> The efficiency of driving a cab around and picking up at random

This isn't how taxi cabs typically operate, except maybe in very dense neighborhoods. It's common in low to medium density areas to see cabbies waiting (often in the same parking lot) for a call from their dispatcher rather than driving around at random waiting for a hail. And in dense neighborhoods with enough riders, such as Manhattan, taxi cab occupancy comfortably exceeds 50%, at least at peak hours.

From the 2014 NYC Taxicab Fact book (which actually seems to cover the whole city, not just Manhattan) [1]:

Aside from these spikes, other areas of high occupancy occur mostly at peak travel times. For weekday AM rush hours (between 8AM and 9AM), the average occupancy is around 56%. For the PM rush hours following the shift change (between 6PM and 7PM), the average occupancy is around 62%. On Friday and Saturday nights, peaks occur around midnight and again at 4AM, when bars close in NYC. At midnight on weekends, 56% of available taxis are occupied, on average, and at 4AM, about 49% of available taxis are occupied.

[1]: http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_...

Large cab companies have been using gps-enabled electronic dispatching systems since 2004.

I found a video on my old phone that I'd filmed to show how the system works:

http://www.taxiwars.org/p/electronic-taxi-dispatch-v1.html

Usually I'd make it to the address in about 7 minutes. Sometimes I was parked at the pickup address already (convenience store). I think there are two diaries titled 'instant taxi' on my site...

If you narrowly define a scope and cherry pick statistics, you can make anything look profitable.

Uber is only profitable if you only look at SF, and ignore taxes paid, interest expenses, and equity issued. So no, by that definition I don't consider Uber to be profitable for a company that lost $1.2B in the same timeframe.

SF is also arguably one of the best public transportation markets, so I'm not sure how much Uber contributed to mobility there either.

It would be interesting to see the numbers, but those million dollar medallions in New York make me think there's some inefficiency that could be reduced.

The whole surge pricing thing was pretty innovative. A regular cab driver shoots to meet their daily quota. If it's raining, they hit that much sooner, and call it a day. There really are fewer cabs when the weather sucks. Or, more accurately, there are many more riders than drivers available.

> The whole surge pricing thing was pretty innovative.

The innovation is in having a flexible workforce. Surge pricing is mostly price gouging. Having plenty of passengers wanting to go places is incentive enough to get extra drivers on the road.

There are lots of people wanting rides on New Year's Eve, their aren't remotely enough drivers to take them and without surge pricing there would be even fewer. Supply/demand isn't unethical, it's reality.

It is, but most cases of "price gouging" are the same. Uber's great innovation (if that's the word) was a willingness to actually vary their prices in this way.

The not-a-taxi company's price structure is perverse. During non-surge times, the fare received barely covers the driver's costs. When the mileage to get to the pickup address is included in the calculation, all those drivers are basically working for free.

I've met a few 'ride share' drivers who only go out during the times they can expect to get a surge fare. One of them had graduated from an engineering program, and lived in Pittsburgh...

> I've met a few 'ride share' drivers who only go out during the times they can expect to get a surge fare.

That sounds like it's working as intended, no? More people driving when there's more demand, less when there's less.

The million dollar medallions that are now available on the market for $350K?

Ah, clearly a bargain.

I was only trying to say they're moving in a better direction.

Oh I agree, but in context to the added value of mobility, I think surge pricing during commute hours isn't going to help much.

Did you read the article? Do you not believe it? It says across the entire US. They're spending money because they're expanding abroad, and the lag between opening offices / hiring people and getting rideshare is real. That's where the $1.2B loss comes from.

EBITA is a reasonable way to calculate profitability, which ignores taxes and interest. Equity-based compensation is a possible concern. Do you think that they're giving away so much of they're company to employees that they can't sustain that after they start paying pure-cashing (or cash + public equity) comp? (I'd honestly be surprised, but curious to know what you think.)

In his letters to shareholders, Warren Buffett repeatedly declared EBITDA&co. unsound, and for good reasons. They still apply.

So, what did he say about EBITDA?

While I haven't extensively researched, what I did find was this:

""" Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).

It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.

People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.

This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.

We at Berkshire are going to spend more this year on cap ex than we depreciate. """

So tell me - what giant depreciation expense does uber have that is going to jive with this assessment?

Disclaimer: not really an uber fan.

Your time would be spent more productively by doing the actual research instead of writing disclaimers in vain and expecting others to educate you. If Uber really is in profit by Berkshire-sound accounting standards, they could say so.

Uber cars are cabs.