Uber is reporting, Amazon's basic business probably ran a more modest deficit of about $400 million in 2000. In fact, Amazon made a point of saying that its book/music/video business was cash flow positive in 2000, though obviously not much else was.

This link (see p. 35) provides Amazon's full 2000 financials: http://media.corporate-ir.net/media_files/irol/97/97664/repo...

Uber may still bring everything into profitability, and its commitment to build market share no matter what is quite gutsy. But there's still a lot of work to be done.

[mikeryan]

The interesting symmetry between the two right now is that in 2000 Amazon was regarded as a book/music/video business while under the hood they were building the worlds premier shopping fulfillment platform (and cloud services).

Right now Uber is the "taxi service" but is building a world class transportation logistics platform. Noting the Otto acquisition and the self driving car investments you can track their path forward. If Uber can become for transportation what Amazon became for online sales then they have a pretty clear path to success. That being said I think Uber has savvier competition (Google, Apple even GM) who recognize them as a real threat where I think brick and mortar didn't realize Amazon's potential until it was too late.

[GCA10]

Well said.

What's striking about the Amazon/brick&mortar comparison is that retailers' senior management did recognize Amazon early as a fundamental threat. (For example, Walmart.com came to life in 2000 and was set up in the Bay Area with plenty of love from the Walton family.) But on an operating level, few retailers' managers wanted to change the business rapidly enough to deal with it.

They fell into the Kodak trap of sticking with the old ways for a few more years of higher margins ... and thus building out online versions that were way too timid and deferential to make it big.

For example: limited supply of hot items? Put them in the physical stores, not the online one. Price war online? Can't compete, because it might mean undercutting the retail-store price and hurting high-margin sales.

It will be interesting to see if the car companies are able to build out new transport platforms that succeed by making life much worse for their existing dealerships. If so, they can give Uber a run for its money. If not, they will compete in slow motion.

[dragonwriter]

> What's striking about the Amazon/brick&mortar comparison is that retailers' senior management did recognize Amazon early as a fundamental threat.

Some did, many didn't. A number of retailers outsourced their branded online presence to Amazon until fairly late in the game instead of building their own capacity, even in the market Amazon was by others earliest recognized as a threat in (e.g., Borders did so until 2007. Target, IIRC, did as well for quite a while.)

[serge2k]

> Right now Uber is the "taxi service" but is building a world class transportation logistics platform

But they are losing money because they are selling their product for less than it costs them.