No, Uber’s (still) not profitable
A relentless, world-leading innovator in ever-sweatier balance sheet tricks, accounting gimmicks and hopium.
Going to Defcon this weekend? I’m giving a keynote, “An Audacious Plan to Halt the Internet’s Enshittification and Throw it Into Reverse,” on Saturday at 12:30pm, followed by a book signing at the No Starch Press booth at 2:30pm!
1. “the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it” (JK Gabraith)
Uber was, is, and always will be a bezzle. There are just intrinsic limitations to the profits available to operating a taxi fleet, even if you can misclassify your employees as contractors and steal their wages, even as you force them to bear the cost of buying and maintaining your taxis.
The magic of early Uber — when taxi rides were incredibly cheap, and there were always cars available, and drivers made generous livings behind the wheel — wasn’t magic at all. It was just predatory pricing.
\Uber lost $0.41 on every dollar they brought in, lighting $33b of its investors’ cash on fire. Most of that money came from the Saudi royals, funneled through Softbank, who brought you such bezzles as WeWork — a boring real-estate company masquerading as a high-growth tech company, just as Uber was a boring taxi company masquerading as a tech company.
Predatory pricing used to be illegal, but Chicago School economists convinced judges to stop enforcing the law on the grounds that predatory pricing was impossible because no rational actor would choose to lose money. They (willfully) ignored the obvious possibility that a VC fund could invest in a money-losing business and use predatory pricing to convince retail investors that a pile of shit of sufficient size must have a pony under it somewhere.
This venture predation let investors — like Prince Bone Saw — cash out to suckers, leaving behind a money-losing business that had to invent ever-sweatier accounting tricks and implausible narratives to keep the suckers on the line…