Don't forget also, it's believed that "being profitable" = "you're done with hypergrowth", at which point the whole band of capital looking for 100x unicorns moves on.

Remaining unprofitable is a part of maintaining the illusion that the company has huge upside in the future.

Yes, I suppose this is also correct. I just wanted to reiterate that with modern creative financing, a large company can stay “unprofitable” basically forever and still keep shareholders happy.

The is only true as long as shareholders believe that the company gets a return on its investments.

If they believe it just destroys the money it keeps, they will start demanding a payout.

Uber isn't rolling profit back into the company like Amazon or others do, they are literally loosing money on every ride. There's no profit to hide from the taxman.

Right. Amazon is and has been accumulating a massive vertically-integrated empire of physical infrastructure they actually own or lease.

Uber is accumulating… uh. Microservices? Negative goodwill?

Markets, it's acquiring markets. I'm no Uber fan, but come on, they're moving into more and more cities world-wide, often without competition save the local taxi firms.

It's achieving temporary local marketshare subsidised by massive losses. The moment Uber charges prices it can actually profit from, its “markets” will vanish.

Except it's not acquiring them so much as renting them, paying each month for the privilege to hold on to the marketshare necessary to also lose money in the next month.

Amazon buys a warehouse and then shortly after turns a profit on it which they use to buy another warehouse. Uber buys users and then shortly after borrows more money to buy other users.

> Uber isn't rolling profit back into the company like Amazon

They kind of are. It’s just a matter of timing. They are rolling future profits, bankrolled by VC.

And betting those profits come in the process. Huge difference.

Same reason I requested $0 salary this year...

Seriously, this argument doesn't make sense to me? How can them spending more money help them make more because of taxes?

Yeah, it's a pretty stupid argument that has somehow become one of those contrarian memes people like to use to appear smart.

I guess it's inspired by Amazon's history of reinvesting, but missing the point that Amazon's motive most certainly was to actually invest into growth.

There are of course many companies that engage in all sorts of morally bankrupt but legal tax optimisation strategies. But Uber is rather different from, say, Apple, in that Uber has absolutely no need for creativity to depress their profit. They are haemorrhaging money the old-fashioned and totally legit way.

It would be better for you to collect stock on a company like google at 0$ salary, and just pay long term capital gains when you sell than salary.

Makes a huge difference long term, as one is filled with payroll taxes and high rates, and the other is 15%.

That doesn't make sense. The stock grant will still be considered normal income to you and taxed as the salary is taxed. Any difference in the stock price after it vests and you sell will be either short term or long term capital gain.

So if you consider getting all salary in cash and then buying GOOG (or any other stock) with it, you come off only a month or two late on the period for which you are holding the stock. And for that, you lose out on the diversity of the stock.

This also assumes that your GOOG stock starts vesting immediately and there is no cliff. Otherwise, you will be holding the stock for "cliff" period longer if you just get cash salary and buy the stock.

Disc: Googler but this comment doesn't have anything specifically to do with Google. Google is just an example here.

Of course, you want all your stock gains to fall under long term capital gain. Google already has the market price in, but all startups don't.

If you make 200k a year for 10 years, vs get no salary for a startup for 10 years and then its sold out for 2 million dollars, they are completely different tax conditions.

Im not an expert or have been through this, but if you sell 2 million dollars at 15% long term rate vs the 35~% + medicare of salary, the difference will be huge.

If you owned enough assets that could be used as a collateral, yes, you could request $1 salary. Many CEOs, Steve Jobs in particular, used to do that. He already had enough cash for day-to-day expenses (like buying a new Mercedes every 6 months); more significant expenses were financed... differently.

You should be already rich and structure your capital properly for this to work.

I get that, as odd as it is. But my understanding was that Uber wasn't doing that at all. I haven't heard of them using slightly dubious accounting tricks to pay more money to shareholders while showing no paper profit. I thought their expenses were simply way ahead of their revenues with no clear way to bridge the gap, and the shareholders are losing money and being diluted too.

It’s not about taxes. If you don’t have a way to reinvest your cash that means you’re out of ideas and are unable to grow.