Originally Posted by
JoeyBike
"They"?
The CEO of Uber is worth 6 BILLION dollars. He made that money and put it into his bank account. "They" I presume is "The Company". I worked for a company that purposely "lost" money for 12 years. I was the CEO and I actually worked at the company and made decent money. The owner (President) of the company never had to step foot in the place and always claimed that he would NEVER own a company that he had to work at. Obviously, he had a ton of money that I (and others) made for him. I actually made enough money to take 6 months off every year as we had two "CEOs" and we took turns running the place. Basically, I made a years salary in six months. But still, for 12 years "They" lost money.
Do you understand?
You don't seem to understand anything about this topic. Your previous employment and salary "experience" doesn't mean doo-doo when discussing the viability or profiability of Uber and similar so-called smartphone enabled "ride share" mobility enterprises, or the personal wealth of its recently hired CEO. The CEO of Uber, Dara Khosrowshahi, was hired by Uber in August 2017. His salary is a handsome $6 million. Whatever other wealth he may have did not come from Uber, but rather his wealthy family connections and previous (to Uber employment) business/investment deals.
Uber loses big money not because it is being looted by management but because their revenue falls far short of their operating expenses and it is not likely to ever become a profitable enterprise due to its unprofitable business model.
https://www.forbes.com/sites/lensher.../#1c79a09210ec
Extracts:
"Uber’s elephant in the room is that its business model is fundamentally broken. To understand why, it is useful to assess Uber’s business model in the context of the history of the taxi industry."
"There’s a lot to like in this story, except for one thing. The taxi industry that Uber is seeking to disrupt was never profitable when allowed to expand in unregulated markets, reflecting the industry’s low barriers to entry, high variable costs, low economies of scale and intense price competition -- and Uber’s current business model doesn’t fundamentally change these structural industry characteristics. It is indeed ironic that Uber’s fierce determination to avoid regulatory oversight condemns the company to unprofitable operations that the taxi industry experienced during its pre-regulatory era."
More:
https://news.crunchbase.com/news/und...r-loses-money/
Extracts:
But while Uber is famous for huge growth, towering revenues, and enormous fundraising, something that most don’t know is that Uber loses money. A lot of it.
So much, in fact, that its IPO timing is a question mark, its eventual valuation a mystery, and there have been nagging concerns throughout Uber’s recent life as to whether it can ever make money. Or if it can while supporting its more exotic operations (Uber Eats loses money, self-driving cars aren’t cheap, and what’s this about helicopters?).
In English, the money that Uber collects from fares isn’t enough to pay for its revenue and operating costs; therefore, Uber loses money each quarter.
How much money the company loses depends on how you count costs and if you take into account non-cash costs (such as stock compensation). But, by every possible “real” profit metric, Uber is deeply unprofitable.
And that’s simply due to it having a higher cost base than it does revenue generating capacity. Now you know!