[anon191928]

burning money worked for Uber. As long as they can IPO or get cheap debt from governm friends any valuation can work. Uber lost double digit billions as an app with no edge or anythin. It always made no sense beyond 1 billion

[emccue]

Uber's whole schtick is being what was an already profitable business model (Taxis) with lower overhead/easier access.

That money they burned was on customer acquisition, building infrastructure, etc. The unit economics of paying to be driven to the airport or Benihanas was always net positive.

They weren't losing money on every customer, even paying ones. There just isn't a business model here.

[gtirloni]

> no edge or anythin

I wouldn't say they had no edge. They had a huge advantage over traditional taxi companies. You can argue that a local Uber-like app could be easily implemented, that's where the investors came in to flood the markets and ensure other couldn't compete easily.

The situation is in no way similar to OpenAI's. OpenAI truly has no edge over Anthropic and others. AGI is not magically emerging from LLM's and they don't seem to have an alternative (nobody does but they promised it and got the big bucks so now it's their problem).

[riku_iki]

Uber had limited underpowered competition, so they could win starvation game.

OpenAI competes with google, who can drop 50B/y into AI hype for very long time.

[sillyfluke]

the 1.5 mil bonus to tech staff announcement prior to chatgpt 5 release makes even more sense now. They knew it would be difficult to manage public expectations and wanted to counter the short-term (in the best case) drop in morale in the company.

[riku_iki]

I think that 1.5m bonus is likely stocks with 500B valuation. There are other rumors they want outsiders to be allowed to buy stocks with 500B valuation.

[xnx]

> burning money worked for Uber.

TBD. Some people did well while Uber gave money away, but Uber is not net profitable over its lifetime.

[dvfjsdhgfv]

The way they do this in Europe is that an enterpreneur buys a fleet of cars and then gets a visa for a number of folks from Bangladesh and other areas who don not own any of these cars and ride them in turns (they also sleep like 10 in one appartment but that's a different story). The owner gets the money and distributes them to the actual drivers. Uber says they are innocent as they are not in an emplyer-employee position with any of these drivers.

This model worked for the fleet owners so far because the Saudi gave enough money so that both (1) the customers were happy, (2) the cash from the ride could be divided between owners and drivers in a way these drivers complained only to a certain extent.

But the last two years (the only profitable ones) are much worse, both for the drivers and fleet owners. There is still sunk cost in there, but once the cars get old enough they will need to think well whether to buy/lease the next batches.

[Analemma_]

Uber raised something like $50 billion in debt and equity before it went public, but after 15 years of losing money, it has finally started making profits… just in time for Waymo to arrive and eat its lunch. Of course, Uber could themselves get into the self-driving game, but their entire profit story to investors relies on pushing costs away from them onto drivers; it vanishes entirely if they have to maintain their own fleet.

Uber is profitable on a cash basis, but if you’re a public investor, you got fleeced by the early-stage venture money and debtholders. I don’t think it will ever pay back what it raised.

[xnx]

Agree.

> Uber could themselves get into the self-driving game

They tried. Made a little progress, killed someone, and gave up (rightfully so).

[dvfjsdhgfv]

"...while Uber has achieved profitability, some analyses suggest that a substantial portion of these profits may come from an increased revenue share at the expense of drivers' earnings".

So let's imagine is 2040 and OpenAI is finally profitable. Now, Uber did this by increasing prices, firing some staff and paying smaller wages to drivers. And all this while having near-monopoly in certain areas. What realistic measures would they need to take in order to compete with, say, Google? Because I just wish them good luck with that.