[roystonvassey]

If there was any time to be skeptical of Uber's longevity, it is now (at least for me).

My experience is anecdotal but I visit my home country every year for a few months and I can clearly notice the declining quality of Uber's services:

1. Vehicles, on average, take at least 10-15 mins longer to get

2. Even if you find a vehicle, 60% of these rides are canceled (either by the driver because they call me and find out they don't want to go that way or they just don't move at all and I'm forced to cancel)

3. After all this, if I am lucky to get into a commute, every driver has complaints about Uber (complaints include intransparent pricing, delays in payments). Most of these drivers are completely dependent on Uber or similar services and have heavy debts that they are now unable to service.

4. Uber's app itself appears to get bloated by the day and while they do appear to make an effort collect my feedback when rides get canceled, not once have I got an impression that the feedback matters at all. Additionally, payment options are numerous but they require me to complete multiple steps to finish which puts me off using it (not Uber's fault I suppose but is part of the riding experience).

Given that they are competing against flag-down autos and rides, not to mention public transport and private vehicles (as electric bikes and cars get more popular), I think their model is not sustainable anymore and I expect them to struggle further as riders withdraw and once the demand-supply gap grows further, it's a downward spiral.

[bennysomething]

There's a shortage of drivers (in the UK at least) https://www.bbc.com/news/business-59158230

It's actually getting really noticeable. It used to be easy for me to hail a taxi or get an Uber from a pub, it's next to impossible now

[arcturus17]

I haven't read anything like that in Madrid, but I've been noticing it for a couple months now.

Rides in central neighborhoods such as Chamberí used to take 2-3min at most, now it's very common to see waits of 7-8min.

[cryptoz]

It's like this in Tacoma, WA right now. An Uber or Lyft may never arrive. 5-10 cancelled drivers before the car arrives is normal. A notice saying "No cars available" is shown 70-80% of the time for XL size cars. Often it takes 1h or so to get a ride. Sometimes it will come in 4 minutes, sometimes it will say 4 minutes but then 5+ drivers cancel and it takes an hour of real time, while the app just says 4 minutes.

I have come to depend on Lyft and Uber and they are failing me and have been for a long time now. So long that I now plan to get a driver's license and a car. I don't know how else to make it in this world. If you're at a business and it's closing soon, and raining outside, you are likely to be outside in the cold and rain for 30 minutes waiting for a car.

It's ridiculous. I'm giving up and have already booked my written drivers test for WA.

[titanomachy]

> I don’t know how else to make it in this world

There are places in the world with substantially better transit than Tacoma. It’s always been a pretty difficult place to live without a car, except maybe for a brief period between 2013 and 2021 when Uber was heavily subsidized by VC.

[lostmsu]

You are forgetting the epidemic is still here, peak deaths in WA was just 1 month ago.

[roystonvassey]

Yep - I am now seriously considering buying an electric scooter because Uber is plain unreliable now.

[bostonsre]

Do they still lose money on every ride they give? I've been skeptical for a while now, it's a ponzi scheme.

[savanaly]

For the last time, not everything that's not everything that's a bad financial proposition == ponzi scheme. At what point have new drivers ever paid the wages of old drivers?

Uber drivers have always done ok in the short term, new or old, it's Uber that loses money on every ride. And if the drivers are not coming out ahead long term due to maintenance costs, that's not affecting newer drivers any more than older drivers.

[bostonsre]

I don't understand why you are going into driver wages. I'm completely fine with their drivers making good money, but if they lose money on every ride, it doesn't sound like a good business.

What makes it a ponzi scheme is that the initial investors and the people that run it knew they couldn't possibly make money and yet they were able to get tons of investors to pour capital into a business that couldn't make money. New investors aka public markets paid out the old investors aka venture capitalists.

[lhorie]

No, according to the latest report, rides have been profitable[0] (@ +544M in the last quarter). Deliveries are still in the red, but only barely (@ -12M, up from -183M from previous quarter). "Losses" largely come from G&A/R&D.

[0] https://techcrunch.com/wp-content/uploads/2021/11/Screen-Sho...

[Zanfa]

That's just creative accounting. Uber actually incurred a $2B loss, but for some reason they insist on ignoring expenses when calculating their "profits".

[lhorie]

The 2B "loss" was a downswing of Didi stock, which Uber has a big stake on; AFAIK Uber didn't actually liquidate that position, so it's more of a paper money loss. See [0]

As for "creative accounting", pretty much everyone in this industry segment uses EBITDA. That's the language investors and media use to talk about earnings calls for not just Uber, but also Lyft, Doordash, etc. If you want to make a case for why GAP analysis would make more sense vs EBITDA given the maturity of the industry, I suppose a more elaborated argument is in order?

[0] https://www.investopedia.com/terms/m/mark-to-market-losses.a...

[nonameiguess]

Just to be clear, Uber has never been profitable even on an EBITDA basis. This right here says -$0.9 billion for the last quarter: https://www.macrotrends.net/stocks/charts/UBER/uber-technolo.... They use "Adjusted EBITDA" to try and say they're profitable, which is an attempt to remove non-recurring expenses. That is perfectly fair if they're really non-recurring, but it's also perfectly fair to be skeptical when there have been exactly zero quarters in over a decade now in which they have brought in revenue in excess of their expenses, even if they claim those expenses were unexpected.

[ultraluminous]

I agree with the gist of you're saying, and I didn't personally dig into their last few fillings, but I suppose what the parent comment is trying to express can also be stated as "Uber's core ride-sharing business model is not cash flow positive", which can be obfuscated when arguing GAP vs EBITDA.

[lhorie]

Yeah, I get the insinuation and I'm responding to that: ignoring for a moment the thing about the proper definition of a ponzi scheme (sibling threads already go into that), the claim is more or less that Uber's business model bleeds cash unsustainably on core verticals to capture investor endearment, but that cash is limited and the party has to come to an end.

What I'm pointing out is that a) the argument about "duping investors" doesn't really make any sense anymore now that Uber is a public company (since raising VC rounds by giving them paper equity is no longer really a thing), b) the balance sheet numbers have been trending towards positive cash flow (and fairly aggressively, at that), even despite a pandemic that could accurately be described as the worst thing that could possibly happen in this industry segment and c) the core vertical (rides) is actually cash flow positive and funding other parts of the business.

[Zanfa]

I'll admit, I should've checked their Q3 numbers before, regarding the write-off, but they're nowhere near profitability even if you ignore that.

For example, in the table linked above, they've accounted for all revenues, but not attributed all of their expenses by segment. According to their filing their total loss from operations across all segments was $572M, however if you add up all their segments in the table, they come out to a $8M profit. That's what bothers me. If a company has 3 segments that generate 100% of its revenue, how can it claim that $600M in operating expenses shouldn't be attributed to any of those segments, thus making one of those segments profitable.

I think everybody in the industry segment uses the same sketchy metrics because they are also terribly unprofitable.

[lhorie]

Yeah, that's actually a pretty good point. Personally, I don't really pay that much attention to profitability of individual verticals because I hold similar opinions on cost attribution, but then again, I'm no accounting expert, so I don't know if my opinions are actually correct.

I think the narrative people are pushing about bleeding money on every ride is too simplistic though. I could definitely get behind an argument that, for example, driver incentives ought to be bucketed under mobility, but on the other hand, attributing a Didi valuation fluctuation to a business vertical is obviously silly. Personally, I'm not convinced that there are enough "hidden" losses in misc categories that are "rightfully" attributable to mobility to offset the Q3 performance, and my understanding is that many analysts are bullish on Uber right now because they see the trend in these metrics, adjusted as the metrics may be. I guess we'll see what happens next year.

[quickthrowman]

The loss last quarter was mostly ($2.5B) a mark-to-market write down of their stake in Didi, which they have not sold.

[bogota]

Please explain what you think a ponzi scheme is. Because losing money on something isn’t close to the definition

[dktoao]

I think they mean it is sort of a ponzi scheme for those invested. It requires more and more investor money to operate and will eventually collapse leaving the last round of investors holding the bag while those that got in early may get out fine. I think the ponzi scheme is more an apt metaphor than the actual structure of the company?

[hervature]

A Ponzi scheme requires an element of fraud. Very difficult to tell me that building a global fleet of ride hailing and being transparent with the financials is a Ponzi scheme. The outcome might be similar (later investors bearing most of the losses) but that's more of an investor problem and not fraud.

[rovolo]

They probably mean a Pyramid scheme. In regular use, Ponzi and Pyramid schemes are interchangeable terms because you need new money to stay afloat. Legally they're different because a Ponzi scheme requires lying about where the returns are coming from, but a Pyramid scheme can be entirely truthful about the finances.

[Ekaros]

Pyramid scheme is system where income is derived from recruitment of new investors. Ponzi scheme is centralized system where profits of old ones is paid with money of new ones.

VC start-up burning money to make things or subsidise customers in attempt to acquire them is neither.

I'm really starting to hate when these terms that have rather specific and well understood meanings are thrown at anything. If you want to call it something just say it is big scam. Scam really could be anything. Not specific thing.

[randycupertino]

It's more of a funnel system where they take investor $$ and channel that to employees and in discounts to customers.

[bostonsre]

It seems plausible that those leading the company thought there was no chance to turn a profit but we'll never really know. They have a vested interest in saying "everything is going great and the future looks great" no matter what.

[Ekaros]

In Ponzi scheme there is profits given out or at least reinvested... Start-ups just burning money and finding greater fool really isn't such scheme.

[sofixa]

I've been seeing the same thing in Paris. It's gotten very unreliable, often requiring 15+ minutes to get a driver at the very least, and pricing is worse and worse.

[nixpulvis]

Not to be overly cynical, but I've noticed the same degraded quality and service across the board. I wouldn't think this is unique to Uber.

We've simply built systems we cannot maintain as well anymore, under new resource constraints.