Listed below are various analysis of the competitive economics and financial performance of Uber. These are based on Horan's 40 years of experience in the management and regulation of transportation companies. Horan has no financial links with any urban car service industry competitors, investors or regulators, or any firms that work on behalf of industry participants.
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Transportation Law Journal article
Will the Growth of Uber Increase Economic Welfare?
Citation: 44 Transp. L.J., 33-105 (2017)
Available for download at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933177
The detailed (30,000 word) analysis of Uber’s historical development, financial performance and competitive economic, based on data available as of July 2017. Includes over 200 citations of contemporary media reports and industry analysis.
American Affairs Magazine article
Uber's Path of Destruction American Affairs, vol.3 no. 2, Summer 2019, pp.108-133
Provides a 9,000 word overview of Uber's development, economic issues and financial results through early 2019.
ProMarket series on the role of academics in Uber's propaganda program--Nov/Dec 2019
The first two of these three articles summarize Uber's hopeless economics and the PR/propaganda program that created the widespread impression that a company that had lost over $20 billion between 2015 and 2019 was actually a highly successful business that had produced huge economic welfare benefits for consumers and cities. The third article documents Uber's use of academics from prestigious institutions in this propaganda program and includes detailed critiques of four of the most important Uber-sponsored academic papers. All of the papers were designed to allow Uber to claim that key PR claims were backed by rigorous, independent academic research. However none of the papers actually analyzed their nominal subjects (compartaive taxi operating productivity, the labor market for taxi drivers, changes in consumer welfare since Uber's entry, or factors affecting overall driver welfare) and all of the papers deliberately ignored the massive, unsustainable subsidies that completely invalidates all their central claims.
The “Uber Files” are not the Uber exposé you are looking for--The Blind Spot 17 July 2022
This critique of The Guardian’s extensive series based on leaked Uber files from 2013-2017 was co-authored by Izabella Kaminska. I was interviewed for and quoted in Part three of The Guardian’s series.
The “Uber Files” was the first attempt by any mainstream media outlet to provide a “big picture” overview of Uber, and its depictions of lawbreaking and hyper-aggressive lobbying are completely accurate. But the series inexplicably ignores the biggest piece of the Uber story--its abysmal financial losses and uncompetitive economics. As a result The Guardian’s readers had no way to understand that the bad behaviour described was not due to a few rogue actors that have long since left the company but was part of a well-orchestrated strategy that directly supported its investors objectives. Uber’s lobbying and PR programs were always designed to prevent the public from understanding that Uber never had any potential to produce large-scale taxi service at prices the market would pay, and no potential to earn sustainable profits. While Uber claims that its behavioral problems were completely solved by 2018 management changes, those changes had no impact on the fundamental hopelessness of Uber’s business model, or its use of deceitful lobbying/PR to hide its financial weakness.
Presentation to Grant's Fall Conference, New York 23 October 2019
Uber's Disruptive War on Economic Welfare
Presentation to the Lexington Transportation Group, Chicago 31 October 2018
An Airline/Railroad Economist Looks At Uber
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Can Uber Ever Deliver? Parts 1-5—Nov-Dec 2016
Parts 1-4 include the original versions of arguments (subsequently published in the TLJ article) about Uber’s dismal financial results, uncompetitive economics, and its explicit pursuit of unregulated industry dominance based on data available in 2016; Part 5 answers questions raised by readers of Parts 1-4
Can Uber Ever Deliver? Parts 6-10—Jan-Jun 2017
Part 6 updated the evidence from part 1 on Uber’s dismal financial results.
Part 7 outlined Uber’s PR “narrative” and part 9 documented how this “narratives” had been taken directly from propaganda narratives developed in the 1990s by well-funded groups seeking the complete elimination of all forms of governmental oversight over the taxi industry.
Other material here (which is not included in the TLJ article) addressed the major flaws in well-publicized pro-Uber pieces, including (in part 8) a major book on Uber by Bloomberg’s senior tech industry reporter and totally ignored all available evidence about Uber’s economics, totally whitewashed the cultural and ethical issues that had engulfed Uber in controversy, and argued the book should be seen as PR advocacy, and not as journalism.
Part 10 describes major Uber events in the first half of 2017, including an internal investigation of systematic sexual harassment at Uber and the forced resignation of CEO Travis Kalanick.
Can Uber Ever Deliver? Parts 11-15—Dec 2017-Jun 2018
Parts 11, 13, and 15 update the documentation of Uber’s staggering losses based on newly published data through (respectively) 3Q2017, 4Q2017 and 1Q2018. Parts 12 and 14 examine major pro-Uber pieces in mainstream publications (Bloomberg and the New Yorker) and show how they systematically ignore financial/economic data while emphasizing unsubstantiated Uber PR narrative claims. Part 16 demonstrates why the first published forecast of future Uber profitability and potential IPO valuation (by Morningstar) was totally indefensible and worthless.
Can Uber Ever Deliver? Parts 16-21--Aug 2018-Sept 2019
These Naked Capitalism articles document Uber's 2018 financial results and events leading up to the 2019 Lyft and Uber IPOs. Part 16 demonstrates why the first published forecast of future Uber profitability and potential IPO valuation (by Morningstar) was totally indefensible and worthless. Part 18 examined Lyft's IPO prospectus (which included the first public release of historical financial results) and its failure to explain how the ridesharing business could ever become profitable. Part 19 examined Uber's IPO propsectus and documented how Uber had massively inflated claimed P&L improvements by categorizing the alleged value of untradable financial paper related to failed and discontinued operations as current profits from ongoing operations. Part 20 discussed the results of the two "train-wreck" IPOs and how the actual results failed to change the media narrative describing both as highly valuable companies. Part 21 critiques the Uber book published by New York Times reporter Mike Issac which totally ignores Uber's uncompetitive economics and terrible financial performance, and attributes Uber's various problems to the idiosyncratic personalities of its executives and Board members.
Can Uber Ever Deliver? Parts 22-24--Feb-Aug 2020
Part 22 of the Naked Capitalism series documents Uber's full year 2019 financial results. Uber's published 2019 GAAP loss was $8.5 billion, with a profit margin of negative 60%. The article notes accounting misstatements discussed previously in the series, where the alleged future value of untradeable financial notes was improperly classified as profits from ongoing operations, and where the costs of stock-based compensation for work performed over multiple years were assigned to a single quarter. Adjusting for these accounting issues produced a 2019 loss of $5.9 billion and a negative 42% margin. The article also documented the continuing slow down of growth in Uber's core business, and explained why Uber's promise of "profitability" by the end of 2020 was highly dubious. Part 23 documents Uber's first half 2020 results, including the coronavirus impacts that first hit during the second quarter. Second quarter rides revenue declined 74% versus the fourth quarter of 2019. Uber burned $4.0 billion in cash in the first half versus a fully year 2019 cash burn of $5.1 billion. Part 25 details full year 2020 results, where a GAAP loss of $6.8 billion brought five-year losses to $25 billion
Can Uber Ever Deliver? Parts 25-29 Aug 2021-Feb 2022
Part 25 examined Didi’s June IPO prospectus, and the post-IPO collapse of its equity value. It demonstrated that the Didi and Uber business models were virtually identical, indicating that even if Uber had Didi’s level (90+%) of home market dominance it would still be massively unprofitable. It suggested that while Beijing’s major crackdown on tech companies had purely political components, most of its actions attempted to restore the government’s ability to address problems (open pursuit of anti-competitive market dominance, use of market power to evade local laws and to exploit drivers and suppliers, improper use of customer data, etc) where the unchecked power of US based tech companies had given them effective immunity from any form of oversight.
Part 26 summarized Uber and Lyft’s first half 2021 financial results. When adjusted to eliminate the claimed appreciation of non-marketable securities related to markets they had abandoned, their GAAP net margins were negative 38% (Uber) and negative 49% (Lyft). Part 26 also demonstrated how the public announcements of both companies emphasized a fake (“Adjusted EBITDA”) profitability measure in order to mislead investors and the media about their actual profit performance.
Part 27 discussed two June publications that exemplified two of Uber’s primary PR propaganda techniques. In the first, a 4000-word New York Time article uncritically repeated a wide range of Uber claims without ever mentioning its massive losses, or ever explaining how it might someday become profitable. In the second, two academics from University of California published a paper at the National Bureau of Economic Research that used an indefensible (and non-replicable) regression analysis to claim that Uber’s market entry had reduced US traffic fatalities by over 6%. The sole purpose was to provide Uber supporters (in particular the Wall Street Journal) the ability to falsely suggest that the alleged huge Uber benefits had been validated by independent, highly rigorous academic research.
Part 28 discussed Uber's 3Q 2021 results. While Uber's press releases attributed reduced losses to pandemic recovery driven demand growth, its reported numbers showed that gains were entirely due to its ability to retain a higher share of gross customer payments, while reducing payments to drivers and restaurants.
Part 29 reported how Uber FY 2921 results brought its cumulative losses from ongoing operations to $31 billion.It also presented City of Chicago data that documented the magnitude of the car service capacity growth driven by ridesharing (375% between 2014-19) and how they totally abandoned their "flood capacity at extremely low prices" strategy was completely abandoned after the pandemic hit
Can Uber Ever Deliver? Parts 30-33 (Jul 2022-Aug 2023)
Part 30, co-authored with Izabella Kaminska, reviewed “The Uber Files” a major critique published by the Guardian. It claimed its headline finding: “Uber broke laws, duped police and secretly lobbied governments, leak reveals” was new information based on whistleblower revelations. In fact, while all of the charges of bad behavior were factually accurate, all had been widely reported when they originally occurred. More importantly the article failed to explain that this was not aberrant behavior by a handful of bad actors but was part of Uber’s well-organized efforts to conceal and distract attention from its terrible economics and financial performance. Parts 31-33 summarize Uber’s financial results for the first and second half of 2022 and the first half of 2023. Part 31 discusses how a major improvement in Uber margins was entirely due to keeping a larger share of customer payments and cutting the share drivers received. Part 32 notes that Uber had remained immune from the major equity collapse of “tech” startups that had failed to produce sustainable profits. Part 33 discusses how that recent margin improvements were unlikely to continue since most of the sources of these gains had been exhausted.
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Has Pando missed the heart of the Uber problem? A transportation industry expert writes...---December 1, 2015
Uber an avatar of innovation and progress? The economic evidence says otherwise--March 10,2017.
Interview on ABC Television (Australia) Four Corners program
The Uber Story
Video and transcript of Four Corners broadcast of 18 March 2019
Interview on Harry Shearer's Le Show