[mdorazio]

That's a rather poor analogy. If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time. That's... not what startups do. A better analogy would be taking out a loan for $100 with fuzzy repayment terms. If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

[viscanti]

> If you go and buy stocks you're buying a security that can be traded back to fiat currency at any point in time.

It depends on the stock. But there are lots of types of investments. None of the rest are referred to as "losing money" until it's clear they lost money. The act of investing is investing.

> If the ROI on that loan is negative, everyone would agree that you're losing money, investment terms be damned.

My point is that it's too soon to say what the ROI is for Uber's investments. I remember lots of people lamenting the "losses" that Amazon had year-over-year, before they realized that it was actually a wildly profitable set of investments that the company had made, creating one of the largest companies in the world.

No one is playing an investment term semantic game here. I'm simply expressing how silly (and misleading) it is when people refer to businesses investing in things as "losses" before they ever know how those investments play out. You only know how an investment turns out when you know how the investment turns out, not when the investment first starts.

[mdorazio]

You and I must have had different Investments professors. If you invest in a stock and it decreases in value, you lost money. You might get that money back if it goes up, but it is absolutely referred to as losing money. People just like to play mental games and say things like "it's only a paper loss" or use the "unrealized loss" term which is for accounting purposes, but it's a loss regardless. If you don't believe me, take your rent payment and put it in a stock, then if it drops tell your landlord that you're not short the money - they just have to wait a while because it's an investment. Or put another way, had you not bought the stock before it went down, you could have used the same amount of money to buy more of it at the lower price point - i.e. you lost potential money even if it goes back up.

I believe the point of the parent post is that the entire business model of Uber is based on losing money on a unit basis to sustain the market. This is very different than companies like Amazon that lost money due to OpEx on growing the business in a sustainable way. The Amazon equivalent of Uber would be if Amazon paid for 20% of every item ordered out of its own cash balance. I agree that it might still turn out great for Uber in the end if various market forces align, but 1) I'm having a hard time thinking of a company outside of the VC-funded tech scene that could run Uber's financial games without going bankrupt, and 2) I personally think it's important to ask if the money going to keep Uber afloat is really best allocated there.

[speedplane]

If Uber wanted to be profitable, they could be tomorrow. Their growth would slow down, and they wouldn't be able to invest in next generation technology, but they could be a very profitable business.

[dmitrygr]

Given the insanely high price elasticity of demand on rideshare, i severely doubt this. Show me anyone who does not have both uber and lyft apps, and does not immediately go to Lyft when uber prices seem a tad high (or vice-versa).

[sokoloff]

I’m in that situation. I know Lyft exists, of course, and will switch if Uber gets too aggressive on pricing, so your point has merit, but I literally don’t have the app nor account there yet.

OTOH, I believe Uber is already quite profitable in my city (Boston metro), so I don’t think a future of Uber as profitable overall is unachievable.