And rideshare revenue is stagnating.
Uber’s losses have been legendary for years, ever since they were being leaked to the public while it was still a privately held company. But this takes the cake. Uber reported this evening that it had lost $5.24 billion in the quarter through June 30. The thing is, Uber reported revenues of only $3.2 billion. In other words, its net loss exceeded revenue by $2 billion. That takes some doing.
Its $5.24 billion loss came on top of its $878 million loss in the first quarter. Combined, during the first half of 2019, Uber lost $6.25 billion. Total revenue for the two quarters was $6.3 billion. The chart of Uber’s “Loss from operations” – which does not include interest expense ($368 million in the first half) and “other income (expense),” such as last year’s gain from the sale of its stakes in Grab and Yandex – shows the annual totals from 2014 through 2018 and first-half total for 2019:
Lyft, Uber’s biggest competitor in the US, reported yesterday that its Q2 revenues of $867 million had generated a loss of $644 million. And that over the first half, its revenues of $1.64 billion generated a loss of $1.78 billion.
You see, this phenomenon of well-established global companies with thousands of employees generating as much or more in losses than they have in revenues causes my old-school thinking to short-circuit.
Uber has been around for a decade, and it has already burned through many billions of dollars in investor money to get where it is today, and there is still no functioning business model in sight.
So how did Uber lose $5.2 billion on $3.2 billion in revenues?
Naturally, the company does not want you to look at its business this way. So, its report clearly points out what to look at and how to look at it, and what to purposefully ignore. It says so right at the top of its press release:
“Our platform strategy continues to deliver strong results, with Trips up 35% and Gross Bookings [not including what drivers get paid] up 37% in constant currency, compared to the second quarter of last year,”
OK, despite all this hoopla and red-hot growth of these metrics, actual revenues increased only 14%.
“In July, the Uber platform reached over 100 million Monthly Active Platform Consumers for the first time, as we become a more and more integral part of everyday life in cities around the world.”
Sure, but who pays for it? The check is split two ways: Users pay part of it and investors pay the other part, digging deeply into their pockets to subsidize every ride.
And another thing: 14% topline growth is not a high-growth company. And that 14% was way down from prior growth rates. For example, in Q2 2018, revenues increased by 52%.
By region: In Latin America, revenues plunged 24%, in the US and Canada, where most of its business is, revenues increased by 19%, in the EU, the Middle East, and Africa, revenues increased by 22%, and in Asia by 13%.
Rideshare revenue stagnation.
What’s worse, revenue growth in its core business – its ride-hailing service – edged up only 2% to $2.3 billion. The technical term for this is stagnation.
To escape this ride-hailing stagnation, Uber got into an e-bike service (Jump), Uber Freight, and the latest red-hot fad, food delivery. Revenues of “Other Bets” rose 175% to $195 million. And revenues at Uber Eats jumped 72% to $595 million. All of this stuff is losing money hand-over-fist.
That $5.24 billion in losses includes the $300 million cost of its “driver appreciation award” – those dang drivers again – related to its IPO. And it included the $3.9 billion in costs of its stock-based compensation plans related to the IPO.
In terms of cash burn from operations – “net cash used in operating activities” – the company reported that it burned $1.64 billion in the first half.
But Uber is not going to run out of money any time soon. It has already extracted so much from investors, including during the IPO, that it is still swimming in nearly $12 billion in cash, cash equivalents, and restricted cash. Even Uber will need some time to burn it all.
No one apparently – least of all the executives at Uber – have any idea how to get to profitability, or at least get to a self-sustaining business model. The hope was for years that Uber would replace those peskily expensive drivers with driverless cars.
The autonomous cars would be capital intensive, sure, but capital is cheap or free (as the funds raised during the IPO), and even underpaid humans are too costly for Uber. And since there are no drivers, there are no problems with drivers. This plan looked great – until one of Uber’s self-driving prototypes (with a human onboard) killed a pedestrian.
Instead of showing a clear and short path to profitability, CEO Dara Khosrowshahi dazzled us with vagueness during the conference call: Ride-hailing, he said, “should turn out to be a spectacular business long term.”
The business is already spectacular, in terms of its losses.
And “long-term” includes the hopes — that have been pushed out further and further — that autonomous vehicles will finally make it far enough to where they can replace those expensive human drivers, at a reasonable cost and without mowing down too many pedestrians. Meanwhile, losses pile up. And rideshare revenues stagnate.
The rideshare industry is a peculiar creature: It just about destroyed the taxi business – which was ripe for a big shakeup – because it is able to dodge taxi regulations and burn huge amounts of money, while taxi companies have to stick to taxi regulations and make money or go out of business – because taxi-company investors are not willing to fund losses.
But rideshare investors have been bedazzled by the promise of who knows what all, and are eager to fund these losses year after year without end in sight.
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Don’t forget Netflix, also due for a world of hurt soon
Uber isn’t even a FANGMAN stock so it’s not into the big time
It’s a sign of the times.
1. Negative interest rates = you pay someone to borrow your money.
2. The more money a company loses the higher its stock goes.
It’s a tough time being a (relatively) rational person, in many ways. Form the weird world of rampant financial speculation to the strange, unquestionable edicts (diktats) of gender and identity politics.
Maybe the best solution is just to go mad?
I’m off to strip down to my underpants and shout at some passing traffic. Bye.
You’re not alone on this, MD. I just shouted “I’m not going to take it anymore” out my window. I was fully dressed, though.
“You don’t make an impression until you take it all off” – Gypsy Rose LePoof
Yes, NIRP meaning Negative INTEREST Rate Policy has morphed to Negative INCOME Return Policy. They have similar DNA.
NIRP means when your bond matures your collateral is repaid in depreciated currency, which in real time means that stock prices go higher.
It is reminiscent of Pitirim Sorokin’s theory of the “sensate” (material is reality, nothing else is) civilization. In such civilization (ours), there is emergence of decadence, which involves an inversion of values, e.g. frivolity is viewed as creativity, cowardice is viewed as heroism, etc.
Back around 1997
When I got into power trading (the Enron days) you would hear a lot of stories about this or that young trader blowing up ( losing a million or so) and getting fired. Only to be quickly hired again by another trading shop.
My gut on the logic was that
“Someone who lost that much money must know something, to have had such a big trade on.”
In hindsight, 20 years later, I’m certain no one knew anything. and from what I saw at My time at AIG, mgmt wanted young guns to take big bets because it was asymmetric risk for mgmt.
If the trader blew up/failed, the trader would be gone that year or the next, if the trader made money, then management would get a large cut of that.
Not sure how much this portends to Uber and Netflix, but the whole “ the more money you lose, the more u must know what you’re doing” kind of reeks of “back in the day” power trading, to me eyes and eyes.
And don’t forget WeWork.
Because, when you get down to the brass tacks, their business is the subleasing of commercial space. Yawn. Not what one would call innovative.
Dumpster philosophy of finance: Lose:lose
Well written article and completely on point. I agree with everything you’ve said. Another Uber related topic never discussed on CNBC or other business networks are the vast number of criminal acts committed by some of their drivers (e.g. rape, assault, etc.). Additionally, I live near San Francisco and observe roughly three out of fifteen cars on the streets there with Uber and/or Lyft logos posted on their windows…….no, I’m not exaggerating! Additionally, they regularly double park on the busiest streets creating a traffic congestion nightmare with regularity! While they claim to be dog friendly, their website asks that you call your driver prior to his arrival……well forget it! They will say: No, and still charge a cancellation fee! I’ll stick with the traditional licensed taxi services who are not as expensive as many would think. To those of you continuing to buy their stock, you will regret it when the bottom falls out.
I mostly agree except that when I arrived in Las Vegas the yellow taxi charged me $60 to get to downtown, Lyft was $20.
When you find those Lyft drivers sleeping in their cars along your street…then it will all make cents.
I have long dated put options on Lyft, Netflix, GoDaddy and Chipotle. They are all drowning in debt.
“That $5.24 billion in losses includes the $300 million cost of its “driver appreciation award” […] And it included the $3.9 billion in costs of its stock-based compensation plans related to the IPO.”
These appear to be one-time expenses, so if you remove the $4.2 billion, they lost only 1 billion in the first half, or 2 billion by the end of 2019 if the rate holds. So they’ve improved profitability by 1 billion this year. Not bad!
ZeroBrain,
This year is only two quarters deep. And Uber will lose more money in Q3 and Q4. So the total LOSS (not “profitability”) for 2019 will be much higher.
Also stock compensation expenses are NOT one time. They’re recurring every year. But the amounts will be smaller going forward.
Nonsense, they’re blitzscaling. Also, I did recognize that losses will mount in Q3 and Q4. As I said, the $2 billion loss is the full-year extrapolation of the 6-month burn rate after zeroing out the one-time $4.2 billion expenses. Last year was $3 billion and this year they’ll lose $2 billion (minus the one-time items), so they’re nearly profitable *already* and in a few years they’ll be *printing money hand over fist*.
Aside, I think you missed my satire, this one is intended to be a little more over-the-top and obvious :) Whatever I might lack in financial acumen, I make up for with Cramer’s stock tips.
Well exactly – and if they keep at it they WILL get to the horizon eventually – right . . . RIGHT?!
I did miss the satire. It was late, and my brain wasn’t functioning any longer :-]
Now I understand! Every analyst on Wall Street must be a satirist.
Now it all makes sense.
Don’t forget, they are making these losses during the “good” times…..Saying that, if it does go bad, then the losses will fall as more and more people stop using them, as they seem to lose money per journey…so fewer journeys = smaller loss… lol
In countries such as Turkey, ridesharing has thrived as the economy stumbles due to being an alternative to car ownership.
These losses are not the only unsustainable feature of the Uber model. The drivers make a living by depreciating their vehicles
At, say 60 cents a mile (what the government says is reimburse-able) the drivers are eating their cars. Plus no benefits.
“Smaller going forward”? Hardly. Uber has more employees than ever, groaning under massive living expenses who will demand and get greater and greater comp. Few “talent” will accept a relocation to cheaper locales where there are republican controlled local governments.
All the accounting contortions blindsiding investors after the IPO is reminiscent of the last tech boom in 1999. Brand new leger-de-mains peddled by accounting firms shift embarrassing expenses and accruals around to more advantageous times.
Well, one sure way to lose 5.2B would be to hire me as CEO.
Chump change. Hire me and I could lose double that. I guess I missed my true calling.
You guys are small potatoes at losing money compared to governments. And no one is accountable. Free money.
Mind you government will just Jack up the price of air…oh sorry carbon.
I’ll see your 10.4B loss and raise it to 15.6B. After all, I must receive my CEO compensation. After all, isn’t that what this is all about? Legalized theft.
I think — *think* — that if the “investors” don’t consider it theft, then it’s not theft.
Oh, and I’ll bid 22.3B for the loss if you put me in charge. Of course, we’ll have to do a couple more rounds of fundraising, but that shouldn’t be any problem given “our” track record.
No way. You would end up being fired by the board of directors for not burning through money fast enough. Plus your true character would seep its way through as you most likely would feel guilt and shame for not making the company profitable. You can’t have people with scruples running the company, can you?
3.2B in stock comp expense… they don’t need no stinkin’ profits. When the lockup period ends in November, the techies will drive home prices to the moon. Laissez les bons temps rouler!
Alex
Let get this right, if Uber is a middle man and takes 28 to 40% of total revenues , Uber doesn’t own the vehicles, no maintenance hence Uber is just making almost all of the profits. Can’t wait for them to own their own vehicles
Didn’t I read another article on this site that pointed out that tech IPOs do not drive housing prices up because the employees who receive the stock options/grants already have extracted most of their value before the IPO (I forget how, the article explained it) and already had their effect on housing prices?
So this site contradicts your comment ..
Its a sure sign of the times that idiots race to invest their life savings into snakeoil and pipe dreams.
How dumb do you have to be to invest in a company that never once made a profit?
The avarice of man is hilarious. Like crackheads for money.
“How dumb do you have to be to invest in a company that never once made a profit?”
Slightly less dumb than the person (computer) who will buy the stock from you at a higher price….and therein lies the rub.
Folks investing in unprofitable companies whose stock price keeps rising remind me of the line from Men In Black 1, where Zed says “It’s like the party’s over and the last one to leave gets stuck with the check.”
Folks keep bidding up the price and selling to others – until someone has a “Margin Call” moment and starts the big dump. When that happens the folks who are first take the smallest hit – everyone else gets a guillotine haircut.
better to work for them. $3.2 in employee stock comp after the IPO. they have 16,000 employees, meaning $200k per employee. and of course not everyone got it, meaning there are more than a few millionaires.
Watch out for the same insider investors who make a lot on other platforms and even on Uber they might be the select few who do… Also, this kind has revolving investment, just to make sure no tax agent could find all their money in a three-year period.
If it drops below $25 it could a great steal.
In dense urban areas like SF etc. Uber will be around for a while. A leaner Uber in dense large metro areas that will eventually turn a profit.
Long term TNCs have a place in the large markets. There is a enough people with money that don’t have a car or limited access to cars, take public transit and need an alternative.
There’s a wide range between “have a place” and “is a successful business”.
Would you consider Uber successful if they turn profitable but lose 50% of their revenue? And what would their stock be worth then?
Grandfather lost his small bus company in the depression. He was a bit older and went to work for Greyhound in the mailroom in Cleveland. They were doing a lot of freight, so it was hard work. Greyhound’s business model served rural America, that’s where the people were. If people ever begin to move out of the cities today it probably won’t hurt Uber much. Greyhound was never an inner city bus company. That business was left to quasi public private companies, no corporate franchise ever developed, which may be the real threat to Uber, government interference and the parochial nature of inner city transportation.
My God! I just got an inspiration! Uber should install street scrapers on the front of every UBER in SF and LA. Then charge the city with a clean up fee per mile. It would be at least another 5 years before those losses became apparent. The investment community would go absolutely wild!!!
I read a convincing analysis suggesting the same thing. The only problem is the resulting valuation for a ‘mean and lean’ Uber is less than $5B.
Do we know how much Uber would need to increase the price of a ride in order to make a modest profit?
Their margins are in the -30% to -35%, meaning they’re collecting $0.65 to $0.70 for each dollar spent. So prices would presumably have to increase in the 50% range.
It’s my understanding that the UberPool is actually profitable when there is two or more riders in the car.
It is possible, however, it is also likely that the “profitability” comes at the driver’s expense.
UberPool rides cost around 70% of a “solo” fare; 2 rides would be 1.4x payment. However, the 2 Uberpool pickups do not equal a single pickup and dropoff: while the distance driven by the Uberpool might be only slightly longer – the riders have to wait longer and the driver has to endure 2 pickup and dropoff times instead of one.
Then there’s the fact that Uber (and Lyft) have cut driver compensation literally to the bone.
Hi all
I just don’t get it just when did running a company not to make a profit become a thing? and one that seems so popular and is applauded as though it’s a great achievement.
This company is so far from being a new start up as is possible I mean its over 10 years old already and not only has it never made a profit even they don’t know when or if it will ever make a profit. What an outstanding business model that is and so worthy of its tens of Billions of Dollars of valuation and investment in.
Anyone that bought into their IPO in my opinion deserves all that they get and I’m pretty sure it won’t be a return on their investment. You would be better off buying fireworks at least that way you would get to see some pretty lights in the sky whilst watching your money go up in smoke.
It would be really bad if Uber was the only example of this new insanity that is now seen as being normal but unfortunately that is far from being true. Who knows when it will end but when it does end it’s going to be badly and ugly that’s for sure IMO.
The idea was to corner the market by doing business at a loss until competition disappeared, then jack up the prices to profitability (and beyond).
What they forgot is that this only works for industries with a high entry cost. Anyone who can put together a simple phone app and a social media campaign can play… and there’s always someone else ready to undercut your prices.
“Disruption” isn’t a business model – it’s a catch phrase designed to cover up the real business model: offering lower prices by ignoring laws and regulations designed to ensure fair competition, protect consumers and employees, and using some of the money received to get those protections removed. One wonders what the next catch phrase will be.
Precisely. When Uber was (temporarily) banned from Austin, another company put together a rideshare app and service within a few weeks. *There is no moat for Uber.* None. At some point, they will have to figure out a way to add value. Until then… the fact that their stock price is greater than zero is a wholly unearned gift.
Well said, Anon. I doubt taxi firms, in their beginning, were regulated any more than Uber/Lyft/etc are now. Over time, regulation was probably demanded by the customer base to deal with the depredations caused by any endeavor not ‘well-regulated’ (to quote ol’ A. Smith), coupled with the opportunity to obtain a juicy revenue stream for the polity. Chuck in a lack of profitability unless the ill-considered Gilded Age Vanderbiltian strategy detailed in your opening paragraph somehow succeeds (and the SEC continues its long slumbers), the clock is running out on this process-how long to find ourselves back where we were just before the disruption is the question.
May we all find that better day.
Global leading disruptors like Uber that grow at a blistering pace are almost always worth the money.
I still kick myself from time to time for selling Netflix and Chipotle in January 2008 when i got scared by the global downturn .
As a shareholder (skin in the game), I am very bullish on the prospects of the company.
Decent CEO, solid engineering, lot of markets to disrupt. Anything transportation (air travel? shipping? school bus?) is up for disruption.
Solid engineering? Their SDC program is a joke compared to Waymo. This is to say nothing of the fact that nearly everyone in the space has started walking back their ridiculously bullish predictions around when level 5 will arrive.
You’re a bagholder.
Hmmm, decent CEO? I doubt that.
Dara’s only job was to get the earlier investors an exit. He has performed beautifully in that regards, and he will be rewarded even if Uber bellies up tomorrow. All of the problems that was in the press about Uber hasn’t changed one bit. It’s just the media attention has gone elsewhere.
Kalanick wasn’t fired because he was stupid, or couldn’t run a business, and although the optics of things were bad at Uber at the time of his firing. It was only an excuse to get rid of him because the investors wanted their money out. Kalanick didn’t want to yet because he actually thought he could build a profitable business out of Uber.
In truth, Kalanick would’ve been better positioned to keep Uber alive for the long haul, even if he was cutting a whole lot of corners in the process. Dara is there just to ensure the corpse is alive long enough to get the big money out. If anyone is an investor in a this type of business, a simpler way to look at it might be to compare the only two competitors on the market. That should give you an idea of which might do better in the long run.
As for self driving cars, year after year, I hear how level 5 is just around the corner, the funny thing is when you ask any of the experts about time frame, you’ll notice that it keeps getting stretched further out as time goes on. The technology might be some of the way there, but no one has worked out the whole picture on this. Not on the business side, not on the insurance, or the legal stuff.
akiddy111,
“…grow at a blistering pace”… hahahahaha… 2% revenue growth in its core rideshare business is now “blistering?” This is one of the funniest statements I have read here.
They’re in the taxi business, for crying out loud. And now that they discovered the limits of the taxi business, they’re trying to get into ebikes, food delivery, escooters, whatever…
Which means in essence they have no plan for profitability long term and will burn ALL that cash avail in the SHORT term to find a long term solution they will never find.
Should this be filed under “predictions that didn’t go well”?
If people are feeling so strongly about it, why not invest own money to short the stock, watch it go to zero and make big bucks?
GP
Well, one reason is 70% of Uber stock float has already been shorted (AKA: that train done left the station).
You can’t just sit around in a Starbucks and cheaply short Uber; the required fee to borrow Uber stock so you can short it is rather expensive.
Javert Chip,
[Perhaps you wanted to write 17% and not 70%?]
You are right, Starbucks is indeed the best place to place trades and to make posts :)
There is no easy money – it’s all risk vs reward. If someone is convinced company will fail, 5-6% is not a big price to pay. I am just saying rather than ridiculing others isn’t it better to back up convictions with dollars of own?
When someone bids to sell UBER in the market for $40, there is always a counterparty who thinks that’s a good price for the trade to go through. One of them is wrong?
Easy call, but shares are very difficult to borrow to short for the little guy, and the put options are priced for near certainty of failure and are therefore obscenely expensive.
In other words, the Uber opportunity is so bad that you can’t even make a buck betting against it.
I am curious if any of you know who gets the money that is charged for borrowing a stock when shorting it ( my broker called it interest). When I investigated shorting interesting stocks and ETF’s, they carried interest from 12 to 40 percent and I could be asked to cover them at any time. Some stocks you could not get.
Except they aren’t really in the taxi business, are they? Taxis pay taxes, and medallion fees, and carry insurance, and are regulated.
By Uber’s self-description, a loan shark is just a bank with a different branch office. A bootlegger is just a distiller with a different SOP. A rub-and-tug is just a physical therapy practice with a different end result. And so on.
“Global leading disruptors like Uber that grow at a blistering pace are almost always worth the money.”
Only the few that successfully grow into sustainable profit-making businesses.
The other kind died by the dozens in 1999-2001 and again in 2007-2009.
And then there are the ones like Theranos… it too grew at a blistering pace, until it became clear that it’s headline product was a techno-fantasy… sort of like “safe driverless cars”.
“That’s a bingo!!”
Uber and the like are conning people into investing into a business that will require sensor tech and machine vision that is light years beyond anything you could ever afford to put in a car and predictive analytics that would be at a level needed to build semi-conscious AI.
How about a new slogan: Uber – Where dreams and Yellen bux go to die.
We’ve reached a stage in the rampant speculation of ALL asset classes where the fundamentals don’t matter a hoot – it’s all just based on the ‘bigger fool’ [momentum] theory.
There’s no other basis for buying bonds that yield nothing, or even less than nothing. Or stocks of corporates who are pumping their EPS via buyback programs (which should be legally classed as fraud).
This is all incredibly dangerous. Amazing that the only response to it is to…reduce IRs to turbocharge it all.
Madness become normalized.
In Europe we already have examples of negative rate mortgages: you get paid to take out a mortgage (and sometimes for business loans as well). At the moment these are exceptions to the rule and the yield is just 0.3%, but give it some time and I will start looking for the biggest castle in Europe to buy, and have the bank pay me a fortune every month for the privilege.
The stronger negative the mortgage rates get, the more attractive it is to splurge on expensive properties (and the more money you make on the “investment”). Doesn’t matter that RE prices are already 20x higher than 25 years go (in Netherlands, most other EU countries are a bit behind), RE prices can only go up thanks to central banking policies, what could possibly go wrong :)
When you are offered a 0% interest rate for a car purchase in the US, this doesn’t cause everybody to run out and buy a car. That’s because you still have to repay the principal on an overpriced vehicle. Buying a house is no different.
If central banks want to entice people to buy things, they need to figure out how to reduce the purchase prices, not play with the interest rate.
Now, if they offered a 30-year negative rate mortgage with no repayment for 30 years, I might spring for that overpriced house as a 54 year old.
In Denmark you can get a 10 year interest-only mortgage.
So, yeah, you do get paid to borrow, however, there is also service fee going with the mortgage and that has been rising and rising for some years now. Today the service fee is more expensive than the mortgage payments :).
Well, there is a rationale for buying negative-yielding sovereign debt if you’re a European institutional investor. Bank “Bail-Ins” by depositors are very likely to become a reality in the next financial crisis. Losing a fraction of a percent a year on a government bond would be far less destructive than seeing ALL your money in a bank (above the deposit insurance threshold) converted into “equity” in a restructuring.
I don’t think being bailed out is what investors are hoping for.
What they’re hoping for is for negative yields to get worse.
That’s literally the only out for anyone buying negative yield bonds.
In 1999 there were a number of Internet start ups spending IPO money to increase revenue without increasing the bottom line. I remember toys.com. It spent money on advertising and discounting merchandise, but was unable to raise prices high enough to yield a profit. They were delisted during the crash.
During the Dot Com boom there was a funny cartoon done by a fellow called Matt in one of the UK daily papers.
It showed a bank managers office, where the manager was handing back to a loan applicant a folder marked Business Plan. The comment from the manager was ” I am sorry, but there really is no call in the present climate for the Bank to lend to a profitable business”
Nothing much seems to have changed, except the numbers are vastly higher!
“until one of Uber’s self-driving prototypes (with a human onboard) killed a pedestrian.”.
Ah the old days, circa 2016, when we San Francicans were promised level 5 driverless cars on our streets. Driverless cars have got to be one of the biggest con jobs since the dot bubble. What is worse is the low IQs of so many people who bought in to this nonsense hook, line and sinker.
Uber Eats…..capital
Uber Blows Capital, you mean
Until they run a train network of self driving trains, self driving cars are never happening. The fact they haven’t yet tells you all you need to know. Trains are a billion times more simple, running on its own tracks with a single track operator essentially.
Hitachi has built the AutoHaul system for Rio Tinto: automated trains went operative in Q3 2017 and already account for 60% of their rail traffic in the Pilbara mining district.
As part of the grandiously named Mine of the Future (obviously ®) Rio Tinto already has over 100 Komatsu autonomous mine trucks (to increase to 140 at the end of the year; Codelco has a similar number in operation in Chile) and 11 autonomous blast-hole drills (ADS, developed by Omron) in operation in the same district.
The change is already happening, but since Musk isn’t boasting about it nobody really cares.
Automated trains for mines is radically different than automated cars on roads. The roads have pedestrians and bicyclists, for example. For that matter, do these automated trains operate on tracks with non-automated trains? If not, that another radical difference vs. self driving cars.
Wow, I have never seen people wanting a technology to fail this badly since the days of the Betamax vs VHS diatribe, which says quite a lot.
…but it fits the Uber narrative, so the Kool-aide continues to flow.
MC01, you might be interested in this article:
https://www.eetimes.com/author.asp?section_id=36&doc_id=1334988
BTW, pretty much anything Junko Yoshida writes is worth reading (she’s a rare trade pub writer — she asks questions)
Article title is: Mining Trucks Hint at Future of AVs
Hard to say why mining trucks are a proxy for anything. A mine is a restricted zone with a very limited and controlled set of traffic.
The article does note that a mining environment is constrained.
Mines also don’t have children running around, non-autonomous vehicles, or even much pedestrian traffic. The numbers of trucks are also unimpressive: 500. So it seems a mine would operate a literal handful of such vehicles.
The Copenhagen metro is a robot. It works now because they literally deported from Copenhagen the one loon who kept forcing the doors causing the trains to stop.
Self-driving Anything only works in a very controlled environment and this will be the case until we finally figure out how to build something actually intelligent. Current “AI” is a dead end (again!).
It’s strange that on average corporate profit margins are close to record highs and there are so many companies that are making losses. Maybe just the result of too much money sloshing around at the top.
Monopoly pricing. It’s good if you’ve got it. Not so much if you don’t.
Earlier this year I was in awe when I discovered Deliveroo, the London-based food delivery service Uber is taking on together with the various money losing Delivery Heroes (pun intended) with Uber Eats, managed to lose £1.2 for every pound in revenue in FY 2018. Uber managed to outdo them by losing $1.62 for every dollar in revenue… and we still have four and a half months to go in 2019.
Food delivery is a financial black hole and to make matters worse entry barriers are so low: all you need is basically software and servers. Even in cities like Metz (population 117,000 at last count) one will see delivery riders from three different operators buzzing around, and that’s on top of the old fashioned pizza delivery boys.
But the genius strategists at Uber probably felt they weren’t losing enough money, so they stepped into another financial black hole: bike sharing.
Singapore-based oBike has left a trail of rusty and vandalized bikes, not to mention big piles of unpaid fines and bills, from Amsterdam to Kuala Lumpur. To top it all up the company owners (safely ensconced in China at last check) have been charged with fraud by Singapore authorities… if you know how that city works it says all.
This is the market Uber feel will bring them “growth”, and it’s easy to grow when you can price your goods and services below cost and local communities will be forced to clean up after your mess and deal with the teenage delinquents you cater to. Well, at least Uber will be easier to fine than oBike…
Its not all bad guys and girls, there is a HUGE future business opportunity here ,I can see it now ,body armour, weapons, designer safe suits personal security to save these parasites ,location removal when people realise the corruption will there be any place to hide? With that in mind I have a little island just of the coast of Tasmainia very secluded very private just give me a call confidentially guaranteed but very very expensive but hay you have plenty of money dont you ????
Uber and Amazon (and others of course) subsidized by investors to lose money and put competitors who aren’t losing money out of business. Unregulated, unrestrained capitalism is contrary to what once was the common goal in a democracy to fair trade. I’ll walk or bike when I can, take a taxi or go to Barnes and Noble when I can and subsidize businesses that seek organic growth instead of cynical monopolistic pathetic pseudo capitalist opportunistic war mongering. These guys are no good and I’ll use choice to avoid them.
Amazon made over 2G in the last quarter.
Had Bezos et.al. not stumbled into web hosting, I think Amazon would already be gone.
These money losing businesses are bad for the economy for sure. Look at what Enron and MCI did to their respective industries and employees (and other stakeholders).
Stuff like WeWork, Salesforce (maybe…), Amazon (retail operations), Uber…= very bad for the economy: misallocation of resources.
Ahold claims that Bol.com (Dutch Amazon without web hosting and copy of Netflix) makes money so my guess is that core Amazon has been profitable for ages. Amazon has pricing power in books so that to me looks highly profitable.Other parts of their core business like selling electronics looks to me as having low profitability but IMHO core Amazon is profitable so it doesn’t need web hosting for it to be a going concern.
Amazon seems to me to have had as policy for the last 20 years to invest so much money in at that time non-core business to show no profit or loss. A right policy IMHO for Bezos though maybe not for the investors
Maybe change the company name to Unter.
The Wall Street Journal has suggested that investors “re-think” the “quaint idea” of profits.
Uber is trying to start up in Vancouver and there has been a mass marketing campaign for years to denigrate the taxi business to get Uber in. (I wouldn’t know or care because I never go to Vancouver and would use the bus before…… However, it is on the news weekly; the whines and propaganda campaign). The Provincial Govt gave the go ahead PROVIDED uber drivers obtain a class 4 license (commercial……like taxi drivers) and vehicles are inspected and approved by a 3rd party inspection service, plus there has to be adequate commercial insurance, etc. Just.Like.Taxis. Population thinks they will be getting some great available cheaper service, especially after ‘events’ and they need a ride home. Self driving uber? Maybe after Casper gets his/her class 4 commercial license. And who insures self driving cars, anyway? Uber with investment dollars? ZIRP idiocy in action.
Work as an uber slave for 5 months. Knew the first day I was not going to turn a profit.
Needless to point out I wasn’t able to manage minimum wage after expenses and still they took away my “certification” to take uber fares.
Lose, lose…
I often worried about the defrauding and crimes uber sets up to be committed on innocent lives. Shameful greedy corporate stupidity…
Under current monetary policy, corporate credit quality in effect is less determined by cash flow from operations, but rather by cash flow from fundraising and that’s where those businesses excel. Perhaps it is indeed the smart money that is investing there.
I think it’s great!
Instead of government subsidizing public transportation, private investors are now doing so, and with pleasure!
Undermining mass transit is part of the business model, and has an ideological component, since most of these characters are arrested-development Glibertarians who worship at the altar of that bag lady, er, “novelist,” Ayn Rand.
They don’t believe in the public good, and are doing their utmost to make sure it isn’t even a topic of discussion.
How Can a Company Lose $5.2 Billion on $3.2 Billion in Revenue?
___
We lose money on every sale but we make it up on volume!!
So what happens when these companies eventually go out of business – after breaking the taxi industry and hurting public transit? Cities are going to have to start from scratch.
So what happens when these companies eventually go out of business – after breaking the taxi industry and hurting public transit?
That said, what happens when this sort of paradigm is applied to crucial systems on a global scale?
The good news is that the results aren’t in yet. The bad news is that you’ll find out eventually.
I’m going to miss you guys.
“”So what happens when these companies eventually go out of business – after breaking the taxi industry and hurting public transit?””
Auto sales will start going up again?? That would make Detroit happy.
Not sure. Those Uber & Lyft drivers are buying and burning through a lot of cars too.
And I don’t think Uber & Lyft will cease to exist any time soon. They have a lot of customers, and customers like the service. But they will have to charge more at some point in order the continue, and business growth will end, and it’ll be a daily struggle. At that point, share price will be low. And they will have to show that they can make money.
In order to turn a profit they would have to increase prices – then they would have no advantage over cabs.
So then what would be the point?
1. Uber isn’t going anywhere.
2. Maybe if taxis provided a better service, they wouldn’t go the way of typewriters.
A few weeks ago it was raining so I took a taxi to pick up my car from the shop rather that walk in the rain.
The taxi was dirty, the driver was dirty, and he spent the whole time texting while driving. I’ll never make the mistake of taking a taxi again.
Man is not so much a rational animal as he is a rationalising animal.
People will decide they want something that’s really, really stupid, and then use all their ingenuity to come up with invalid justifications for it.
It starts with an overemphasis on creativity and innovation to the general exclusion of critical thinking. Flights of fancy are far more pleasant than having to figure out how to get safely off the ground and back again. A person’s nature makes them happy, while their reason can make them angry, and people tend to prefer to be happy than wise. People hate it when you burst their balloon.
People often would rather be happy and dead than unhappy and alive, which one must admit may not be an unreasonable position.
As Huxley said, there is no sadder sight in the world than to see a beautiful theory killed by brutal fact. Preserving a beautiful theory, you might think, would therefore depend on using one’s ingenuity to kill off the brutal fact. But in practice it’s a lot less work to simply ignore it.
These tendencies can make people extremely dangerous. Most people are bright enough to figure out how to be more of a danger to others than to themselves, so in the short term it often works out. Still, a lot of people don’t manage it, and there just aren’t enough Darwin Awards to get them all out of the gene pool. These tendencies will inevitably lead to self-extinction.
Just as debt tends to increase faster than the means to service it, leading to crashes, the ability to destroy tends to evolve faster than the means to prevent that ability from backfiring. Uber is sometimes cited as an excellent example of creative destruction, but unfortunately for Uber investors, not in a good way.
Amost everybody does it. For example, Einstein famously defined insanity as doing the same thing over and over again and expecting a different result. What people don’t realise is that he was referring to himself.
It takes all kinds to make a world. I’m glad I’m not one of them.
Un-thanks, as always, for the insightful cheer. How easy for any of us to break a Ming vase, how difficult for any of us to make one…
A better day to all.
It’s not just investors who are subsidizing Uber; the company’s business model relies on the drivers to do so, as well.
Uber’s plan is to become Too Big To Fail and be bailed out by the government, like the FIRE and automotive sectors. America will soon have public transportation, just not the conventional kind. The government will subsidize your Uber rides! /s
You mean it as /sarc, but it’s not in any way, shape, or form! They already DO subsidize housing, food, transportation, energy bills, healthcare, education – as long as one meets the special-treatment criteria of the day. Why not Uber? It’s only fair.
In San Diego apparently lots of people use those scooters, (love them) and lot’s of people hate them, sabotage them, dump them in the bay. ER MDs are trying to get some numbers, they see a lot of accidents. Motorized scooters and pedestrians don’t mix. SD is like SF, very hilly and bicycles don’t get it. Whatever happened to the Segway? Any company that embraces transportation, in general terms is more likely to succeed than a company that specializes in one thing. There are more people and they need to get around, while 50 yrs ago you left your house at 8AM to work and came home at 5PM. Any reliable transportation system would do. Nobody lives that way anymore?
Segway is in the electric scooter business.
pulled their covers when they sold ‘grab and yank this’.
Uber deserves considerable credit for disrupting an archaic, inefficient industry. But the fact they they are seeking to expand into new services before mastering their primary product shows they don’t have a steady hand at the helm. Cab companies are slowly adopting ride-sharing technology and Lyft already provides suitable competition. Investors will eventually get tired of subsidizing Uber riders (about 35% of every ride) and Uber will have to learn how to live on a thin margin. I predict the stock will drop to about $15 before stabilizing at around $25.
An “inefficient” industry that was a) profitable, b) paid higher wages and c) cost less than Uber. Maybe you use a different dictionary than me because to me that doesn’t sound inefficient.
ps. Uber isn’t growing in cab fares. I doubt their plans to find their AWS will succeed so using their yearly intake of cab fares as proxy for the value of the company you get something around $5 billion
The great flood of bank credit has consequences …
– Negative yields on the debt of near-bankrupt firms and sovereigns,
– Stratospheric rents in diverse locations as Dublin and San Francisco,
– Real estate speculation and the cultivation of greater fools as the business of nations,
– Funding for enterprises w/ negative returns: fracking companies, app unicorns (like Uber), the United States government (Ponzi Pentagon),
– Repeated all-time highs in US equity markets along w/ negligible marketable risk,
– Debt-ridden companies with rotten balance sheets and lousy fundamentals making the all-time highs,
– Steadily increasing concentration of CO2 in the atmosphere and all the consequences that will fall upon our grandchildren with the fury of gods or demons,
– The increase of the rich who believe they are rich because they hold shares in ventures w/ broken balance sheets like Uber … and the rich’s insecurity and anxiety thereby,
– The increasing rebelliousness of those around the world left behind by the rich, and their increasing propensity for violence.
– The dependence on the dollar as the world’s funding currency at the same time the creditworthiness of the dollar issuer falls under scrutiny.
Of course, everything might change tomorrow, when the bottom rail is on top.
The losses were in conjured-out-of-thin-air Yellen Bux, not real money.
I think Uber’s big money maker won’t be ride sharing, but automated cars. Once the humans are removed from the equation, that’s when the KA-CHING starts happening. Only question is if they can wait long enough to happen. I think the answer is yes.
If Uber could develop automated cars and get monopoly on that technology than they could be golden but it seems to me that it is very unlikely that Uber could be the only maker of automated cars. What that means for the taxi dispatcher part of Uber is that you go from a situation were every operator only runs 1 car to a situation were every operator runs at least 30 automated cars* and needs at least a million or so in working capitol. Going from working 30 taxis for Uber to working 30 taxis with your own app doesn’t sound to hard especially if income gets 50% larger.
Or Uber lowers its share of the fare.
It is more KA-BOOM than KA-CHING
*) full-time job = 8 hours. 15 minutes per car for cleaning up and checking if everything is still working. so 32 cars per 8 hours. I like round numbers so 30 cars.
My Amish neighbors keep asking when uber will be available.
Could be a new revenue source to get investors excited about.
Whole new definition to “hay burner”.
Wolf, you say that driverless vehicles, aside from killing people, look great. Please explain how you think this would work, because it baffles me. Instead of an extremely asset-light business simply bringing together those with a spare seat and those looking for a ride and taking a slice of the transaction – on paper a neat idea but look at the losses, they would now need to own a vast fleet of vehicles and all the overhead that entails, albeit minus those pesky drivers. If they can’t make money on the former, how on earth will they make money on the latter? Please don’t tell me that they will use driverless vehicles owned by others and pay them a pittance for the use. I can just see my Leaf starting up and leaving my driveway on a call and coming back with the back seat covered in puke, or mowing someone down and I am up to my armpits in a lawsuit. As they say about plans, they are great until their first encounter with reality. I suspect you have given this some thought, please share your views.
Ian,
Just a back-of-the-envelope example: If a truly mass-produced AV (not a prototype) costs $100,000 for a basic Uber-type car, interest (4%) = $4,000 a year, and depreciation (5 years to zero) = $20,000 a year, plus insurance. These are fixed costs. There would also be variable costs: the cost of electricity to charge it, some cleaning & maintenance, etc.
Drivers are all variable costs to Uber — the more Uber books, the more the drivers cost. That’s not the case with AVs (up to the capacity limit). An AV could run something like 20 hours a day, 7 days a week. So, compare that to having to pay drivers (in reality several drivers) for a combined 20 hours of work a day, seven days a week.
In addition, Uber spends a large amount on recruiting drivers, and there is a lot of churn. This is a constant expense that is very unproductive.
Also, Uber spends money managing its drivers and dealing with the problems that arise — such as defending itself in class-action lawsuits that claim that these drivers should be employees not contractors. Uber is involved in lawsuits around the world concerning its drivers.
In short, there is a slew of expenses that Uber would shed through a switch to AVs.
Yes but, this is like Walmart providing jobs without a living wage, and on steroids. What happens to the economy when thousands of cab drivers lose their jobs? Local communities are not oblivious to this, they now either resist the corporation entering their area (Amazon Queens) or they tax them. In economic terms Uber gets profitable, if they can find a city that will have them and if the local government doesn’t tax them and their service. As long as (1%) investors (subsidized by low interest rates, much higher for consumers) throw money at Uber, and throw locals out of jobs who now need social services, locals are going to take their cut.
The cab drivers become murderbot…errr…autonomous vehicle repairmen.
Thanks Wolf, I think the ‘some’ maintenance costs would however be fairly significant. Added to that, what they would then be basically running is simply a taxi company instead of a tech company with what appeared to be a first mover advantage. If they think all other taxi company’s are going to sit and watch Uber take over their territories and not go out and buy Ford’s off the shelf AV for themselves they are deluded as so are the analysts putting the target price on their shares.
Why wouldn’t Ford run their own cab company or important destinations for cabs (Hotels/airports/malls/hospitals etc.)
I suppose that any day now Apple is going to launch a phone that can be used to beam me back to the star ship.
Read my lips — there will NEVER be a self-driving car.
AI is an oxymoron. It is not possible to manufacture an intelligent machine.
Machines can do – exactly what they are programmed to do – NO MORE
“Machines can do – exactly what they are programmed to do – NO MORE”
There are a lot of humans who can’t even do that :-]
A few years back I was doing superficial research on Amazon and sort of comparing a few metrics with Costco. The main conclusion of that, was to see that Amazon built an amazing cash machine, primarily because they turn their inventory super fast, then re-invest fast profits back into more real-time virtual inventory, that spins like a perpetual motion machine. By contrast, a well-run company like Costco, had a loads of inventory sitting in distribution warehouses, which s then shipped to retail/wholesale stores where that inventory sits stagnating, waiting for sales. Amazon has highly tuned-in just in time inventory that moves super fast, Costco merchandise is far more seasonal and cyclical, sometimes just sitting there for months, eating up space. Costco has to play the game of adjusting space and time to shift puzzle pieces around, which is labor intensive, e.g., moving dead products into places where customer demand crashes — which results in Costco lowering the price just to get rid of crap. Bad product mixes that burn up time and money is more a Costco problem than an Amazon problem. Additionally, Costco has an expensive labor force, where employees make time & half, i.e., they have people folding clothing all day for $35.00/hr … not an Amazon problem! It’s all about a super efficient cash machine, versus an outdated model that places too much pressure on net profit. Costco will obviously survive, while Amazon takes over the world. In regard to Uber, I’ve never looked at them ever, but I assume they think they have a cash machine. In a way they are capitalizing o the taxi business and turning it into a commodity, where they simply take a global fee for every taxi fare, sort of like a tax that keeps flowing. Some commodity-like enterprises can make money, if they don’t just burn through investments. Maybe Amazon should buy Uber and use it for a delivery service?
Amazon.com Free Cash Flow March 31, 2007 = -313.00M
Amazon.com Free Cash Flow June 30, 2019 = +5.555B
Re: The $35/hr folding clothing. That’s for a normal topped-out employee making about $24/hr — which to me is an amazing amount to pay someone to resort stacks of cheap clothing; seems illogical!
“With free cash flow, on the other hand, what counts is when the money actually changes hands. So if you have a business where your customers pay you quickly, you manage your inventory well, and you’re able to take your time in paying your suppliers, your free cash flow can be consistently positive even when your net income is not. Which is exactly the kind of business that Jeff Bezos and his colleagues have constructed at Amazon over the past decade.
Where Amazon stands out is how excruciatingly long it takes it to pay its suppliers — 95.8 days on average last year, according to Morningstar, compared with 30.1 for Costco and 38.5 for Walmart.”
https://hbr.org/2014/10/at-amazon-its-all-about-cash-flow
It is not that big a trick to buy and sell inventory online just in time. The trick is manufacturing it, and getting it to the warehouses JIT. Amazon can only spin this real time cash machine as long as they have suppliers that play along and allow the inventory cost to be pushed down on to them. When disruptions happen ( trade wars, storms, vendor collapse) then the whole JIT thing can smash you over the head. Amazon does not have magic “Star Trek” replicator machines, they have to buy things from real manufacturers in the real world that have set up costs, minimum run sizes etc. to deal with.
Senecas Cliff,
No doubt there is risk in Amazon concentration, but to be fair, Amazon isn’t an island and all the other retail entities are playing the same game, thus, Amazon’s market domination is super powerful. Walmart and Costco and big chains have that same type of leverage, allowing them to pressure suppliers and extort and extract special conditions. If you wanna sell soap to the masses you have to play the game. Looking back into the Great Recession, all the chains knew they had to adapt to Food Stamps and in many ways, during the economic collapse, Food Stamps helped all these retail people stay on track, with merchandise that flows like commodities, i.e., everyone has to eat. As the link above indicates, Amazon is able to pay suppliers at a slower rate, but that sets up a whole new side game, where Walmart can pay a supplier faster and maybe get some premium out of that function. As for taxi service and delivery, it’s probably not too different, in that Uber can delay and slow down paying drivers. The market apparently will sort this out in terms of who is willing to not be paid, but as risk increases and cash becomes more scarce, I assume that suppliers/drivers will want their money ASAP and not allow themselves to become fools.
The type of person that drives for Uber doesn’t have the cash cushion to wait 90 days for payment. If Uber waited 90 days for payment than most of their drivers will find other work. I wouldn’t be surprised if a lot of their drivers don’t have enough cash for 90 days of gas and toll
Stock market went down 89% during crash of 1929. Just saying must have been a lot of stupid then too. Roaring twenties. The stupid will be over soon enough and then we all pay.
What ever happened to the rule if you don’t make money in 5 years it’s a hobby, not a business.
Its a shame that these day tall buildings have windows that won’t open. Now we don’t even get the enjoyment of watching the people who destroyed our world and ruined our lives falling from the 30th floor when the confidence games and pyramid schemes crash.
I am getting a little discouraged with public companies. It seems so few really exist for long term shareholders. I think berkshire does a good job. Maybe 5% -10% of others. As long as share prices are going up no one sues because they haven’t suffered catastrophic losses yet. I think when the crash comes there are going to be a lot of lawsuits. Tesla seems the most obvious as Elon seems to play fast and loose with facts.
Uber, Lyft and other ride sharing companies have a hard time keeping drivers. Most quit after three months.
Also most drivers earn way less than minimum wage.
https://www.npr.org/sections/thetwo-way/2018/03/02/590168381/uber-lyft-drivers-earning-a-median-profit-of-3-37-per-hour-study-says
I heard from a good source that Uber’s getting desperate and letting registered sex offenders back in the game.
Of course, in investor-speak, the taxi industry was ripe for a shakeup because human beings were actually managing to earn a living at a ugly, risky job by working long hours. Any industry with regulations to protect the customer must be shaken up. Any industry where human beings are managing to make enough money to live must be shaken up.
Travis-check. Privatize more profit, socialize more risk. Whaddya mean the lumpen-public’s mindset might revert to the one of 1796 France or 1917 Russia? They aren’t hungry enough-yet.
Again, a better day to all.
Sold UBER for $42 ahead of earnings and bought it back at $39. That said, I’m not very concerned about what it does short-term or if I go deep into the red.
You see Uber is my one and only unicorn/tech stock holding because I feel it’s the Bitcoin of the Gig economy. If your ‘long’ on rising unemployment and autonomous vehicles, then how does Uber not eventually rise 10-fold in the coming decade? OK, so they do need to do one thing..Stay in business. And I agree that could be a real challenge, but I’m seeing something that so many alt-econ bloggers out there seem to be blind to. And that is that foreign central banks are printing up their currency by the container ship load, and that currency is increasingly being used to buy up US Dollars along with US assets. Why do you think Gold’s rising ‘with’ the US Dollar? Those Dollars are going to (continue to) find their way into US assets like stocks, real estate and bonds. So while the Fed may have to continue cutting rates to weaken a strengthening USD, it’s going to be the world that willingly provides QE to US markets and real estate – Not the Fed.
Wolf,
Looking back on AMZN from the perspective of an online book seller that no one believed had a real business model. And seeing it fall from $100 a share to $5.60 after the Dot Com bust. Be honest. Do you think you would have seen value in it enough to invest say $20K worth at $40 a share and not cared where it went short-term? If you had this blog ‘back then’ would you be telling your readers to buy with both hands at say $20. Or would you be panning it as a dead stock walking?
But Amazon was different because it expanded and reinvented themselves; and that makes it totally different from say Uber right? Yes, but only in hindsight. I see potential in Uber because I believe the Gig economy is here to stay and the company that capitalizes on it best will win big. AirBnB requires home ownership; we know where that trends headed. Etsy and Task Rabbit are fine but require skills and generates sporadic income. Uber and Lyft are the only players I’ve seen which can provide someone who’s unemployed with a fairly stable income (with nothing but a driver’s license). But you need a car right? Nope. I talked to a guy here in the Bay Area while waiting in line who rents a car monthly and drives for Uber. Even writes off the rental on his taxes.
Books selling was profitable for Amazon in 2000 and it had high growth and didn’t need to reinvent itself to survive. Taxis are not profitable for Uber and it stopped growing fast. It needs to reinvent itself to survive.
Uber had a tax break from The Netherlands. They probably will carry this loss forward.
As long as the keeps ordering the FRS, ECB, BoJ and BoE to maintain pumping the PONZI SCHEME (QQE/EAPS/ZIRP/NIRP)… Uber and all the other garbage will remain in this lovely CIRCUS.
“As long as the..” BIS!
Like many other large companies I believe they get whatever money they want from the government/powers that be. There is heavy EMF emission from the cell phone for the GPS system required for Uber to function. I’m driving for Uber and I’m exhausted when I am done driving- even it is is only for 3 hours. There is also the easy tracking that comes along with it as well. The govt wants us weak and controllable.. and Uber is yet another tool to do this.