uber

Uber’s First “Profit”

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uber profit

One of the reasons I write Finance Gourmet is because of all the bizarre finance articles out there masquerading as news while actually serving as cheerleading, PR pieces for companies. It’s a little bit like those articles from White House press briefings that are basically stenographers taking the White House pronouncements as the full news while leaving out all sorts of necessary information just because the Press Secretary didn’t serve it up on a platter. Uber Projects Quarterly Profit The headlines out there in the financial press all say that Uber projects that it might have its first every quarterly profit next quarter. The facts? Well… It’s always refreshing when the non-finance guys aren’t willing to go along with the company dog and pony show. I don’t get to quote Gizmodo a lot here on a blog about financial independence, but the guys over at Gizmodo, where they write about technology, get full marks for their headline, “Uber Says It’s on Track to Maybe Make a Fake Profit.” Now THAT’S a legitimate headline. Even the subheadline spits some truth. Uber’s profit will be based upon adjusted EBITDA. If you’re into investing enough, you’ve heard of EBITDA. It’s a real financial …

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Why Uber and Lyft Are So Expensive Now

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uber lyft cost higher

I keep seeing articles explaining why Uber is so expensive and Lyft is so expensive when they used to be much cheaper. The answer is that as publicly traded companies, Uber and Lyft are no longer allowed to play the kind of funny-money games they did when first starting up where they covered part of the payment to drivers to make their service seem cheaper. Reality Catches Up to Uber and Lyft When Lyft and Uber were private companies swimming in piles of venture capital money, they paid drivers more than they could earn in order to attract enough drivers to their start up service. Once they were established, and knocked off the incumbent monopoly of taxi drivers, both Uber and Lyft tried to be real businesses by cutting the amount they were paying drivers in order to try and make rides profitable to the company. They never succeeded. Initially, Lyft drivers and Uber drivers didn’t have many alternatives, but the pandemic boosted the food delivery business enough that drivers found a way to make more money by delivering food. This cut the number of drivers willing to driver for Uber and Lyft as well as the number of hours …

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Uber Buys Drizly, Proves It Has No Real Value

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ubers-future

Uber Buys Drizly for $1.1 Billion Once upon a time, people believed that Uber had some form of value. Its app was revolutionary. Its concept of using ordinary people using their own cars to provide rides was revolutionary. But, it turns out that it wasn’t so much revolutionary, as just the first in an easily replicable line of use-your-own-car apps. Drizly Is Just GrubHub for Alcohol, Which Is Just Uber for Food Uber is paying Drizly $1.1 billion in a desperate grab for any shot at profitability and sustainability. Uber’s acquisition of Drizly proves that there is nothing special about Uber. A handful of engineers, a couple of months, and a few million of funding and anyone can copy Uber well enough. After that, the “special” comes from good old fashioned sales. Building Drizly was a lot less about building an app, and a lot more about signing up liquor stores, and then convincing people that it was worth shelling out $5 to stay on their couch instead of heading down to their favorite liquor store. This was a tough sale pre-Covid. Why pay $5 plus tip for a liquor delivery when you could just swing by your favorite liquor …

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Food Delivery Apps Face Backlash

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delivery apps stocks

It looks like food delivery apps, which had previously flown under the radar of scrutiny have overplayed their hands during the pandemic recession. Food Apps Charge Restaurants Huge Fees Restaurants are no strangers to the outrageous fees charged by delivery apps like Grubhub, UberEats, and Door Dash. Restaurant owners can be charged up to 30% of the price of the overall order. This is on top of the fee charged to the customer ordering food. All three apps actively post a laughable “delivery fee.” This amount is displayed predominately and is typically a low number, like $2.99. Then, this fee is often “waived” as part of some sort of promotion, giving the impression that the customer is getting free delivery. The real fee charged for delivery, however, is hidden by combining it in a line called “taxes and fees.” Obviously, the apps hope people don’t pay too much attention to this line. Pandemic Recession and Restaurant Survival Before the pandemic recession hit, customers and lawmakers all had pretty much the same thoughts. If you want to use the delivery services to reach customers, then you have to choose to pay their rates, whatever they are. If the charges were too …

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The Uber IPO

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The topic of Uber’s IPO came up at lunch today. This is a shock, because, as of today, there is no Uber IPO. In fact, it will probably be a long time before there is an Uber IPO, if ever. Why No Uber IPO Yet? Wondering why there is no Uber IPO, and why there is still no Uber IPO planned? The answer may surprise you. Uber actually loses money. A lot of money. In fact, Uber isn’t so much a business, as a cash incinerator desperately trying to make the transition to viable proof of concept. Uber does a pretty decent job keeping this fact out of the headlines, but the truth is that Uber loses money hand over fist. If it were to file for an IPO, it would have to break out and detail its finances, and it really doesn’t want people focusing on that right now. However, Uber did recently release some financial data, even though it isn’t required to do so. (Keep in mind that such numbers are unaudited, and not subject to any sort of SEC scrutiny). In that data, it reported gross revenue from bookings of $20 billion. That’s pretty impressive. However, after …

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