Bleeding red ink at $90/sec

[iamlost]

From:
Uber picks Dara Khosrowshahi as its new boss, The Economist, 29-August-2017.

Uber is growing quickly but bleeding money: in the first half of 2017 it lost around $1.4bn.

That's

60 seconds * 60 minutes * 24 hours * 365 days = 31,536,000 seconds in a year.

31,536,000 seconds / 2 = 15,768,000 seconds in half a year.

$1,400,000,000 / 15,768,000 seconds = $88.78/second

The first 6-months of this year Uber lost almost 90USD each and every second. Uber has bled so much red ink I'm not sure there is a miracle large enough...

None of it in my direction, however, as I take licenced hire vehicles; for much the same reason I buy my books from local bookstores and stay at B&Bs or boutique hotels after booking direct: because (1) I dislike the opposing business models or behaviours and (2) can afford to indulge my preferences. Yes, I am an old fogey and quite quite lost.

[keyplyr]

IMO Uber was managed poorly for years. Khosrowshahi has underlying issues to clean up from the past and many still ahead. Barcelona has banned the company from operating there.

Uber’s Problems Go Way Beyond Its CEO [bloomberg.com]

[lucy24]

88/second made me think immediately of highway speed in the US when I was growing up. 60mph = 1 mi/min = 88 ft/sec.

Seems appropriate enough for uber.

[tangor]

Interesting numbers (we all like to push math around to exercise the brain and remain a little smarter than the chimps), but was that loss due to egregious bad practice and exec salaries or merely the continuing re-evaluation of the biz by the stock market and vc expectations (which is another branch of math that shows we aren't all that much smarter than the chumps)? (sic)

[NickMNS]

Lets not get carried away... Somewhat to tangor's point, a loss can be achieved in many ways and is often desirable (accounting loss) as it is a way to avoid paying taxes. The question to ask is how much of the loss was cash and how much was the result of other non-cash expenses such as depreciation and amortization?

Let's do some more math, based on the Bloomberg article linked by keyplyr, Uber has 6.6 Billion in cash on hand. Now assuming that the loss is all cash, which when you read the Bloomberg article actually seems to be not far from the truth (as it appears they are selling service below cost). And assuming that they have no sources of new cash (They almost certainly get cash from operations, and could potentially secure new financing) then the company could survive for:

 6,600,000,000$ / (90$/sec * 60 sec * 60min * 24) = 848.765 days 

848 days = 2,3 years, in a worst case and barring any unforeseen needs for cash (eg: paying out to settle lawsuits).

While things are not great at Uber, they should still have enough time to turn thing around.

[engine]

I suspect that the new management will be getting to grips with this. The first few years they were on their own, but now there's competition snapping at their heels.
I'm sure they will turn it around, and as was said, they have two to three years at the worst case.

[iamlost]

They've been subsidizing rides by ~40% so the biggest problem I see is when st what rate they cut back subsidies aka raise rates to nominal profitability while not losing so many customers they never reach that goal. While I think they are sliding into oblivion I was wrong about Amazon two and one decade ago so I've got in a popcorn supply and intend to enjoy the show however it ends.