How complicated needs to be an IT infrastructure that lets you book a taxi via an app and pay the driver? Is it really something to throw billions at each year? Sometimes I feel these companies are throwing billions in IT simply because they're expected to be disruptive technology companies, and not for real technical reasons.
They use this data to update their surge pricing by the minute for all these different geofences all over the world... yeah, I think having the self image of a technology company that wanted to attract the best talent definitely created a lot of expensive problems for itself.
Ride sharing is extremely local, so it's not like you need any cleverly scalable tech. Most places will be tracking a few hundred cars at any given moment. Only in very large cities like NYC would you need to spend a little more on big servers.
What Uber presumably does is collect and analyze a lot of real-time data, which isn't strictly necessary to provide the service they're providing.
Essentially they seem to be repeating whatever Google and Facebook are doing: but those are pure technology companies that serve two orders of magnitude more customers and have contributed building the web as we know it. Uber is a taxi company.
Also because when Uber was young, it was not motivated to seek profits or consider expenses, it was just growth at any cost. Once that work culture is established, it can be hard to shake.
You can read here on HN how their large IT staff spends most of its time migrating back and forth between MySQL and Postgres.
Cost of revenue $1.68bn
Operations and support $434mn
Sales and marketing $1.04bn
Research and development $409mn
General and administrative $423mnFrankly, the R&D spend is the least of their worries. They recently trimmed some fat from their marketing department[1] but the subsidized rides problem continues to be the biggest issue they face financially.
[1]: https://www.nytimes.com/2019/07/29/technology/uber-job-cuts....
Try hailing a cab in Thailand, Indonesia or Malaysia. They will ask your destination and quote you 5-10x meter fare. Use a ride hailing app and you get approximately the meter fare.
Uber is not a tech company. It’s a taxi-company with a fancy app.
There’s literally no reason their operating expenses should be this big.
I mean, is there a chance these three companies develope autonomous vehicles and decide NOT to compete in ride sharing?
Also Uber as a company has zero experience of owning and maintaining a fleet of vehicles. They’ve entirely sidestepped that problem. What evidence is there they can do it better than anyone who does do it, like say Hertz?
The vehicles get told to go from point A to point B and does safely and effectively. Uber still plays the role of interacting with the customers, "booking" a car for them, collecting payments, etc.
Autonomous vehicles will never work in the chaos of Delhi or Jakarta's traffic
I sincerely hope they weren't expecting any revenue from those for the next decade or two. Anything else would be delusional.
I personally agree it's a multi-decade (if ever) thing, but if Uber et al. claim they'll have it in 2 years, without facts on the table it boils down to who the investors believe in.
Not spending billions a year on R&D certainly makes the financials look nicer. It might not attract as nice of a multiple, but it's not the ride prices that are out of whack at Uber IMO.