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In my opinion, assigning a value of even $28b to an app that could be duplicated by a single developer in under a week is probably a bad idea. Let's remember t

In my opinion, assigning a value of even $28b to an app that could be duplicated by a single developer in under a week is probably a bad idea. Let's remember that most of the money they've blown has not gone into capital expenditures - there isn't a giant fleet of cars they own that could be sold if they fail, for example. They've spent almost all of the money subsidizing rides to win customers and drivers - both of which could leave the platform for the next great app in a heartbeat. They have not gained any assets as a result of their massive expenditures. My personal opinion is that anyone investing in this company at any 10 figure valuation - much less 11 figures - is probably poised to lose most of their investment. We've seen through companies like Theranos how billions in perceived value can vanish overnight when business realities and investor expectations are mismatched. While these two companies appear to have reached high valuations through different means - Theranos through fraud and Uber through unprecedented hype - they may ultimately wind up in similar situations.

harmegido 10y ago
In my opinion, the key asset Uber has is their driver network. Like you say, anyone can build a similar app pretty quickly, but who will use it if there are no rides available? They've paid so much into user acquisition precisely so it is more appealing for drivers to join the network. In this light, the CMU investment makes a ton of sense. It's going to be extremely difficult for any other competitor to get the critical mass of drivers that makes grabbing a ride a <5min request, except in the case of driverless cars. GM (as an example) could quickly put them out of business by partnering with google and deploying thousands of self-driving cabs in a city and slapping an uber-like app on it. There's no other way to get that many drivers. Obviously the above example is a longer-term threat, so to say that anyone can just build an app and outcompete Uber is missing where the real value in Uber lies.

harmegido 10y ago

In my opinion, the key asset Uber has is their driver network. Like you say, anyone can build a similar app pretty quickly, but who will use it if there are no rides available? They've paid so much into user acquisition precisely so it is more appealing for drivers to join the network. In this light, the CMU investment makes a ton of sense. It's going to be extremely difficult for any other competitor to get the critical mass of drivers that makes grabbing a ride a <5min request, except in the case of driverless cars. GM (as an example) could quickly put them out of business by partnering with google and deploying thousands of self-driving cabs in a city and slapping an uber-like app on it. There's no other way to get that many drivers. Obviously the above example is a longer-term threat, so to say that anyone can just build an app and outcompete Uber is missing where the real value in Uber lies.