I can't get a clear reading from Uber's most recent financials filing in Feb to determine that they have negative marginal profit. It looks the opposite to me. Given their substantial gross profits, I have to think that they last ride they sell is profitable.
Re:Uber opens at $42 per share
by scarface74 on Friday May 10, 2019 @11:05PM
(#19884270)
What gross profits?
For FY2018, Uber reported $5.6 billion in gross profits and gross profit margins around 50%.
Re:Uber opens at $42 per share
by scarface74 on Saturday May 11, 2019 @08:37AM
(#19885844)
So they made money as long as you ignore stuff like operating expenses..
That’s the definition of gross profit. Within operating expenses, advertising is close to a cost of profits in a way that R&D isn’t.
It’s why we use multiple metrics to evaluate a business, but it’s clear that Uber has large positive gross margins.
Re:Uber opens at $42 per share
by scarface74 on Saturday May 11, 2019 @02:33PM
(#19887628)
When it comes down to it. The only thing that makes a company viable is whether they are making more money than they are spending.
Ignoring all other expenses and saying that a company is a good business is ignoring reality.
I’m not just choosing a method that makes Uber look bad. They are not profitable or successful based on a legal GAAP definition of profitable.
If we just cherry pick numbers, we might as well think that WeWork’s made up metric of “community adjusted EBITDA” is valid.
https://news.crunchbase.com/news/wework-details-run-rate-rev...
Selling a $20 bill for $18 is unsustainable. Selling a $20 bill for $40 and having $15 of advertising expenses and $15 of R&D expense might be sustainable. I think Uber is comically overvalued here, but still is a viable business which is profitable in its core operation.
Re:Uber opens at $42 per share
by sweeneyrod on Friday May 10, 2019 @03:59PM
(#19881677)
Marginal profit, rather. Negative marginal costs would be pretty sweet.
Edit: negative marginal costs -> negative marginal profits.