Second-wave dotcom Uber-investor Softbank forecasts gargantuan losses as world economy faces slump One of Softbank's slogans is that it "invests in human progress." If its latest forecasts are anything to go by, the returns are disappointing, to say the least. Its legendary $100bn Vision Fund, which has been behind major investments in Uber, WeWork and British chip designer Arm Holdings, says it expects to lose JPY 1.8 …
such as Uber and WeWork – have yet to demonstrate that their business models, innovative and paradigm-shifting though they may be
Except they aren't. Uber is a taxi company that pretends it doesn't employ people and WeWork is an office space company. As has been noted elsewhere: a lot of companies doing fairly standard stuff promoted themselves as "technology" companies to get the VCs (and then hopefully the pension funds) to open their wallets. Didn't WeWork have one of daftest self-defined metrics trying to conceal the age old problem that it had long term leases and its customers short term rental contracts?
Uber is a sharecropper company.
Oh wait - sharecroppers had a better deal, as in traditional sharecropping the landlord shared in the profit-loss risk of the sharecropper. With Uber, the "landlord" takes on no risk, just skims cream off the revenue stream regardless of profit or loss of the "sharecropper". With Uber, the "sharecropper" has 100% of the capital & operational risk.
The rich get richer! Yea for the sharecropper economy!
Don’t forget the Cash Burn on Eats.
That will be far higher than Self-driving in the global war against Just Eat and other other takeaway delivery companies- all burning money at an insane rate.
CV19 will be the final nail in the coffin of WeWork - who needs an expensive **shared** with other people office - just get a Ring Central/Zoom/WebEx account and stay at home now.
I know plenty of people who hate taxis, but love Uber.
Sure, taxi companies could have adopted new technology and beaten Uber to the punch, but they didn't. Being able to see in real-time how far-off an available taxi is, up-front pricing of the trip, etc., was enough of an innovation that we're talking about Uber and Lyft...
Just as GPS device makers weren't the ones that brought GPS to ubiquitousness with cheap smart phone apps, the taxi companies were caught napping as well. No doubt there were ice delivery drivers complaining that mechanical refrigeration is nothing new or innovative, newspaper publishers deriding radio news broadcasts as nothing special... etc.
Uber's business model, at least in my area, is "the taxi companies suck REALLY bad"
Uber has to simply treat people like customers instead of people privileged that the taxi company decided to service them.
I've yet to have an Uber driver read while they were driving, complain about the "n----gers/spics/kikes", or continuously sing Trump's praises and expect you to join in.
I know plenty of people who hate taxis, but love Uber.
Are these 'people' consumers of the Uber service, i.e. the people who 'catch' Uber transport, or the drivers themselves?
Because plenty of people love cheap clothes enabled by the sweatshop clothing manufacturers, but not many of those staff who work in them like them.
For the consumer Uber is great, but like with a sweatshop, it achieves that consumer-greatness by screwing over its 'workers', the Uber drivers.
Uber's underpaid employees are a symptom of weak government regulations, while their success has brought the issue to public attention and caused wide-spread changes for the better in some locations.
Besides, if you choose not to do business with every company whose employees don't like working for, you'll quickly find yourself out of options. I suppose everything is relative... Uber is bad until a company comes along that treats employees worse. Walmart vs Amazon, who is exploiting their employees the worst?
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One of the reasons I use a London Black Cab is because the drivers know where they're going. I can usually get a discount on the meter fare and they're happy to take directions.
A friend ordered an Uber from a drinks evening we'd been at in South Kensington despite there being a plethora of Licensed London Black Cabs. Up pulled a car a few minutes later we both got in and noticed that this wasn't going to be the most luxurious ride we'd ever had. The car made a Black cab look like a Rolls Royce. It may have been under 4 years old but if it was it was used 24/7 as it needed work inside and out. Then we headed off and the driver was totally relying on sat nav for his directions which always worries me. My friend says she needs to give instructions on getting to her place as it's surrounded by a relatively new one way system and difficult to reach.
The driver didn't speak amazing English but just pointed at the sat nav when she asked him to turn left or right. After he missed the crucial turning for the second time she said "Just drop us here please" and we got out. She also said there are far quicker routes of getting to her place than the route he took and he clearly either didn't know them, or his sat nav didn't.
I won't use Uber because I don't like the fact that they wanted to track the movement of every user even if they weren't using the app. Greyball (https://en.wikipedia.org/wiki/Greyball) etc. Also anyone who can pass The Knowledge is better than me at remembering stuff and has earned some respect for that.
"I know plenty of people who hate taxis, but love Uber."
Because it is cheaper, and for no other reason. Given that Uber loses billions a year they can't keep the current prices in place forever, and part of the reason they are cheaper than taxis is that they are avoiding paying drivers as employees - if that dodge goes away their costs increase.
Self driving cars would eliminate a lot of that cost but unless they are the only ones to get self driving cars working they have no competitive advantage beyond "people already have our app installed" which is not a lot of friction to hang a $50 billion valuation on.
WeWork's problem wasn't that it had long term leases and short-term customers.
Plenty of businesses do very, very well with that model.
Part of their problem was that the founder was self-dealing, having WeWork signing lucrative long-term leases on buildings that he owned. Another part of the problem was spending wildly on making WeWork a lifestyle/workstyle brand, when that wasn't where the market is. People were happy for the extras when they were subsidized by VC money, but most individual workspace users are trying to establish a business and aren't willing to pay too much extra for a luxuries.
...ask yourself, how many of these are also buying shares at rock bottom prices and will be raking it in by the end of the year?
Got a few million / billion to spare? Buy some oil / shares. Sit on it 6 months and get 50% return on investment.
Just don't invest in bog roll. Some people have about 5 years worth.
Softbank takes money from the Saudis (among others) and gives it to people like the Uber and WeWork fools who then use it to pay their staff, who use it to feed their families.
That sounds pretty good to me. Hopefully it takes another couple of years and another few billion before the tap gets turned off.
If the Saudis sent all of their money, that would be great.
You mean people like Bill Ackman who have a vested interest in seeing prices fall (because they have options) and go and national television prophesying the end of the world? Yes, these people are so hard done by.
As for Softbank: Son isn't going to be personally affected, just the CEO of and some investors in WeWork who've just lost an exit strategy. But the biggest losers will be the employees…
"...the worst recession since the 1930s will hit the global economy, which could shrink by 3 per cent during 2020..."
The OBR's -35% scenario for the UK economy looks much more likely to be typical of the impact worldwide. Bear in mind the UK is able to borrow at a scale unavailable to many other European countries, let alone the RotW, which theoretically enables otherwise bust UK firms to keep the lights on until the bright new dawn of tomorrow when they can call back all their furloughed staff and call all their old customers to let them know the firm's back in business.)
The Return Of The World As We Knew It is now scheduled for early 2022, according to the vaccine-monger on PM this evening. Actually -- she spoke enthusiastically of being able to produce "hundreds of millions of doses" by "the end of next year", but (with everyone needing at least two shots, and it being by definition a worldwide problem and all) that's an order of magnitude less than will be needed. Let's be generous and assume they can churn out 10x the doses three months later, so "normality" returns around Q2-22.
I’m not very optimistic for the UK economy. The UK economy was stagnating in Q4 and we can safely say that we entered a recession in February. And that was before the coronavirus outbreak started to impact us here.
The UK was economically already poorly placed for the outbreak and is now on course to be one of the worst hit countries in Europe from a public health perspective too, with a lockdown lasting much longer than many other European countries. The first countries in Europe have already started lifting their lockdowns, many of which were less drastic than ours anyway. A Dutch friend of mine told me the DIY and furniture stores were rammed over the long Easter weekend.
It should be no surprise that the economic hit to many other European countries is considered to be bad but not as bad as the UK. I expect some to not even hit double figures when it comes to economic contraction and a sharp recovery.
" and is now on course to be one of the worst hit countries in Europe from a public health perspective too, "
Worse than Spain, Italy and Greece? I doubt it somehow. They are already asking for billions in handouts from the ECB, that's on top of their huge existing debt. If the airline and travel agencies fold and it goes on for a month or two more, that is their tourist industry killed off, a large percentage of their GDP.
As you can see, that was a specific reference to the public health impact, not the economic one.
Unless something drastic suddenly happens in another European country the UK will remain in the top five of worst hit European countries when it comes to deaths per million. Greece doesn’t even make it into the top 20 of worst hit.
What the economic impact of the health crisis will be is a different matter. A country like Spain will probably have an easier time to bounce back than a country like Romania, despite Spain suffering a bigger health impact.
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