14 April 2017


The financial state of Uber, the tech oriented car sharing taxi substitute business, is pretty dismal:
Uber's gross bookings for 2016 hit $20 billion, more than doubling from the year prior, according to financial figures the company provided to Bloomberg. Its net revenue, after drivers took their cut, totaled $6.5 billion for the year.

But that rapid growth came at a cost. Uber says it lost $2.8 billion in 2016, excluding the China business it sold midway through the year. Uber's CEO had previously said it was losing $1 billion a year in China, prior to selling its China business to rival Didi Chuxing in August.
A loss of 43% relative to your gross after costs of services sold, is just horrendous. Uber is losing 14 cents for every $1 paid by Uber customers. High gross sales are great, but somebody in the Uber business seems to have forgotten that the basic idea is to make a profit, or at least, to break even. If you can't do that, and you can't even get close to doing that, then your business model is not sustainable. You need more sales to increase your profits, not increase your losses.

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