Uber, losing billions, freezes engineering hires
The sentiment on UBER recently is that they are only surviving by subsidizing rides and are out of control / there's no future business there.But that is not an accurate portrayal, here's what's going on when you look at their un-editorialized results (1):- Headlines have portrayed UBER as losing $5b this quarter. This is the easy one to address as this article touches on - UBER paid out almost $4b in stock based compensation (one time, due to IPO) that inflated their loss number. The more accurate portrayal is that UBER burned ~$1.2b this quarter on operations.- Of their remaining $1.2b operating loss almost 50% of that is from UBER eats subsidies. They paid $544m more to drivers to deliver food than they took in. Why? (a) It is their fastest growing (by %) division (2) It's arguably the most valuable battleground in logistics - developing a "last mile" delivery network at scale.- Their core business - ridesharing - has improved their gross margin and unit economics quarter-over-quarter to the point that the discounting is almost non-material (less than $22m total worldwide this quarter, representing less than 1/2 a percent of total ride sharing revenue).- They have >25,000 employees and >50% of those are international in new markets that require heavy HR spending. Their move to clip 400 marketing employees (25% of entire division) last month implies the CEO has confidence that there is a lot of fat in employee base.- Add to that other losses in their "other bets" which is almost certainly their freight brokering network at -$50m, and the losses appear to be diminishing.(1) https://investor.uber.com/news-events/news/press-release-det...