Thread by @doctorow

If you only follow one person on Uber, make it Hubert Horan, a transport analyst who's been writing about the sector for 40+ years and has written 23 articles analyzing Uber's financials and the impossibility of the firm ever attaining profitability.

nakedcapitalism.com/2020/08/hubert…

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Uber has never, ever been profitable, and it never has been. When the company IPOed and its investors dumped their stock on suckers, its prospectus - the S1 - revealed that the company's path to profitability:

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Replacing every public transportation journey in the world with an Uber ride.

axios.com/uber-ipo-mass-…

Short of that, the company is and always will be a money-loser.

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The only reason it exists is that the Saudi royals decreed that they would diversify their income, and gave Softbank an unlimited investment budget. Softbank backs companies that it thinks can monopolize a sector, allows them to lose money for years - decades!

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Softbank assigns its companies absurd, unsupportable valuations, in the hopes of scaring off competitors. If the monopoly rents never materialize, Softbank flogs the company to rubes who were wowed by those sky-high valuations. That's the Uber story.

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In the past four years, Uber has LOST $23.2 BILLION. In the first half of 2020, Uber lost $4B. In 2019, Uber lost $5.1B. That means it's losing money faster in 2020, despite no one riding in its money-losing unlicensed taxi-cabs (Uber subsidizes about 40% of every ride).

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Uber's got $7.8B on hand. At that rate, it will be broke by mid-2021.

Horan: "But if anyone still thought that Uber could somehow magically reverse its multi-billion dollar losses, the coronavirus should have put their fantasies totally to rest."

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"The coronavirus has crushed the major drivers of urban car services demand, including business travel and discretionary urban entertainment (clubs, restaurants, etc.). Their customers remain highly concerned about the health risks of all forms of public transportation."

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Lots of businesses were made unprofitable by the pandemic - Disneyland, MLB, United Air - but they were wildly profitable beforehand. Uber lost money before the lockdown. They lost more after. They are toast.

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Not even Uber Eats, a predatory company that is destroying restaurants that WERE profitable, and might be profitable again if they survive, is losing the company massive sums, the financial economy destroying the productive economy.

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Eats loses money faster than the car service! Its "adjusted EBITDA is 25 margin points worse than car services, even after the big coronavirus driven boost in food delivery demand."

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And even as we prepare to dance on Uber's grave, remember that Uber chickenized a vast cohort of precarious workers who will be sucked down with it.

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Incredibly, Uber CEO Dara Khosrowshahi is claiming the company will be profitable by the end of 2021. The press is repeating this claim despite the fact that he has no documented plan to make this happen and all his past profitability predictions were false.

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Image:
Tarcil (modified)
en.wikipedia.org/wiki/File:La_B…

CC BY-SA:
creativecommons.org/licenses/by-sa…

eof/