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I'd short Uber if it was publicly traded. I'm not sure how far away door to door taxis are, but I also would bet against Uber having a long enough market lock

I'd short Uber if it was publicly traded. I'm not sure how far away door to door taxis are, but I also would bet against Uber having a long enough market lock in to recoup losses.

aetherson 9y ago
Uber's driverless car strategy is incredibly implausible. You have to believe all of the following: 1. Uber will be first to market with driverless car technology. That is, it will beat Waymo, all the actual car companies, Apple, Tesla, and 100 other startups. 2. Given 1, Uber's driverless car technology is a durable technological advantage (ie, even if it's first to market, that doesn't matter much if Waymo follows it to market 3 months later). Note that we are at this point stipulating that this technological challenge is doable with a team that you spun up out of nothing a couple of years ago, as not-the-best-resourced team on the block. 3. Given 2, the legal issues with driverless cars are resolved well enough that Uber has a viable business. 4. Given 3, Uber can successfully raise money for an incredible capital expenditure (how many cars are we talking here? 1,000,000, very conservatively? At $20,000 ea, very conservatively? So $20B investment), and then handle that kind of capital investment. 5. Given 4, build up all the supporting infrastructure for this business (parking, local cleaning, etc.) 6. Given 5, this all happens within Uber's operational runway (like, starts within 3-5 years, finishes within 10 or so)? Personally, I'd put the odds of this at: 10% for 1 * 10% for 2 * 90% for 3 * 80% for 4 * 70% for 5 * 20% for 6 = roughly 0.1%. But even if you're way more bullish on Uber than I am, can anyone really argue for more than 50% for 1 * 50% for 2 * 90% for 3 * 95% for 4 * 95% for 5 * 80% for 6? That's still only 16%.
- placeybordeaux 9y ago
  I think that steps 2 and 4 are the biggest questions for me, but the details about keeping the cars running & clean are also good ones. Right now Uber can externalize the costs of a running clean car. Running their own fleet will mean that stuff like gas, maintenance, cleanliness, misc stuff that 5 star uber drivers do (free candy, water etc) will no longer be externalized and bore by their drivers. P.S. did you mean bearish instead of bullish?
  - aetherson 9y ago
    Nope. People who are more bullish about Uber than I rate their chance of being first-to-market with driverless car technology at higher than 10%, for example.
- ghaff 9y ago
  So Uber just needs to win, in a sustainable differentiated way, self-driving technology, get it incorporated into actual cars in production volumes, and roll it out as a new major national car rental company based mostly on very short-term rentals. Within, as you say, their operational runway.
- wdb 9y ago
  And then you have the question, if people want to be in a taxi without a driver?

I'd short Uber if it was publicly traded. I'm not sure how far away door to door taxis are, but I also would bet against Uber having a long enough market lock in to recoup losses.

aetherson 9y ago

Uber's driverless car strategy is incredibly implausible. You have to believe all of the following: 1. Uber will be first to market with driverless car technology. That is, it will beat Waymo, all the actual car companies, Apple, Tesla, and 100 other startups. 2. Given 1, Uber's driverless car technology is a durable technological advantage (ie, even if it's first to market, that doesn't matter much if Waymo follows it to market 3 months later). Note that we are at this point stipulating that this technological challenge is doable with a team that you spun up out of nothing a couple of years ago, as not-the-best-resourced team on the block. 3. Given 2, the legal issues with driverless cars are resolved well enough that Uber has a viable business. 4. Given 3, Uber can successfully raise money for an incredible capital expenditure (how many cars are we talking here? 1,000,000, very conservatively? At $20,000 ea, very conservatively? So $20B investment), and then handle that kind of capital investment. 5. Given 4, build up all the supporting infrastructure for this business (parking, local cleaning, etc.) 6. Given 5, this all happens within Uber's operational runway (like, starts within 3-5 years, finishes within 10 or so)? Personally, I'd put the odds of this at: 10% for 1 * 10% for 2 * 90% for 3 * 80% for 4 * 70% for 5 * 20% for 6 = roughly 0.1%. But even if you're way more bullish on Uber than I am, can anyone really argue for more than 50% for 1 * 50% for 2 * 90% for 3 * 95% for 4 * 95% for 5 * 80% for 6? That's still only 16%.

placeybordeaux 9y ago
I think that steps 2 and 4 are the biggest questions for me, but the details about keeping the cars running & clean are also good ones. Right now Uber can externalize the costs of a running clean car. Running their own fleet will mean that stuff like gas, maintenance, cleanliness, misc stuff that 5 star uber drivers do (free candy, water etc) will no longer be externalized and bore by their drivers. P.S. did you mean bearish instead of bullish?
- aetherson 9y ago
  Nope. People who are more bullish about Uber than I rate their chance of being first-to-market with driverless car technology at higher than 10%, for example.
ghaff 9y ago
So Uber just needs to win, in a sustainable differentiated way, self-driving technology, get it incorporated into actual cars in production volumes, and roll it out as a new major national car rental company based mostly on very short-term rentals. Within, as you say, their operational runway.
wdb 9y ago
And then you have the question, if people want to be in a taxi without a driver?