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They're burning investor money and have no plausible plan to reach profitability. Their best plan appears to literally be that the singularity might come early
by brians 10y ago
They're burning investor money and have no plausible plan to reach profitability. Their best plan appears to literally be that the singularity might come early in the area of personal urban transit.
They could get the benefit of the doubt... but then you see stunts like the recent self-driving fiasco.
- nodesocket 10y agoI actually don't think the self-driving announcement and implementation was a fiasco. Message got out there, media ate it up, and any potential "controversy" only further strengthened their positioning efforts against Google, Tesla and Apple in the self-diving market.
- xapata 10y ago> plausible I find it plausible that they can turn a profit on ride hails, despite it being a competitive market. FedEx, DHL, and UPS are all profitable.
- toomuchtodo 10y ago> FedEx, DHL, and UPS are all profitable. All of whom own or lease almost all of their transportation infrastructure (Note Amazon leased their own Prime planes).
- morganvachon 10y ago> All of whom own or lease almost all of their transportation infrastructure Most FedEx drivers are contractors who must supply their own trucks.
- toomuchtodo 10y agoFedex was held liable for mislabelling thousands of employers as contractors when they were not. "FedEx has settled a long-running dispute with FedEx Ground California drivers. The class settlement will create a $228 million fund to resolve claims by over 2,000 FedEx Ground and FedEx Home Delivery pickup and delivery drivers. Some claims date back to 2000 and some extend through 2007. The settlement must still be approved by the Ninth Circuit, but assuming court approval, will end one chapter in a bitter dispute." "In this case, the Ninth Circuit said that FedEx controlled the drivers and that they were independent contractors in name only. It was a major blow to FedEx, which has fought about its so-called independent contractor model of operation for many years. The financial benefit of the contract arrangement was big. For years, FedEx has been able to shift to its drivers the costs of FedEx branded trucks, FedEx branded uniforms, FedEx scanners, fuel, maintenance, insurance, and more. Drivers were not provided pay for missed meals, rest periods, overtime compensation, etc." http://www.forbes.com/sites/robertwood/2015/06/16/fedex-settles-driver-mislabeling-case-for-228-million/#7d8fc5db5f5a http://www.forbes.com/sites/robertwood/2015/06/16/fedex-sett...
- morganvachon 10y agoI didn't realize the drivers won that suit, good for them!
- curiousDog 10y agoSure but will that profit justify their valuation is probably the doubt. Fedex's market cap is $50bn right now.
- xapata 10y agoValuation is misleading. The later investors likely have enough clauses to protect their capital that they're not thinking of the investment the way a public investor thinks about buying a share. I think you're right that the valuation will become a lower market capitalization if/when they go public.
- notahacker 10y agoI think their opportunity to turn a profit on ride hails in enough local markets to justify their valuation is limited by [current and future] competitors operating on the same sell VC-subsidised rides at below cost business model. I think the longer they continue to grow revenues and vanity metrics and raise more capital, the more numerous those competitors get...
- xapata 10y agoYes, but eventually the subsidy will run out and companies will turn a profit or stop operating. Or maybe the investors will never stop the subsidy. That's fine, too.
- jsemrau 10y agoAnd of course a fantastic branding.