Drivers for Uber, Lyft and all other exploited workers should be organized into unions in the USA. That is the only way for these workers to escape the state of slavery they are in at the present time.
11
I'm glad the gamblers are avoiding Kalanick Uber's stock, but it probably has far less to do with their atrocious ethics than their poor revenues—which means the gamblers encourage them to be even more atrocious.
Hopefully Lyft continues to fall down (in stock price and otherwise) with them, and we can get back to building local mass transit, taxi systems, and livery companies whose worker pay, bigotry (esp. ignored taxi hails), and crime frequency (esp. in subways) are at least potentially fixable for each at a time because, well, local.
My mom still takes a pre-Uber livery and thinks that rigged-economy megacorp is stupid. I'm not sure to what extent that livery is now just some Uber or Lyft shell that happens to still answer her actual phone calls, but I cheer her for it.
4
This is “disruption”? Sounds like a debt fueled company, playing the long con, stealing from the mouths of taxi drivers.
12
The next tech company will be an app so women and children can do piece work at home as gig employees and bring jobs back from Vietnam. Then all of Frances Perkins work will be undone.
10
Potential for dividend in the next decade. Zero. Why bother with the Ponzi scheme? Who buys this stuff?
5
In my estimation, Uber, AirBnb, Lift and all that 'Free Shipping' we hear mentioned is all a way for Millennials to continue living on the cheap. Period.
2
Money losing enterprises and money losing Presidents move to the top in the USA. Welcome to the age of parasite capitalism. What does that tell you about the state of the country?
The USA has become a positive encumbrance on world development.
11
Do you believe in karma? I believe in karma.
This is karma.
8
Uber is being valued at $70,000,000,000. This is for a service to bring kids home from the bar, which has yet to make any money. I’m thinking 1929 right now.
21
I love Uber, it's brilliant. Uber=the future of transportation.
2
@beatgirl99, it's a taxi service that also delivers food. It is the future of nothing except new ways to lobby governments to not enforce their laws properly. There is no tech here that's new, and certainly nothing brilliant.
19
@Mike B and...I might add, it checks every politically correct box, ie, less passenger cars on the road, crowd sharing, job creation. Also, the rest of the world, meaning non-NYers, don't necessarily have the "luxury" of public transportation to get around. Any company that has become a verb before its IPO is probably a good investment.
2
@Mike B Not sure how you can compare Uber with "a taxi service...no tech"? Are you kidding? Uber is a disrupter. When you travel, you don't need to rent a car. When you are drinking, you don't need to take your car. It's way more affordable and ubiquitous than a traditional car service. You can track every ride you ever took. Every article you ever left in a taxi can now be found. You know exactly where your kids are going and you know they aren't driving drunk. You know exactly how much it will cost before you get in. You can track your expenses. You know the driver's name. No more searching for a parking space when you go out at night. It's worldwide. No cash changes hands. Trust me @Mike B, it won't be long before people are giving up their cars and their expensive insurance policies. Also, if you think this is anyone's game to grab, it's not, inasmuch as Amazon's business model is. This is a developing story. It's anyone's guess as to where it's going...but I'm going along for the ride.
1
Uber didn’t invent and doesn’t control GPS the smart phone, cellular networks, the car, most autonomous enabling technology, mobile pay and most mapping apps. In other words, they don’t exclusively possess anywhere near $45 billion worth of proprietary technology, let alone $80 or $100 billion. The culture is bad, the risks are high and the forward looking technology picture is fuzzy. Uber-like apps and the infrastructure behind them are simply not that hard for any group of well funded software engineers to duplicate. Potential competitors are also too numerous to list. Even if Uber survives its near term cash burn and labor issues, odds of it retaining long-term car-sharing dominance are dicey at best. The threat of an eventual price war continues to grow with the progress of a host of potential autonomous competitors. This includes a formidable battery of richly funded technology and transportation powerhouses. Uber may currently be so dominant that it has become a verb, but so was Xerox. Success can be fleeting, especially when it’s squandered.
8
Ads will save Uber! They should pay customers and drivers using money from ad impressions! It works for so many other tech companies!
1
Two things happen and will happen
1. IPO's do sometimes go down. Facebook went from $ 37 to
$ 22 in a matter of weeks
2. Uber will use some of the new found wealth and cache hoard
to up the ante for their drivers. If Uber does not do this, they
deserve whatever comes to them from their drivers.
The biggest problem Uber faces is itself. The company lost billions getting going, and along the way forgot - or deliberately ignored - the undeniable fact that they contracted with people who owned the only assets in the business, asked them to break the law, castigated them when customers said something about them that was less than complementary, and arbitrarily cut their compensation. Recently, they've tried to make up for their behavior toward the people who actually bring money into their bank accounts through effusive praise and tiny cash awards. Where they go from here is a really good question. I was asked, as an Uber driver, to buy their IPO stock at a reduced price. I passed because it looked like a losing deal to me.
10
How is Uber worth all these billions of dollars when they don't even own the vehicles used to carry people around? When I was out of college in the early eighties I used my own car to work for a base in Manhattan and Brooklyn. Back then there were not all these regulations as we have now. So what Uber is doing is not new but I think they are ripping off the drivers who are the heart of their industry. Only thing back in those days there were no apps. People called the base and they gave us the choice to accept the assignment or not. Then when I got a well-paying job I left. Now it appears some people are doing this, not to supplement their incomes, but as their primary income. I guess all this talk of low unemployment is really deceptive. If people had opportunities for good jobs they won't be protesting against Uber. They would leave; and Uber would come crashing down like Humpty Dumpty who had a great fall.
13
Pump it all you want to, Wall Street, it will not bring you the inflated values you wished to skim from the gullible public.
A few will make the fantastic profits for taking this public but then it will settle down into a reality based business, one that connects a need to a service, then business as usual.
It is a smart idea, one that fills a need, now they need to deal with compensating their drivers fairly, which they will not do, as squeezing employees adds to the bottom line for investors, which is what this ultimately comes down to once the IPO is out of the way.
That is the way of capitalism.
7
I am confused by this analysis. If Uber’s goal was to make people rich by buying the stock initially and selling it immediately, then sure, this was a disappointment. But IPOs are supposed to be about raising money for the firm. In this sense, the IPO was an incredible success in that they maximized their fundraising by getting the maximum the market would have allowed. If they had offered the stock for $50 and it moved to $70 opening, the firm would have lost out on $20 of money, which would have gone to investors instead.
6
I hope that some of Uber’s disappointing open is a protest against the company’s flaunting regulations and treatment of its all-contractor driver force. It’s time for Wall Street to develop an iota of ethics.
8
@rain4sahara Nice thought but fat chance. Wall street is not about ethics, it is about gamble and profitability at all cost, employees be damned.
It is about the rich getting richer, it is about exploitation, it is about bottom line, it is about marginal business practices, it is not about ethics.
4
There are so many deficiencies in Uber's business model that it is surprising so many brilliant, early-stage investors have been hoodwinked. It is a taxi business. Taxis have been around since the days of chariots. It is very easy to calculate the total cost (meaning ALL life cycle expenses) of point-to-point personal transportation. There is simply no room for egregious levels of profit in the taxi business. There may be some value in the platform if there were driverless cars, but that is far, far in the future, if at all.
11
Not exactly, because uber did find an unused resource: all those individual vehicles sitting unused the majority of the day. As a result, the marginal cost is less than it would be to bring on additional taxis for the same number of hours. Another untapped resource is the labor of people who had a few hours (or at least less than a full work day) of available but not completely predictable time to offer. And finally, having one app that works well in most places (enough drivers, etc) is something of value that people will pay for.
2
The use of vehicles and infrastructure does not come free! Uber pushes these costs onto the drivers and tax payers. It needs to be taxed and regulated.
5
Offers nothing special that cannot be imitated. No advantage to its centralization. Can be usurped by local car "sharing" companies. Early mover advantage soon to evaporate.
5
We are overdue in this country for another Great Recession like the one that swept away Bear Stearns and Lehman Brothers ten years ago and led to a collapse in housing prices.
All great economic collapses require policymakers and government officials to come up with catchy new names to explain the collapse to the general public.
The one this time will have the word Uber in it.
2
Everyone’s comments are so negative... do you even remember what life was prior to uber? Waiting for cabs in a line of people? Fighting for a cab in Manhattan during rush hour? Give me a break. Uber is a hugely useful company. And the drivers work there because they CHOOSE TO... if they don’t like pay or ours they could always quit and look for other work. Given the labor market right now, they’d find it.
8
@Maximus
Personal convenience always trumps social conscience.
Uber has revolutionised taxi travel in many parts of the UK. People DO forget what it was like before. There's now a preferable alternative to, say, London black cabs with their sky high fares and regal attitude to customer service (most of them seemed to be home in bed by 1:00am) or the provinces where, oddly, street hailing is mostly prohibited (sic), reducing travellers to the unreliably answered telephones and the ratty vehicles of what was, strangely, known as the 'mini-cab' industry.
Uber here has recently taken a battering with its "it's easier to ask for forgiveness than to ask for permission" business model having run out of road. It's debatable whether the much stricter licensing and regulation that has resulted brought much benefit to the drivers, though. Crucially, Uber has lost a series of landmark cases against the self-employed status of drivers - leaving the company with only a final appeal to the UK Supreme Court. I gather that this legal drama is also playing out in other non-US countries.
If Uber has to employ its drivers, can it still function?
1
@nolongeradoc
Safety. That’s what the much stricter licensing brings. Drivers who have been adequately vetted.
4
@Maximus hugely? what a laugh.
1
Stop calling Uber a tech company. Stop calling Lyft a tech company. They are not tech companies. They are a "market maker," the go-between that matches customers with service providers and they take a cut of each transaction.
Just because a business uses an app doesn't mean they are remotely "tech."
Oh, and they're not "ride sharing" companies, either.
29
Uber was kept out of Israel. At the same time, taxi drivers were offered the chance to join a "virtual cab stand" which reproduces the Uber experience. It seems to be a reasonable balance offering the convenience of Uber together with regulated fares and driver licensing of usual taxi service.
15
Uber is an overrated tech company. As is Lyft. They cannot produce a profit. They are being challenged already by smaller rivals. They are under pressure in cities around the world. That’s why the IPO price sank.
13
This are American style working labor practises - designed to create and maintain a pauper class, a knock on from slavery - spreading to the rest of the world.
In Western countries with robust labor unions and better workplace practises like Australia and Europe, Uber will not last long.
They will end up being regulated outside America, like in the case of Facebook.
America can keep its shadow slavery workplace culture. It will not survive elsewhere.
28
@EC Uber and such have always been a scam to siphon off consumer transport revenue, even at a loss, in the investor hope that this can be funneled into something game changing, like automated cars that would despense with the driver all together. But the automobile itself is substantially parasitic and wasteful. Uber is a double down bet on expansion of this parasitism and waste. It is the last thing we should be doing now.
5
Beyond the mirth at their failure, one can only hope that the parasitic business model by these blood-suckers will go down in flames by our hands. We should have no doubt that the Uber model is aimed at all of us. The attraction for the Wall Street banksters is to vastly increase job exploitation while stripping away guaranteed hours, employee protections, employment and health insurance, and spread this to ever greater numbers of jobs. This is their "disruption." Just as the development of "autonomous" cars is aimed at taking the jobs of millions upon millions of drivers. Of course to the degree they are successful they only hasten the demise of the capitalist system, and push millions into the kind of desperation out of which comes social revolution. That is small comfort to the wage-less slaves who are their immediate victims, but the initial attempt at a strike by drivers presages the coming battles.
15
@AR Commercial arbitrage, like land rent, is in essence parasitic enterprise. They are both now out of control, strangling economic activity. They are impossible to suppress given the present constitution of the US. The USA was born a mercantile state and has always promoted and developed upon such parasitism. That played a historically progressive role for a time when it drew productive industry behind it. Now it produces only death, destruction and ecological suicide, the last actively promoted by a mad end timer pretending to be a secretary of state.
The last positive contribution to human development by the USA was likely the internet, pioneered by military state enterprise. Since then nada mas.
6
I watch business news in the morning as a recent forced retiree(thank God kids through college) and see guest after guest Uber investor saying that they are "disrupting" business and how Uber, ubereats, uberfreights,uberscooter(?)and other subsidiaries will take over the world. Many seem frankly Unamerican and to say they will disrupt the auto industry, rental cars, the taxi industry, and the food industry means they will cause millions to lose their jobs and be forced to be Uber drivers netting 8 bucks an hour. No thanks and the billions of losses stand as moot testimony to the idiocy. Amazon had lost 6 MILLION by the time they went public(again, not a fan at all) not billions so the analogy is ridiculous.
14
By now you should know analysts always "Talk Up" the prices.
1
Uber steals “surges” from drivers by charging the passenger more when it’s busy, and instead of keeping 20% of the fair, Uber is actually keeping 60% or more of the fare, but paying the driver the lowest price per mile rate (.65¢ per mile) and tossing the driver chump change as a “flat rate bonus” ($4 bonus on a 20 mile Drive, while Uber keeps 2X or 3X “surge” but they call it “upfront pricing“) Uber is robbing drivers blind, it’s churned through millions of decent highly rated drivers, and all that’s left are desperate people with a few choices of where else to work.… People Who can’t do the math, or Need the flexibility, or don’t have a green card. Uber changed the driver policy 1 year ago, and announced “no more surge pricing” in atlanta however they CHARGE the passenger a “disguised surge fare” called “upfront pricing” which is still “surge pricing, But instead of keeping 20% maximum commission (as Uber did in the past) they now keep the entire surge to themselves ( but only pay the driver the Low per mile rate .65 ¢ per mile and 9 pennies per minute ) and give a flat fee “bonus” (the chance of a nightly surge would be the only way to average more than $9 an hour, and the only incentive to get out there and drive in traffic, or at night, endure rude passengers https://www.abcactionnews.com/news/national/uber-is-changing-its-surge-pricing-policy-it-could-cost-workers-up-to-1-000-a-month-driver-says
10
The only analog here is Enron.
8
What am I missing here. The offering was priced perfectly for the benefit of Uber. Had Uber begun trading at $50 Uber would still get $45 and the "banks" would get everything above $45. Sounds like Uber did a good job pricing itself.
1
Uber appears to be just another company that does not pay a livable wage. What is going on in our country?
14
This is going to go down as a monumental disgrace. Those responsible for "setting the value" of the company need be held to account down the road.
It is a mindless gaffe bordering on some sort of legal nightmare to value a company that is no more than a hosted APP for crying out loud and that will never, ever turn a profit for numerous reasons.
Now that a "value" has been tied to the company via the IPO and shares are out there, watch the line up by governments at the local and state level and in offshore areas where Uber operates to tax and fine this company endlessly.
There, of course, is the thorny issue of the "contractors" that are actually employees that are driving their own vehicles. The liability risks are enormous. The driver agreements could be ruled to be illegal when the lawsuits begin.
A "unicorn." My word, what is going on?
7
I won't use their service until I see that drivers are free to set their own fares and charge what they want to charge. I won't pay for an unethical service.
9
Drivers actually are free to charge what they want. Drivers and riders are free to negotiate their own prices. Read the terms.
1
@T.G.
Great strategy. nobody would use that service
1
@Bjh
I'm not interested in prolonged negotiations with drivers. I want to go into the app and see a driver's custom advertised rate before I select a specific individual driver.
2
Uber has its function. Great to have transportation to and from where I might be drinking alcohol. They do come when called and I can track their arrival on my cell phone. I'm sold.
7
@Polemic
It is nice for those who have a solid job,
Good for you.
But it would be nice if you decided to help other people, who, when the next big thing comes for your job, will have your back.
5
Following local laws and treating employees as employees (well) may be the first steps to profitability. Oh yeah, and have something a bit more old school like a phone number with an ai voice, at the very least.
11
I'm not profitable and haven't made any real money in a long time. Will someone please give me 76 billion dollars?
30
@Linda
only if you, like uber, can convince people that you have lots of potential
4
@Linda
The check is in the mail.
3
If I could, I would.
2
Remember when companies had to be profitable to be valuable?
Consider this flopped IPO a burst bubble averted. Time for the market to get real.
11
Companies that are highly successful usually have proprietary products. McDonalds has the Big Mac, Apple has the iPhone, Coca-Cola has Coke, Microsoft has Windows, and Amazon has their own products now. What does Uber have? Nothing. The drivers are providing a basic service. How do they improve on that? How do they lower costs and raise prices to become more profitable? I don’t see how.
16
@Mark Bingo. But it gets much worse. Stay tuned.
6
Uber is more of a lottery for generating speculative cash deposits into the accounts of its founders and insider investors, than a technology enabled transportation company.
16
Why would anyone want a piece of a company that continually loses tons of money?
Uber ain't no Amazon.
4
@MIKEinNYC
Ignoring the fact that up to and after their IPO, Amazon "continually loses tons of money" for two decades until very recently?
It may be kinda exactly an Amazon.
4
The other question of course is- is this what we want to encourage? Amazon spent years turning losses as they destroyed whole industries, to finally turn a profit now that everyone else is dead. Not my idea of fair play or sustainable business practice.
12
So you’re suggesting that had Amazon never been created, businesses large and small would have come together to give consumers a well organized retail website that features two day delivery? You know, department stores upended retail not only for their selection and numerous categories but because of the self-service model that got rid of clerks.
2
People believe the purpose of these companies is to provide valuable services and continue providing value as an ongoing concern as a way to generate revenue and by definition profit as well as return on capital.
Perhaps their true purpose is to let well trained, agile, un encumbered yet mercenary principals cash out.
See also: The Hunger Games.
8
@MitchW
I do not believe there was any “perhaps” about this. It was what was intended all along - that is how they got their start-up money - it was also why a scheme that is so obvious managed to go on for so long without any scrutiny from either “the media” or regulatory authority.
2
“Scheme”. Such an apt choice of wording.
1
So confused about these many comments. It seems like many commenting haven’t even used Uber. I live in a southern city with an antiquated taxi system. Uber fought to become a part of the city and it’s been a game changer. I’ve used Uber in every major city I’ve traveled to..SFO, NYC, LA etc. Have never had a bad experience. Have enjoyed meeting almost every driver - actually never heard them relate a bad experience working for Uber. Seems like there are many here throwing stones as in sour grapes. If you don’t want to use Uber hail your local cab. I do NOT have that option and am grateful for all the people in my town driving for Uber.
17
@Rosemary
Be confused no more. I haven't used Uber, because like most Americans, I own a car. Most people do, because they need to get to work. I use my car for almost everything. I'm not going to wait around for Uber cars to take me everywhere. Uber is mostly being used by tourists and drunk people who need a ride home from the bar. The cost of the ride is about how much it costs to provide the ride. It's difficult to see how Uber could ever find much profit, if any, in this. But, the IPO price values this company at nearly twice the value of Ford Motor Company. It's laughable.
8
Ride sharing companies will all end up being can companies once the drivers realize they're getting mugged.
6
Uber's stock may have gone down today, but they pulled off their biggest scam yet. They now have a $70 billion market cap. Not bad for a company that is worth about $5 billion. Uber has created an enormous business, but so what, they can't make money. And anything they do to become more profitable will cost drivers. I drove over 6000 rides for Uber before quitting in March of 2018. Uber's business model can be summed up this way: exploit drivers who don't understand that we are controlling the most important information so they can take unprofitable rides and drive their cars into the ground. Now, dummy America has bailed-out Uber's broken business model. I only wish I could short the stock, but of course, no one will be lending.
10
"Do the right thing, period." How about paying your drivers a living wage, period.
10
Dear Uber drivers-
Let us know the real profit you make per mile after subtracting:
*fuel(which topped $4/gal this wk in Calif
*maintenance, tires, oil changes, etc
*insurance
*registration
*any tickets for speeding, etc
*damage to your late model vehicle including chipped windshields, interior damage, wear and tear, etc
*your time (and stress) acting like a patsy to get a good rating, and don’t forget free waters, candies etc you provide
*the crazy donated commute some of you make to the areas where many of you make most trips
*driving for Uber instead of something more profitable like education, etc
Ok, now put that into a per mile amount to subtract from what Uber gives you.
This is why Uber doesn’t pencil out for drivers but it does for the few at the head office.
16
Uber rips off its drivers. creates oppressive congestion in the major metropolitan areas it is in; case in point San Francisco, and still will make its misogynistic ex ceo Traivis Kalanick fabulously wealthy as a result of this IPO. Something is massively wrong with this picture.
13
International employee protests ahead of the I.P.O. party isnt something you see everyday. Wall Street greed and hubris shining bright too.
11
Hey bankers, valuation of $120MM do you want me to laugh now or later?
3
Investors wisening up - still unprofitable, drivers just getting by if not burned out, increasing competition and regulations, all the while making congestion worse, reducing public transit ridership... what a deal !
3
Autonomous cars was just a pipe dream to lure investors. If Uber has no path to profitability without owning a single vehicle, how the heck is it going to make money owning , maintaining and insuring a fleet of a million or more cars?
11
It will have built a familiar dispatch system founded on vast reserves of data about trip length, destinations, peak travel times, causes of surges in demand and so on. My cynical guess is that they know they only have a slim chance of ever achieving dominance of the self-driving car marketplace or even surviving until such is the reality but there is future value in their data and intellectual property.
3
My Daughter was hit by an Uber driver while riding in the bike lane. Despite having the drivers Licence number and insurance, Uber Toronto flatly refused to assist in any way regards the investigation and referred all Police inquiries to their Support Website. The Detective assigned to the case informed us after several months that the site is essentially non functional and designed to deliberately obfuscate investigations.
He strongly advised against using Uber because the drivers rarely carry the proper insurance. Lesson learned.
Why would any sane individual invest in a business whose model rewards criminal and fraudulent behaviour?
24
My own auto insurer, State Farm, sent an unsolicited insert with my last bill specifically pointing out that private auto policies do not cover gig driving and further, that they do not offer an endorsement for purchase.
7
@James Moore
Compared to what? Get back to me after you've tried to collect on accident damage from a taxi company, most of which are insolvent and self-insured.
1
The technology is based on cars and cars are from the 20th century.
2
@Max Rail
So is gasoline. And everyone knows there's no money in the oil business, right?
The main problem with Uber is that it is not a revolutionary invention: the founder simply saw that the already-existing ride system could be used -- through the then new popularization of smartphones -- as a larger scale service with much cheaper workforce.
Put it simply, Uber depends directly on very cheap labor and economy of scale to survive -- not reinventing the wheel (no pun intended) in my book.
And to make things worse, this scheme isn't even patented by Uber, so it can't even do the time tested strategy of profit through monopoly (profit by spoliation).
3
@VK
Uber has over 130 patents and its competitive advantage is its network and software - not 'cars' and cheap labor.
Plus it has multiple revenue streams outside of ride-sharing.
All of which is easily discernible from its IPO documentation,
Uber is a highly speculative stock. I wouldn’t invest in it. The company doesn’t have a product they can call their own. The quality of a ride share is totally dependent on the individual drivers. And the drivers seem like they’re increasingly unhappy with Uber. That just spells trouble for Uber.
4
Disappoints who? The early investors who were trying desperately to get one over on the genes public?
Riders demand low prices and will play lyft against uber or vice versa. Stockholders demand profits. Why blame uber management for low driver pay? Blame the cheap consumers and the greedy stockholders.
PS- this is a similar argument to "why blame the politicians, blame the voters who elected them and who force them into the policies the legislators enact".
2
Well the strike by Uber drivers who are barely making ends meet wasn’t a positive vote of confidence for Wall Street that this was a caring organization. Caring about petty employees
Uber was developed to destroy cab unions and work people to death with false promises. Uber is destroying the livihood of cab drivers around the world.
Capitalism of enslavement. IPOs to create millionaires when there is no real product but a desire to destroy an industry that provides a stable salary and all my goodness health care. Once upon a time cab drivers could raise a family can Uber drivers take care of a family . No way another mythical economic balloon.
The myth of Wall Street it works only for shareholders.
10
@Tony
Blame the cheap riders and the greedy stockholders. Uber management does not have a choice.
1
It's a taxi dispatcher. How much money could there be in that? There are few barriers to entry because it is not difficult to write equivalent software.
6
@Jonathan Katz
Why don't you post a list of all those competitors and post it here?
@GMooG, there would be competitors if there was any money to be made in this this area. There isn't, and won't be.
1
The idea that people are supposed to make living driving other people around and doing odd jobs for them is not the sign of a healthy economy.
16
The reason Uber and Lyft do not make the drivers employees is that these companies would have to pay employment taxes like the rest of small businesses. They are getting a huge tax break and the drivers are not getting a fair wage.
11
A lot of negativity toward Uber in the comments, so just to play devil's advocate:
Consumers vote with their wallets- over 100 million people worldwide use the app on at least a monthly basis which means it is providing many people with a service they value (otherwise they wouldn't use it and we wouldn't have this article).
We should certainly be concerned about workers' well-being in the "gig economy" but this is part of a larger story of a tech boom and the automation of human labor. In the not-too-distant future we won't have to worry about the exploitation of Uber drivers b/c these jobs won't exist.
2
A non-profit partnership (all drivers get a share/vote) would work so much better. The 'app' is outsourced and prices set and exectives controlled by driver board of directors to ensure decent wages. Growth is no longer a concern. Competition with other services would maintain balance.
2
Those writing hagiographies for taxi drivers must not live in large cities, or even take them that often. Who among you enjoys being turned down when hailing a cab because the destination is inconvenient for the driver? What about the credit card terminal that ‘doesn’t work, don’t you have cash?’ And the meter-inflating routes? The exhaust hose snaked through the plexiglass divider to provide ‘air conditioning?’
I loathed them pre-Uber and I’m thrilled to stick it to them now. I don’t care how high the rates go, I smile every time I order an Uber. Sometimes three trips a day! The drivers unfailing ask if the temperature is comfortable. They make pleasant conversation. Not needing to fight for a cab in the rain, or with a cab driver about my wanting to use a debit/credit card, is a luxury for which I’ll be forever grateful. I imagine local business are, too, because knowing I don’t need a taxi to get somewhere means I go out twice as much, if not more!
14
@Jennifer
Take the subway, commuter train or bus. Much cheaper, and Philadephia has an excellent network.
4
I disagree. If you live in Philadelphia you use Septa. That is, you use it if you have a lot of time to waste waiting around. Busses in Philadelphia are not reliable, and often as pleasant as the cabs. Septa is no New York MTA.
In my hastily written comment I forgot to note the legion rigged cab meters in Philadelphia. Let’s not forget those.
4
I travel to NYC frequently. What i don't like about Uber and Lyft is they will price in the cost of a bridge or tunnel toll, then take a longer route for me, but a more profitable route for them, skipping the need to actually pay a toll they have charged me for.
1
Uber runs under the hood on a form of digital indentured servitude at best, that is the engine. Also, while Uber has vastly improved some aspects of taxi service delivery, they have also narrowed the market options considerably for all stake holders. E.g., what about a local taxi provider who wants to have direct ongoing business arrangements with local residents as their riders -- not a market that Uber can support, so Uber then makes this kind of local service impossible next to Uber.
4
I believe that if Uber had adjusted prices to turn a profit a year before the IPO they could have taken in a lot more money.
No doubt there would have been fallout including the prospect of more competition, and complaints for customers, but from an investors POV, PE ration (price earnings ratio) is critical.
Up till now Uber shares have ridden high on the prospect of an unbreakable monopoly (well, duopoly). So now they have that monopoly position but still aren't turning a profit - it makes investors think that Uber thinks they can't keep the monopoly AND make a profit. Facebook did it (PE in 15 to 30 range), Amazon might get there (PE in 70's maybe heading lower), but maybe the ride industry is just not one where a nationwide monopoly offers that strategic profitable advantage. Uber has to bite the bullet and find out.
2
Am I missing something?
With tech stocks this is far from unusual.
I recall the Facebook IPO dropped significantly in its first week.
In fact I recall that happening with Snap and Twitter too. Having trouble finding all time charts for each but one google search showed Facebooks downward trend in 2012.
It’s not all doom and gloom they usually rally but the evaluations of tech stocks initially are hilarious to me.
@Andrew, your first mistake is thinking that Uber is a tech stock. It's not. It's a match-maker, connecting independent contractor service providers to customers and taking a cut of the action and setting the price for the service. That it uses smartphones is a detail.
As predicted.
1
Uber leaves a lot to be desired.
2
Dreadful company that abuses its workers and creates billionaires. Pretty much what is wrong in the US in one horrid little nutshell.
I truly hope it goes to zero.
14
Looses money, over pays it's CEO, pays its employees just enough to live on dog food. I want this stock!
18
The article claims that Facebook increased in value during it's IPO. It lost a lot of money. I did try to share a link that stated this but was unable to do so. I just searched for "Facebook IPO loss."
Late stage capitalism cracking.
4
Uber has seen the firing of at least 20 employees over sexual harassment allegations and the departure of its CEO.
Drivers being paid next to nothing.
City streets clogged with Uber drivers as rural areas don't have nearly as many riders.
People still use it even though it's run by disgusting individuals.
What's not to like? Sounds like the typical 2019 type of company.
10
The failure of Uber will be healthy for tech investors in the longer term, similar to the dot com bust when funding disappeared overnight for companies with no realist chance of turning a profit.
3
Maybe Uber should embrace their drivers, acknowledge that they are employees and pay them well! I deleted their app on my iPhone a long time ago.
5
Given its “kill the competition” approach and other shortcomings in its business ethics I will not use Uber; I’ll use Lyft or a traditional taxi instead. I hope others will do the same. An earlier era of monopolistic, unethical greed gave rise to important progressive reforms. History needs a repeat.
6
Uber burns its employees and poorly vets their drivers. They charge a fortune even for short trips. I don't get how millennials afford it.
4
I was in Dhaka and when you talk to the (poor) drivers and hear that 20% of the money they make goes to Uber and realize how much money earned by hard work leaves this developing country, you realize that this must and will change.
3
Disruptive innovation is not all good. Not a week goes by without a story of an Uber driver assaulting a passenger. In cities where Uber is popular, traffic is at an all time high. And, employees in the “gig” economy lack benefits. The “side hustle” is just that—a hustle.
6
The stock is down? So what?
The Uber strategy was to make money in an IPO, and to convince Wall Street to hand over the money. Wall Street lost a lot of money this week.
No one asked Uber to hand over a functioning business model that would thrive on the day after the IPO. The strikes by the workers this week, and the idea that they're using their own cars and their own insurance and their own maintenance to fund the company itself, should tell us that Uber does not have a long-term strategy of any kind.
Wall Street just enriched some Uber shareholders, at its own expense. Wall Street just threw away several billion dollars in capital, for nothing.
9
I think this is the impact to expect on the social responsibility curve. Uber lacks it, and they pay the discount for it. Nice job coming out of the gate.
2
I always wondered why IPOs that popped weren't considered failures and the ones where the stock dropped weren't considered successes.
An IPO is a sale. If the investment bankers got the sellers a good price, as compared to the buyers looking to flip the stock on Day 1, isn't that better for the sellers?
In any event, I personally think Uber is overvalued at $75 billion unless it can win the driverless car race. I know the stock drop is disappointing to all those investors stuck with their shares for 6 months, but still, $75 billion. It's nuts.
3
Right now Uber is nothing but software, office space, tech personnel, servers, managers, etc. If it moves into driverless cars it will be a different company. It’ll need garages, maintenance personnel and a huge infrastructure to support all that. Maybe it’ll work maybe not. As it stands all the physical assets that make it function are owned, insured, and maintained by individuals.
3
I find it interesting that there are so many negative comments about Uber. Whenever I leave an airport or come out of a city mall where there's a taxi stand, there are a huge group of people waiting for Uber or Lyft to pick them up. No one is getting one of the available taxis. Everyone is waiting for their ride.
Would they still be there if the cost per ride was 100% more? That's what the cost of a taxi was for me to go home from SFO.
No one is forcing the Uber driver to drive. No one is forcing that driver to pick one car over another. No one is forcing so many people to use these services.
We want it all - low cost, super-responsive, high quality service - and workers who are paid "well" with full benefits. We also want these services to be fully regulated because that's "safe." But when pushed to pay, would we so willing?
6
@Rajiv BART will take you home from SFO for $5--13, depending on where home is in the Bay Area. Faster, no traffic.
2
Ayn Rand....is that you?!?
2
@Jonathan Katz
A McDonalds burger costs a buck, while a ribeye at a steakhouse costs $50. I don't want to eat at McDonalds every night, and can afford the steak every now and then. But what I never want is to pay $30 for a McDonalds burger, which is basically what I have to do whenever I get into a cab.
1
First rule of marketing. "It takes no talent to spend money."
Second rule of marketing. "It is always easier and better to spend other people's money."
Third rule. "Always take a cut of everything you can as soon as possible"
Fourth rule: "Repeat first three rules."
Fifth rule: Disappear (the Caymans are nice this time of year, but bring sunscreen and remember to drive on the left."
9
self driving technology will make Uber and Lyft irrelevant.
every owner of a self driving vehicle will be an independent ride service ready to send an idle vehicle to your pick up point and destination...no driver required.
3
We can have all those things, convenience, clean cars, bottles of water, accountability, etc., AND pay the drivers a living wage.
5
@GeoJaneiro
As always - all over the world - you are free to pay your Uber driver whatever you want.
2
I guess I am one of the few readers who is extremely grateful for Uber and Lyft.
Before Uber and Lyft it was always a lot of hassle to get a taxi. They didn't drive to certain neighborhoods. If they didn't like how you looked, you'd get passed up on the street.
Uber and Lyft changed that.
People will complain about the working conditions of the drivers, but many of those people would be unemployed without Uber and Lyft.
People complain about happened to taxis and the value of medallions, but the medallion system shows us what happens when you grant monopolies-- people abuse them.
I appreciate all of these rideshare companies and I wish them great luck and prosperity.
16
@POW - Your rides are subsidized by the marketable promise of a nationwide (and nearly worldwide) near taxi monopoly. It's a strategy that has really paid off for Facebook (PE ratio of 15-25) and somewhat for Amazon (lPE ratio ess than before but still above 70, and abroad still losing money). But it's just not clear if Uber's saturation strategy can even go profit positive because they have never tested raising prices to make a profit.
4
@Craig H.
Uber - unlike Lyft - has multiple lines of business beyond ride-sharing.
So - no - their 'strategy' is not saturation any more than Musk's is simply electric cars.
Uber’s other businesses are lower-margin slow growth afterthoughts because their primary business has proven to be so massively unprofitable.
3
I think Uber will eventually prove to be a valuable push on the transportation industry. With the advent of free GPS, knowing the streets was no longer a marketable skill. Living in San Francisco, I agree the transportation options were unacceptable for a world-class city.
With Uber has come many problems, which will now need to be worked out — compensating drivers fairly, the environmental damage of more cars on the road, and oh yeah, pricing the product to make money. I trust these corrections will come, and we will all be better off, just as we were with factories, railroads, and combustion engines.
1
I worked for Braniff airways until they went bankrupt. They lost percentage wise much less money than Uber and they actually had physical assists. By Uber standards, Braniff was a unqualified success.
How do businesses that have no collateral and lose billions remain in business? Where is the money coming from to pay the executives?
5
@Paulie
The current financial strategy is called 'asset-light' which is obviously different than asset-based finance from the 1970's airline industry.
This isn’t the stock market that JP Morgan knew. It’s all based on speculation and since Amazon became a behemoth after 18 unprofitable years, many out there think any business can do it.
Clearly Ubers bad corporate culture and public face to communities has not recovered from it's Tenure under Kalanick.
Will it ever? Probably not.
Will these ride sharing companies every become profitable? Probably not... because they insist on competing with each other with fare reductions and driver incentives to the point where the companies cannot turn a profit.
Like all IPOs.. this is a chance for early investors to cashout before the company later on crashes from expense and debt loads.
5
@Chuck
kinda like Amazon, Facebook and Google?
1
Gee, a IPO for a company that does nothing but siphon off workers money didn’t do very well. I’d sooner stand on the corner with a sign that says “will pay for a ride to the airport” than use Uber.
6
These companies are destroying public transportation. I have a solution.
1. We let the market shape them enough to be responsive to consumer need.
2. We regulate them to be green as green can be, solar charging, whatever we need to do.
3. Once they are paradigms of efficient transportation we nationalize them.
Thanks for the business, Trav.
8
These companies aren’t destroying public transportation. Public transportation and politicians are destroying public transportation.
3
Uber business model relies on cheap contractor labor. Only way they will squeeze profit is by squeezing their drivers.
8
"[Here’s one man who has driven for Uber since 2012. He makes about $40,000 a year.]"
Just in case you didn't follow that link, here is what you missed:
"Mr. Ashlock is barely getting by. His 2018 tax return will show an adjusted gross income in the neighborhood of $40,000, better than 2016 and 2017. But he has maxed out his $3,200 credit limit at the local Midas car-repair shop and needs to come up with $5,000 to pay his taxes. He has Social Security but no savings to buy a new car that will let him keep working."
"Uber changed urban transportation..."
And they have more reprehensible changes in store for us:
"Uber has acknowledged in a federal filing that its long-term goal is to privatize public transportation around the world.
"In a document filed with the Securities and Exchange Commission, the ride-hail company reports that it seeks, as part of its growth strategy, not just to get people out of private cars but to get them off public buses and trains."
https://48hills.org/2019/05/ubers-plans-include-attacking-public-transit/
BTW, that last linked article is what real journalism looks like. How any journalist can write about Uber and leave out their stated intention to end public transit and replace it with cars and buses driven by exploited workers is beyond me.
17
Uber didn't say that, a sensationalist writer did. Uber said their market is all trips, cars and buses.
Uber buses would be great in residential areas with no buses (like mine, 2 miles from downtown, no buses, nbrs drive, should bike.) Also, hourly diesel buses with 5 passengers are wasteful.
Uber can't compete with full rush hour buses and trains but could help those with no or inefficient public transpo.
5
@Ed Watters
"BTW, that last linked article is what real journalism looks like. How any journalist can write about Uber and leave out their stated intention to end public transit and replace it with cars and buses driven by exploited workers is beyond me."
Actually.... Ubers stated strategic intention is to replace drivers completely with autonomous vehicles. Years away yet... but that IS their intention.
1
Explanations for a launch day price decline:
The rush to market scared investors as the story had too many holes, wise reaction
The IPO man on the street chasers are tired of getting sucker-punched by the big Wall Street houses, smart reaction
The Wall Street houses overplayed their hands, they are not as smart as expected, logical reaction
The Greed is Good credo is catching up with VCs, et al, realistic reaction
Uber has strayed so far from its original mission objective, going to food deliveries, autonomous vehicles and whatever comes out of Dara's mouth that buyers are not sure what they are buying, sensible reaction
These reactions are pragmatic lessons of a poorly timed IPO, lessons which may now mean Caveat emptor is now caveat venditor
9
And Uber still suffers from a toxic culture, no matter the window dressing.
3
Uber treats its drivers so badly, we hope the IPO tanks over the next few months. Go Lyft.
6
This company loses money with each fare, and the co-founders vision was one with NO human drivers (not holding my breath).
Cities that allowed this company to trash their previously regulated taxi industry have paid dearly with increased traffic (SF has 60% more JUST FROM THESE COMPANIES), and, obviously, lost revenue (medallions used to bring in large revenues).
Then there are the problems with driver compensation and benefits.
I don't see a profitable future for this scam.
10
The scam of the gig economy run by know-nothing greedsters meets the rigged stock market. Billionaires dropping from the profitless tree.
15
Uber's fundamental “business model” was to eschew existing laws regulating the transportation industry, public and private, with a number of tricks, such as hiring employees which one pretended were not employees, causing unfair competition to official businesses. Indeed, one can send work to slaves and reap most profits, if one violated the spirit of the laws.
However “We The People” is started to guess that it is all what Uber and its ilk is all about, and those invested in Uber also guessed the citizenry was going to crack down on this sort of malfeasance. Hence the rush to go IPO and beat the enactment of laws to rein in such heist and hijack of the Republic...
The “gig” economy is not an economy, it’s serfdom, minus the advantages thereof. Better technology should allow to improve civility, not destroy it.
13
Regarding driverless cars, Uber will then have full liability when the car causes a fatality. There will be natural human fear that arises from their accidents. People will also see that a dumb car, devoid of human intuition and perception is no replacement for a human being. When a dumb car follows the asinine and destructive gps to a wrong pickup spot, what will the company or rider do?
3
Right now I have been reading numerous comments on Twitter describing how women - especially those traveling alone - have been sexually harassed and threatened using either Lyft or Uber. Why haven’t we seen any more reports in the mass media like this before? There needs to be be more public awareness of the fact that a solo woman passenger is particularly at risk using these “services”.
9
@Maureen People are not made aware of it because it's not true. A woman is no more likely be harassed in an Uber than in a taxi or on public transportation.
During all this time, not a single so-called 'smart city' bothered to hire a summer intern to hack together a ride-hailing app for its taxi services?
5
there are several taxi companies in Minneapolis and St. Paul that have apps for hiring a taxi.
1
It appears someone actually read the prospectus.
13
Good! That’s what the greedy owners, executives, and managers deserve for mistreating drivers
8
Wall street is the home of modern day pirates.
4
They lose money on every ride but make up for the loss with volume.
Like that old carpet cleaning business
5
Look, those initial valuations don't come out of nowhere. Instead of complaining, take a look at the numbers. Think of what price you -would- pay, and place a limit order at that price.
People were deeply skeptical about facebook's IPO; how does 5x your money in seven years sound? You would have done even better if you'd bought in during the stock's initial decline.
1
Maybe this will add a sober note to evaluating a lot of gig economy stocks and other social media stocks which we can live without-we did live without them until about ten years ago-there are too many Silicon Valley millionaires and too few middle class or struggling poor who are benefiting from the technology which they provide.
6
To buy a massive loss making company's stock, near the end of an economic upturn, in a market that could change just as fast as the music business did (CDs, Napster, P2P, streaming, ...), is just pure speculation: hoping to pass the stock along with a profit to someone else before it crashes, just like some of the early investors just did with the IPO.
6
@Anne "Hoping to pass the stock along with a profit to someone else" is the entire foundation the markets are built on. The only goal is to not get caught holding any particular stock before it crashes. Most people would be be off investing in a low cost index fund.
2
"Uber’s Stock Disappoints...."
Good! May the trend continue.
17
Not sure why I would pay money for an asset that looses money. I tried to short it this morning but my brokerage couldn't get shares to loan..
I'll go long if / when they have a legitimate business plan for profitability.
6
@Some Dude
The plan is for the founders' profitability. For everyone else...not so much.
3
$82.4B for what? They don’t own anything, they don’t produce anything. Seems they just are middlemen managing data for an unregulated taxi service.
55
@Chad
And still managing to lose billions? No wonder they are saying pay no attention to profits. Is it just me, or does it look a bit like a Ponzi scheme that is proud of being a Ponzi scheme? I'd be more interested if the founders promised not to sell their shares until the company made a profit. Oh, they sold out long ago? What a shocker.
6
The large institutional investment firms like Softbank have already received a big return on their investment. Ditto for the Uber founders and executives many of whom will cash out on stock that cost them nothing. The workers including the under paid drivers will end up with little to show for their employment with Uber or lyft at least in the short term.
12
Not sure how a business model that bleeds loss even goes to market.
25
@Ghost Dansing I'm perplexed as you are about this. Maybe their business model is to hope that they become profitable some day, like Amazon.
3
@Ghost Dansing
That's what you said about Amazon too, right?
I live in the largest city in North America without Uber - Vancouver.
We have a taxi cartel that won't pick up rides to the suburbs, poor and rude service and not enough licenses - just ask ANY cruise ship passenger when their boat docks … just talk to Mothers Against Drunk Drivers.
Uber despite all its faults - and there are countless - would add competition and raise the bar for our little backwater town held captive by the taxi lobby.
20
Millennials love ride share because it's cheap (definitely cheaper than owning a car), and it's convenient. Who could argue against those, really? But, that does not make for a viable business model. Its economics have been funded by VC's with deep-pockets who are more interested in taking down existing infrastructures and legal frameworks to suit their needs. Now that they seek their exits, ride shares like Uber and Lyft could no longer hide behind their coattails. That's why, just a few weeks into its IPO, Lyft is already announcing that it will no longer break out its booking revenue (one key indicator of its performance and viability and how much discount it's really doling out). In all likelihood, Uber will follow suit. I would relish seeing all these princelings (no, they are not emperors yet) having no clothes on.
What we, as a society, should have done, is some soul-searching. There's been much chatters condemning Uber. Its bad corporate culture notwithstanding, its business model relies on exploitation of its drivers (that provide both the service, the car, fuel, insurance, and time). Seeing the drivers band together to strike, is a good start. But if Uber pays so poorly, why continue to work for them, enriching their pockets? And what of its customers who continue to use its service, knowing full well the heavy, hidden costs of low price and convenience, yet willingly turn their cheeks the other way? Don't even get me started on politicians who have no spine.
20
@tiddle I suspect your average Uber user, if they added up the cost of all those "cheap" Uber rides would find, unless then live in NY, SF or BOS, that "ride sharing" (gypsy cabs) are more expensive than owning a car. If they Uber to and from work @$10 a ride, that's $20/day or $400/month. Yes, you can own and operate a car for that.
2
But if you live in one of those cities you also have to pay to park it, and put gas in weekly. $400 a month is minimum for owning a car in NYC, trust me, I know
10
If you lived in one of those cities you wouldn’t drive to work....
5
Uber’s central server model will eventually be replaced by software that works peer-to-peer with drivers rated on reputation score.
Uber and Lyft, ironically, are an unnecessary intermediary themselves.
14
I was with an Uber driver who told me he drove almost 12 hours and kept awake with caffeinated drinks. And he said it was not very profitable and was planning to give it up. What troubled me was that Uber and probably Lyft are not monitoring the hours their drivers spend on the road. The probability of an accident unnecessarily increases. I am not sure how Taxi companies handle this problem, but suddenly self driving cars look very safe to me.
Seems to me they have a lot of problems they might need to address before they become wildly successful. Sadly nowadays it’s about immediate profit for already rich investors irrespective of whether the company is addressing many problematic aspects of this new face of transport.
11
@Meena
they both monitor, and limit daily driver hours
1
By deliberately subsidizing rides with investor money and cornering the market, Uber and Lyft are driving taxi drivers out of business. This on its own is a prosecutable crime if there were any honest law makers and state attorney generals left. Now compound that with the fact that a good chunk of investor money flushed downed the drain is coming from pension funds and other entities playing with Joe six pack's 401K. How Uber treats its drivers is well known already. So, we have putative criminals playing with free money doing their best to drive hard working folks into corporate slavery with no employee benefits and protections. But hey its alright, it is a west coast company bringing tax money to CA, the land of prosperity and liberal values. As long as they have LGBTQIA protections in their corporate charter, its all good.
7
@Barbarika, A large chunks of Uber's funding came from VC's and sovereign funds. They are NOT pension funds. This is not while uber remains private. Now that it's going public, if its market cap gets sizable enough on the initial pop, index funds could get sucked in (even if it doesn't want to). Pension funds and other mediocre fund managers would jump on the bandwagon too. But, if uber's (and Lyft's) business model isn't really viable, it'll come undone soon enough. Give it a year's time, and you'll see it languish. And then customers will ditch it (since it can no longer provide the steep discounts and heavily subsidized price). In that sense, seeing uber go public, is actually a very good thing. I've had enough of its unicorn "myth" long enough.
3
@tiddle
where do you think VC money comes from?
IPOs used to be a way for a company to raise capital to expand its business.
Uber's IPO is a way for early investors to dump their stock on whoever is gullible enough to buy it, in order to get back some of that early investment.
Big difference.
95
It didn’t disappoint me. No profits, abuse of its employees, and spying on the ridership. What could possibly be wrong with that?
26
I am breathing a sigh of relief that Uber's IPO has been underwhelming. It's success is dependent on the destruction of public transportation, which should be part of our global effort to combat climate change. But we aren't out of the woods. This company needs to completely collapse and disappear.
76
Uber's, and Lyft's, business model is unsustainable. You can't build a business on pixie dust and happy words.
24
It is all about valuation. Lyft is currently valued at $15 Billion down from an IPO valuation at $25 billion. it loses money. Uber is essentially the same company, but with more investor money. They valued it at $80 billion at the IPO. They loses more money than Lyft because they have more money to lose. This is a short seller's dream.
10
I’m already convinced Silicon Valley is inhabited by people who don’t understand the real world. Uber is just the most recent proof. For example, evidently Uber's Big Dream is essentially to replace all taxi drivers and truck drivers with AI or something. These are middle class jobs we’ll be losing, people. How are we supposed to eat if we lose our jobs? People involved in the world of tech, dealing in the millions of dollars, have no sense of right scale. What kind of drag do they inhabit every day?
9
@ohdearwhatnow Uber doesn't even have any working driverless AI. Assuming they even had such software, do they plan to buy the vehicles to install it on? That is a totally different and much more expensive business model than the one they have now, which relies on other people paying for and driving the vehicles. Driverless Uber won't happen without massive infusions of cash.
6
@Watty
It's not going to happen in any of our lifetimes.
I won't say never, but hey I won't be alive so, self driving cars with NEVER exist. It's a complete scam. The problem is too complex. If you think it will I have a 737 Max I'd like to sell you.
1
The "business model" of Uber relies on is the severe economic opportunity stratification which, after decades of widening, has now reached a crescendo with non-professional well-paying jobs near extinct.
By shifting the most costly components (vehicle lease/purchase, vehicle maintenance, cell phone connectivity, insurance, etc.) of their business to their "contractors," they provide mainly customer connectivity, logistics, and absolute control over reimbursement.
How does one fairly value an organization based on this business model? My sense is that their infrastructure has little or no moat, they own few assets, their workforce is obviously unhappy, and their prospects limited.
While their backers will undoubtedly do well, their investors may not.
24
Having lived in SF for many years pre-Uber, I can tell you that the taxi services were unreliable, expensive, dirty and customer-adverse. My first Uber ride came with a clean vehicle, water, value and accountability. With scale came a decrease in some of these attributes, but no one can objectively claim that Uber hasn't raised the bar in service and provided much need transportation alternatives in under served areas. Something the taxi oligarchy in SF was never going to do on their own.
118
@JP While you didn't like the taxi service, it was sustainable, Uber and other services are not. The reason why Uber seemed to work was because people had yet to figure out that it was unsustainable. The exact same thing happened with the first dot com companies.
Eventually, people will figure out that these are all basically Ponzi schemes built on cheap money from the Fed. Maybe we should fix the cause instead of covering up the symptom. But, that might reveal the fatal flaw in our entire economic system.
"Don't double down on dumb."
36
@Dad
Clean car, polite driver, accountability - those could have been provided for free within the taxi model, but they weren’t.
22
@Dad
Taxis are not "sustainable" - that is fallacy. Many were going into bankruptcy even before Uber; hopefully now, they all will. What most people don't seem to realize is that most Taxi companies are not really insured. Rather, they used their political influence to get the cities to allow them to "self-insure." As a result, many accident victims found out that the companies had no money to pay claims.
Good riddance to bad rubbish.
12
Uber could've been so much more. It could've enabled a true sharing economy where consumers pool together to avoid multiple individual expenditures on fixed assets, such as cars, by ensuring they only pay for their share of the use. But instead Uber just started ripping off drivers. So instead of a market-revolutionizing idea like the mutual funds, it's more like a hustling business like vacation time-share.
98
@William Fang Uber was never about "sharing". Take a look at the founders. It was all about the money.
7
Most tech-driven companies rely economies of scale to lower costs and grab market share. There are few economies of scale in service businesses like this so lower costs come by paying drivers less, self-employing them and providing no benefits. Drivers, therefore, are effectively subsidizing the rides and enriching shareholders. So you hail them with an app. So what? Drivers are unhappy. How does this not end badly?
231
@Sheriff of Nottingham Self-driving cars
2
@Sheriff of Nottingham
And yet the founders, executives and investors make multi-millions or billions on unprofitable ventures.
3
Uber and Lyft are both betting on autonomous vehicles. It’s the only way to make their business models work. If the technology becomes available in the next few years, it’s not going to end badly, however that outcome isn’t guaranteed.
1
I have been confused by the hype around Uber. The company has never made a profit, and its business model is based on exploiting legal grey areas (and/or actually breaking local laws). This IPO shows that hype, buzz, and good press are no replacement for business fundamentals like actually turning a profit.
218
@Jack
Um, it's made a great profit for its founders.
Which was the entire idea.
96
@Jack Like many tech companies (e.g. Amazon), the stock price is built on dreams of what the company may become. No one is buying Uber shares based on its current performance. It's basically all a bet that Uber's network and market share will be worth far more once autonomous vehicles have replaced its drivers.
12
@Tyler Amazon could always have made a profit. They poured earnings into expanding their operations. Uber and Lyft can only make a profit with driverless cars, which is very speculative, and makes it a very, very long term payoff.
16
I suspect that what happened was that investors were watching it closely for the last week or so and knew that the reason the drivers were on strike is because the wage they were being paid was CUT so that the company would look MUCH better to investors.
That meant that there was no way to really determine what the actual value was.
Uber thinks we're stupid.
Pay attention, investors. Nowadays if you are conned there's no way you're getting your money back.
42
@rosa, you would be surprised to see how many mediocre VC's and angels pretending to know-it-all, yet doing only the me-too things that everyone else is doing. For those investors, I sure hope uber IPO ends badly and burn 'em all.
8
Great! Anyone who buys stock in this outfit is directly contributing to the race to the bottom for Uber drivers and anyone else in the so called gig economy.
13
While I know this ship has pretty much sailed, it still baffles me that this company has been allowed to 1) exist, 2) operate what at least initially was an illegal business model, 3) Put passengers at risk with poor screening, poor training, and lack of insurance reqirements, and yet in spite of all that, it has steam rolled regulators, various jurisdictions and countries, and competitors to become an $82BB windfall for the guys that started it. I used to think the NYC Medallion system was the biggest scam ever. That opinion has been revised.
Whats next, internet based medical procedure booking? Don't need to be a doctor, just have some sharpe instruments, some needles, and some thread and yer good ta go!.
How about UberAir ....... who needs good pilot training, flight schools, those pesky FAA regulations...... anyone?
As long as it's booked over an internet app, anything goes....
27
@YYZ agree. The fact that Uber was and is making giant losses also proves that they use predatory pricing to destroy competition (taxi co’s), which is a violation to antitrust law.
11
@YYZ "Too big to fail, or too big to sail?"
So much of our economy is literally doomed to fail. Uber and the like are another iteration of the dinosaurs, just waiting for the asteroid to strike.
7
Morgan Stanley did very poor due diligence on this IPO. They should be punished as they will be. Let’s face it this was a lot of Uber hype, and if Morgan Stanley had done their due diligence then they either would not of done the IPO at this time or they would’ve come in at a far lower price and bitten the bullet.
But instead they plowed ahead. Kind of reminds me of Boeing doesn’t it? What a disaster. The Titans of Wall Street as we all know in many cases are greedy. Caveat emptor.
8
Yet another sign that the next downturn is coming. When all these loss-making companies with no barriers to entry in their business IPO so that the original investors can cash out and leave the suckers holding the bag...it's time to hunker down.
9
The stock’s decline on its first trading day is actually a good thing, as it helps restore some sanity to the VC marketplace. Maybe I’m not enough of a visionary, but an $82 billion valuation for what is basically a taxi company seems excessive to me.
4
I know of people that drive for Uber and combine that with making deliveries for Amazon as an entrepreneurial way to boost their "businesses". It might work for them, but if the regular drivers can't make a go of it and the parent company is also losing, is the business model valid?
5
@Gery Katona In a word, no. But, I think your question was rhetorical.
I've only ridden Uber 3 times, but that was enough to get a flavor of the company. The cars were so, so, the drivers respectful but tired looking, and the low fees for riding unsustainable for the time and miles driven.
Uber is losing money because the fees they charge are insufficient to cover costs. So you increase revenue while holding down overhead costs. So you raise the fees, but then business slumps, so you lower driver pay, and the drivers leave. It's called Catch 22.
10
they don't break even, so the costs of rides seems cheap because they are being subsidized by uber itself. folks complain about taxis but that is actually self-sustaining.
uber is a glorified gypsy cab service except the drivers don't get to set rates. so driver burnout, churn, and not sustainable.
24
I took one Uber. Never again. I don't like the whole "you threw up in the car" and now your credit card is charged $150. You complain, they have pictures, of something that had nothing to do with you.
2
@Wayne Arrington
So one your one Uber trip, you threw up in the car? Or are you just complaining about something you read on the internet, and assuming its what always happens?
What a day for an IPO! Trump tanks the China trade talks and the stock market, and Uber goes under its initial offering price. This is not rocket science. Uber can blame Trump directly for this disappointing initial offering.
9
@William O, Beeman
Yes, of course, because there are absolutely no other factors operating in the economy today that might affect an IPO, and IPOs never dip below their offer price.
5
@William O, Beeman
This actually might be the only thing which isn't Trump's fault.
Uber has no assetts. There is nothing there, just some software and underpaid drivers they share with Lyft.
1
The DOW turns positive because Mnuchin says talks were “Constructive” after tariffs were raised to 25 percent and the Chinese walk out the door with mud on their Faces. I am missing the positive here unless everyone is going to but TV’s , appliances and couches this weekend like it’a Black Friday!
1
Why is this surprising? It is an IPO driven by greed of a business that has never made a profit and warned that it may never do so. It was not focused on creating shareholder value for its new investors, and the market reaction shows that people noticed. There is no rational, defensible basis for Uber's IPO valuation other than lots of prior investors wanted (indeed, needed) a high valuation to justify their prior investments. The suckers are, sadly, retail investors' 401k mutual funds into which this stock will have been aggressively placed.
8
This Uber IPO is little more than a Ponzi scheme designed to enrich founders and early investors.
Given that Uber's per-ride losses exceed the potential savings from moving to driverless vehicles, there is no route to profitability, except to raise prices to reflect the true cost of the service. And, awkwardly enough, Uber usage has already proven to be highly price-sensitive.
Anyone who buys into this IPO deserves every cent of loss which comes their way.
30
Stocks are always a risk. As long as they have to pay drivers, Uber will not be profitable. Once driverless cars are fully developed, they will make more profit minus the car/gas costs, which they will probably push onto the consumer anyway. Whether or not they will get to that point is a gamble, due to competition. Currently, it's a good chance, since they already have a huge consumer base.
My guess is driverless cars is the potential profit that investors are looking at. Sadly, i don't think they care about human drivers..
4
@nyc333 They'll burn through so many billions before self-driving cars become viable that they won't be able to afford to purchase the millions of self-driving cars they will require. Assets that cost cold, hard cash.
12
@OneView ...Yes, precisely the risk. Personally I think they should fail unless they strive to be more ethical, which seems unlikely.
1
It looks like a successful IPO to me. Is a loss of a few percent a "stock tumble"? No.
7
@Karl Actually yes, it is a tumble. Initial offers are deliberately underpriced. It's a common practice and any negative movement is most definitely not a success story- especially given that the company has been lowering and lowering its estimated valuation in recent months.
3
Whatever, it wasn't a disappointment to the five buddies of mine that work there that just had the biggest pay day of their lives, I don't think it was a disappointment at all so let's be mindful of your audience.
These guys worked hard, yes they're young and a lot of people, especially on this column, would probably hate them but they're smart, they put their hours in and now they can retire. This is capitalism and it works.
6
@There Nice capitalism if you can find it. Your buddies made out fine. Not so much the poor Uber drivers who are lucky to make 10 bucks an hour while execs pocket millions
22
@There
They put their "hours" in and now they can retire. Comical!
3
@There Thanks for the discussion.
The problem with their business is that there are no barriers to entry. As the Times reported last week, wherever Uber goes, local competitors spring up and undercut them. Literally all it takes is the app technology, which is simple enough.
My prediction is that as ride-share services proliferate, the next innovation will be a pricing marketplace, not unlike Kayak or other airfare aggregator services, that will show you all the cars available on the various services together with their price. Once that exists, why would anyone choose anything but the cheapest provider? As it was before Taxi cabs were regulated, it's a race to the bottom in terms of price.
Uber is talking tough about morphing their business model. My guess is that it's essential if they want to survive.
15
@Todd And every driver can drive for any one of those services, so the only flexibility will be on the provider's share of the fare (since the drivers will work for the largest total fare take).
The effective margin in such a business won't be more than 10% and more likely 3-5%
3
Amazon did not make a dime its first 9 years of existence. Now one of the most profitable and highly valued corporations in the world, by market cap.
Uber has brand, market penetration, and a service millions use and value. Seems like a good bet to me.
2
@Space needle That's all true and known: The unknown is whether it can be profitable.
@Space needle
If you can wait 9 or more years.
Each investor makes their own decision. Those who waited with Amazon were rewarded with a 1000X return.
So Uber and other tech startups have proven that those at the top can make billions on a "business" that can't turn a profit.
Is it any wonder we have a grifter in the White House?
152
It has never made a penny, a cent, a duro, a rouble, a whatever, its business model is to exploit the lumpenproletariat, sorry I meant to say grateful participants in the "gig economy" and to ignore local laws and regulations (i.e. operate illegally) in order to grow, grow, grow at all costs, all the while not making a penny, a cent, a duro, a rouble, a whatever.
Uber is simply a parasite and will itself very shortly be disrupted and rendered redundant by driverless cars.
61
@Jordi Pujol You appreciate that no one is pushing harder for driverless cars than Uber, right? With a fleet of driverless cars, they will reap 100% of every fare, as opposed to the 20% or whatever it is now.
2
@Todd They will also have to purchase the cars, service them and have property to store and repair them. WHEN the technology is perfected. Very different business model than using the resources provided by drivers who are often desperate and subsidizing Uber much as investors are.
16
@Todd: Uber currently pays $0 for cars. The drivers pay. 100% of driverless car revenue also means 100% of the costs to buy, maintain, insure, and operate the cars.
And this is completely aside from the fact that driverless car technology is years from being ready to release into the wild, regardless of how hard Uber pushes.
8
Uber didn't get the Lyft they were expecting.
133
The only thing Uber has innovated is the foisting of costs for delivering a service onto the backs of working class individuals while fragrantly disregarding the rule of law in an effort to capture value for a handful of tech elites and large private investors.
197
@Dawn Askham Yes, that's part of it, really, most of it. But there is also a "real" economic benefit -- they increase the capacity utilization of the driver's car. Another way of expressing it: they increase the total value of the return on capital invested in the car. How much of that go to who is a separate question.
2
@Ken You were so busy answering the 'How' question, you forgot to ask, 'Why?'
That's the inherent problem with Uber. The only way this company is sustainable is with driverless cars. The 'future' they need is one without people who need to work. The technology is premature, because billions of people need to die first. But, if billions of people die, they won't have economies to exploit. Somebody didn't think the business model through. Either that, or it was always a Ponzi scheme. Uber was never going to work in the long run.
I see all those scooters around and recently discovered that they are a money losing proposition. Without cheap money from the Fed, they would never have been created.
5
@Dawn Askham > while *fragrantly* disregarding the rule of law <
They're flagrantly disregarding the rule of law, and it stinks! :)
4
Welcome to the new serf class using cars instead of hoes.
29
As a driver and rider for Uber and Lyft, I am astounded that both companies continue to post losses. They staff huge offices throughout the country with backroom and driver-facing employees. Most of these jobs, I imagine, could be eliminated tomorrow without a hitch in their ridership. The technology has improved drastically which seems like a capital investment. Drivers wages have increased and we demand our fair share of the fare. But for the most part, I see a lot of backroom, corporate waste which could be supplanted by AI and proper management.
5
@Joshua Then you should make up a business plan and shop it around to venture capitalists.
Uber and the gig economy : ten steps backward for humanity with a business model built on exploitation and quasi-feudal dependence. The hapless Uber drivers find themselves quickly cast into a debt spiral when they are forced to take on more hazardous hours of driving simply to maintain their vehicles in functional shape. As for Uber Eats, I have the impression of seeing a Western version of rickshaw drivers parachuted onto the streets of Europe. Watching these emaciated bike jockeys slalom through busy traffic merely to quickly deliver hot slop to customers too 'busy' to retrieve a take-out meal themselves… there is nothing to admire about Uber, just a cautionary tale of what may happen to the work contract when we all return to the eighteenth century status of 'jobbers' hoping for our overlords to offer us a day's task for a few crumbs.
51
As always...fortune favors the bold.
1
$82b for a Gypsy Cab Dispatch Service? I'm not feeling it.
57
I've seen this before, where investments are over-valued to build up a company, even though it is a false front. Morningstar participates in this, too. I got rooked into an investment account by a most-highly rated company that turned out to be severely average. The fact that Uber has never made a profit and operates too-often illegally should be enough to steer anyone away from it.
4
Since the prices of virtually all stocks are below what they were on the day of Uber's IPO, Uber's price decline doesn't seem to me to indicate much.
3
Uber has no prospect of making money while paying their drivers, much less at a living wage. This is a Madoff/Ponzi scheme if there ever was one.
57
@Shillingfarmer That is what printing money gets you.
"Too big to fail, or too big to sail?"
Uber reminds me a lot of Bitcoin, which reminds me a lot of Donald Trump.
From the beginning of both Uber and Bitcoin, they were clearly, blatantly and proudly in violation of hundreds of existing laws; they just ignore the laws they don't like while onlookers wait in good faith year after year for someone to enforce the law and shut them down.
There are good reasons that New York City and other cities require cab drivers to be licensed and limit the number of cab on our streets. Similarly, there are good reasons why financial regulators license and regulate banks and money transmitters, require banks to have anti-money laundering and know-your-customer policies, issue money transfer reports for amounts over $10,000 and complete transparency to FINCEN and law enforcement.
How do Uber and BitCoin deal with these requirements? They just ignore them and we wait for regulators to apply the same standards to these companies that they do to everyone else. A couple unintentional but reasonable slip-ups and a cab company or bank can find themselves in extreme peril, while these companies just do as they please and get away with it.
It feels a lot like how every politician other than Donald Trump is expected to follow exacting standards and are swatted in the nose by the media whenever they get out of line, but somehow he prospers from violating everything he feels like.
Uber has now made millions by unilaterally deciding that the rules just don't apply to them.
87
@JSD Have you ever wondered who would create Bitcoin under a psuedonym? Who would want to transfer wealth out of the petrodollar system? Why did they choose 2009 to do it?
If you find yourself being attacked in a moment of weakness, it was being planned for a long time by your adversary.
@JSD To be fair, in many cities, taxi cabs were running rackets of their own, artificially limiting supply to fatten their own wallets.
Slack, another app mentioned in this article, is an excellent product, and I hope it succeeds.
1
A clear and painful lack of understanding of business models and technology.
I wish this would be a wake up call for the general public but probably not. The founders and executives have made their billions now while the drivers and average employees get left with nothing or at best meager stock options. Uber can’t be profitable. Their S-1 states that they want to capture the public transit and cab markets. What about in places where regulations don’t allow for Uber? What about people that just don’t want to use Uber? They’ve successfully hyped their business and it no longer matters for them if it’s ever profitable. People and companies shouldn’t be allowed to do this.
18
81 Billion is a bust? When will investors start putting money toward societies' enrichment, e.g. workers, envronmental restoration, education and the arts?
16
@Allison The short answer is: It's not their responsibility.
8
@Ken absolutely is all of our responsibility, and especially those who are living comfortably, beyond subsistence.
1
And what happens when they stop subsidizing themselves to the tune of $3,000,000,000 a year? How many credit cards do you have that give you über credits? I’ve got like 6. Though I’ve never used it and never will. The people who lose money on these stocks deserve it.
25
Is Uber really that much safer than a hitchhiker offering to pay the driver that picked him/her up?
30
@Tony Yes. Uber and Lyft, all Ride Share Apps, are connected to a driver that has had at least some vetting and are now in a computer system. With hitchhiking the vetting process is a lot less. Unlike hitchhiking, your personal identify is connected to a computer system in Ride Sharing Apps.
5
It’s less safe actually. Hitchhiking is random. Bad drivers can target Uber.
2
If Uber treated their workers with respect, paid them fair wages, provided regular working class union benefits, then maybe they could create a profitable company.
Yes, I'm glad their IPO was a bust. Unfortunately, in this anti-labor, pro-business republican/Trump environment, Uber and all the rest won't start treating workers well until workers take matters in their own hands and form unions and strike. Enough is enough. Too few people are making too much money.
What I don't understand is why democratic controlled states, like New York, even allow Uber to operate? I can see the republican controlled "right to work (for less)" states loving Uber. But why would worker-friendly, union-friendly states let them in?
57
You appear to have absolutely no clue about how business works.
If Uber did all those things you mention, they would have been out of business after a year. The reason they were able to grow so quickly was very specifically because they do not have any of the fixed costs that other transportation businesses have. That is why they have been able to spend billions on freebie promotions and lower prices than the traditional competition (taxis).
3
@Paul And lose money by the billions! It's the Donald J. Trump School of Economics!
(A division of Trump University.)
13
Uber’s “disappointing” IPO clearly shows that American investors are not complete fools.
59
@Maureen
Don't count this IPO dead! Facebook started its' IPO at $ 37.00, and it dropped in 2 weeks to $ 22.00. Look where it is now!
Couldn't happen to a nicer bunch of people
63
Somewhere in a special Circle of Hell, 19th Century snake oil salesmen and 20th Century swamp land scammers are smiling on admiringly.
33
And another face-flop by advisers Morgan Stanley and Goldman. Weak, no-backbone pricing counsel making their client look weaker on day one.
13
I'd not pay $82,000,000,000 for any app.
2
Was Uber ever a real company or just a financial instrument for wealth transfer?!!
All the talk about how many billions the founders/early investors were making, in contrast to the -1.8Billion in losses in the balance sheet make it clear the priorities are off.
The numbers alone: billions raised go to management/Investors not the actual company, should tell us what the priorities were. We don’t need to get into the morality of what they do to see that they are selling a pump and dump scheme. The numbers speak for themselves.
Th public markets should know this pyramid scheme was bound to crash sooner or later.
78
Sooooo, if a person who owns a car is qualified to be a cab driver. Ergo, a person who owns a pipe wrench is qualified to be a plumber and owing a hammer qualifies one to be a carpenter. $80 billion. Sheeesh.
59
@Big Dan in Michigan there are many legitimate problems with Uber, but I don't think lack of driver expertise is one. For the most part the system works pretty well. Perhaps experienced drivers with GPS already have the requisite skills to operate a taxi, where plumbing and carpentry skills are less common.
2
@Big Dan in Michigan Please, you make it sound like cab drivers are consummate professionals. Never been my experience. I get much better service from the ordinary folks who drive Uber/Lyft than I have ever had in a regular dirty, unmaintained cab. Also, the reliability (ie getting a ride) of Lyft and Uber are light years beyond a regular cab service. I agree the valuation is insane, but Uber and Lyft have been of value in my life for sure.
4
@M. You are missing the point. Uber is not profitable without driverless cars. Basically, we need to massively reduce the population of humans for Uber to be profitable. But, will our current economic system exist without a huge human population?
So much of our economy is literally doomed to fail. Uber and the like are another iteration of the dinosaurs, just waiting for the asteroid to strike.
3
There’s nothing wrong with Uber’s business model. All they need to do is raise prices gradually. There aren’t any real competitors other than Lyft, which would quickly follow suit.
I don’t get this worker exploitation whining. Driving for Uber is voluntary. With unemployment at an historically low level there are lots of opportunities for people who feel they can do better.
11
@Charlie B Right, no competitors whatsoever, except all taxis everywhere.
10
@Charlie B Just write an app and start signing up drivers. Pay the drivers 90% of the revenue. Where's the barrier to entry? Drivers will flock to your app, improving your service, Uber's service will suffer. Their entire business model (no employees!) is designed to facilitate competition. I don't even need to train drivers, they'll sign up and prefer my dispatch service in an instant.
You don't need competitors, you need potential competitors to never make a profit.
6
@Paul If taxis were working well for people, Uber could never have come into existence. In many places taxis are dirty rundown vehicles operated by surly drivers who communicate poorly, and they are scarce when most needed.
I didn’t say there was no competition, I said there was no *real* competition.
2
Of course trump will destroy the good economy Obama left...He does not have the "stuff" to fix anything...Tariffs are old and outdated and ridiculous just like most of trump's ill thought out policies.
8
Yeah....this makes a lot of sense....a bunch of rich people just getting richer......great stuff.
Prospects for long term success = zero
How do I know? Let's look at my last 4 Uber rides in Cleveland:
1) Driver needs to stop and get gas at one of the most unsafe gas stations in town
2) Driver claims that his car needs some parts....we literally stall out in the middle of rush hour during a pounding rain storm on the highway
3) Driver is clearly mad about something......making all of us somewhat afraid
4) Driver takes a route through the worst part of town at 4a.m. (maybe not his fault due to the routing of the software)
Oh....and drivers are not employees, so no living wage, no benefits, etc. Just wait.....the already low standards will become even lower as shareholders demand "profits".....the only problem is that the smart money will be long gone by then.
46
@Mark
So, then using Mark's "logic":
- the US Taxi market is doomed, because I once had a ride in a taxi that broke down, and so did 3 friends
- if 4 people in the US today gets sick at McDonalds, that business is worthless
I hope Mark has people to take care of him
1
They have never made a profit. Why would anyone invest? IPOs for these types of companies just a get quick rich and loss recuperation scheme for the founds and venture capitalists at the expense of the gullible investors. Companies should not be allowed to IPO without a clear profitability strategy.
I have a bridge for sale in Brooklyn if anyone is interested.
12
They've never made any money. Ever. How can their stock be worth anything? Even in an economy as speculative and almost virtual as our tech sector, making money may still account for something.
5
An app is not a business. Exploiting workers is a very old business.
190
Seriously, this business is an app supported by, probably, mostly unemployed, underpaid, unprofessional drivers, using their own cars. An idea whose 15 minutes could be up with the next app, or Amazon drivers adding passengers during their deliveries so they can earn minimum wage.
94
@JP
So out of touch. I hope your grandkids are taking good care of you.
Warren Buffet may seem old fashioned. His approach to investing is not. Why would anyone invest in a business that cannot project when it will be profitable? Investing in Uber is based upon the bigger fool theory. Will some one come along and pay more than the issue price? Not likely.
47
I know most people are rooting for Uber IPO to fail, since all the big shots usually get first crack and buy things up early, if it goes down right out of the gate the rich and powerful get stuck, and since they are always sticking us, it's good sport. But Uber is still making billions on the IPO, they set the price at 45, which with all that stock out there is a pretty penny indeed.
@Lonnie
Companies don't make anything on IPOs. Money is made or lost by the shareholders.
1
@GMooG and who are the biggest share holders? Did Garrett Camp, co-founder of Uber put up 5 billion of his own money?
1
GMoog - I am not an investment banker, but I do know that companies make piles of money on IPOs, that is why they have them. To raise cash which can be used to help grow the business (or to spend wastefully and drive the business into the ground), and to provide an off ramp for early investors. Investment bankers and lawyers also make tons of money on the IPO. But pretty much anyone who buys on the IPO is a sucker. The good money has already been made.
2
Some drivers qualifications are questionable to say the least.
But basically it is a good idea especially in areas where is no taxi service. Competition is very necessary in markets like NYC where the medallion for cabs went up close to 1M. Pure speculation. So the fares went skyrocketing.
2
@Newscast2
"Some drivers qualifications are questionable to say the least." Not compared to taxi drivers.
3
I tried Uber once - in Los Angeles. I needed an early morning ride from a hotel in West Hollywood to LAX. The Uber car was already 15 minutes late when I called a cab. The cab arrived about 8 minutes later, closely followed by the Uber. As I got in the cab the Uber driver lowered his window and cursed at me. Result: I will never call for an Uber car when I can choose a traditional cab.
30
Unsure whether to go with the person who tried Uber once and had a bad experience or the thousands of people who have used it thousands of times and have generally been satisfied.
26
@R.F.
I will never call for an Uber when I can choose public transportation. Which now in the wake of Uber, pitifully awful American public transportation systems are likely to become even worse.
15
@R.F.
I'm no fan of Uber but that scenario could've just as easily gone the other way.
2