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Interesting. I feel like there is no way Uber would be on the brink of bankruptcy and not be able to fundamentally change the problems that have persisted so fa

Interesting. I feel like there is no way Uber would be on the brink of bankruptcy and not be able to fundamentally change the problems that have persisted so far. I guess what I'm getting at is that a company valued at 69 billion dollars going out of business in less than 2 years should be a surprise to everyone.

goobynight 9y ago
Would they run the coffers dry though? The answer might be yes and I'd go with yes, but if they're for some reason on what they see as a death spiral, they could return some investor money and call it quits.
- htormey 9y ago
  Agreed. I imagine a more likely scenario is they slam on the breaks by raising prices and firing a bunch of people before they run out of money. This of course would tank the companies valuation and result in a big decline in ride traffic. I'd be really surprised to see uber completely go away. I think the worst case scenario would be for them to go public and have their valuation impload, I.e a groupon like outcome.
ianamartin 9y ago
A company fueled entirely by venture capital that has no proven ability to make a profit, valued at 69 billion dollars should be a surprise to everyone.
mikeg8 9y ago
The surprise to me is the craziness of that valuation to begin with. And if they were able to make "fundamental changes", why wouldn't they have done it by now? Seems like the path to change will be more difficult with the loss of top execs, low internal morale, and difficulty hiring top talent moving forward. Maybe out of business in 2 years is agressive, but 5 years? Wouldn't surprise me at all.
- bigbugbag 9y ago
  Valuation is bullshit. When this bubble will burst a few trillion will go poof and the cycle will start over. 60+ billions valuation for a company losing over 2 billions a year or one third of their total revenue, seems like a big pile of horse manure.
ridgeguy 9y ago
Valuation differs from cash in the bank. Uber could be valued at a gazillion $, but if it can't make payroll in 90 days, it's got a problem that would be tough to fix, given the apparent lack of a profitable business model.
- paulddraper 9y ago
  Sure, but they could sell 1% of their company (loans, equity) and have one percent of a gazillion dollars.
  - pyromine 9y ago
    The money doesn't roll in ad infinium
  - TheCoelacanth 9y ago
    Only if someone is actually willing to buy part of the company. The last person valuing it at a gazillion dollars doesn't mean that the next person will value it at a gazillion dollars.
    - paulddraper 9y ago
      Right. The point being, the first person was wrong.
- tim333 9y ago
  The recent figure for what it's worth (end 2016): revenue $6.5 billion losses excluding China $2.8 bn $7 billion of cash on hand, along with an untapped $2.3 billion credit facility (bloomberg) So they are not going bust tomorrow but whether they can build a real business from that is quite questionable.
  - bduerst 9y ago
    At $2.8 B annual run rate, they'll be out of cash around 2018/2019, depending on their credit.
bigbugbag 9y ago
It would only a surprise to people who may believe that companies are worth what they're valued, people who do not understand that investments are bets. Ever heard of bubbles ? Well they inflate until they burst in a poof where a few trillions disappear. Remember the dot com bubble bursting at the beginning of the 2000's ? Expect something similar in a not so distant future as the bubble cycle repeats itself. So yes a 69 billion dollars market valuation for a company does not mean anything other than investors made a bet this company would somehow pay them back their money plus extra at some point.

goobynight 9y ago

Would they run the coffers dry though? The answer might be yes and I'd go with yes, but if they're for some reason on what they see as a death spiral, they could return some investor money and call it quits.

htormey 9y ago
Agreed. I imagine a more likely scenario is they slam on the breaks by raising prices and firing a bunch of people before they run out of money. This of course would tank the companies valuation and result in a big decline in ride traffic. I'd be really surprised to see uber completely go away. I think the worst case scenario would be for them to go public and have their valuation impload, I.e a groupon like outcome.

ianamartin 9y ago

A company fueled entirely by venture capital that has no proven ability to make a profit, valued at 69 billion dollars should be a surprise to everyone.

mikeg8 9y ago

The surprise to me is the craziness of that valuation to begin with. And if they were able to make "fundamental changes", why wouldn't they have done it by now? Seems like the path to change will be more difficult with the loss of top execs, low internal morale, and difficulty hiring top talent moving forward. Maybe out of business in 2 years is agressive, but 5 years? Wouldn't surprise me at all.

bigbugbag 9y ago
Valuation is bullshit. When this bubble will burst a few trillion will go poof and the cycle will start over. 60+ billions valuation for a company losing over 2 billions a year or one third of their total revenue, seems like a big pile of horse manure.

ridgeguy 9y ago

Valuation differs from cash in the bank. Uber could be valued at a gazillion $, but if it can't make payroll in 90 days, it's got a problem that would be tough to fix, given the apparent lack of a profitable business model.

paulddraper 9y ago
Sure, but they could sell 1% of their company (loans, equity) and have one percent of a gazillion dollars.
- pyromine 9y ago
  The money doesn't roll in ad infinium
- TheCoelacanth 9y ago
  Only if someone is actually willing to buy part of the company. The last person valuing it at a gazillion dollars doesn't mean that the next person will value it at a gazillion dollars.
  - paulddraper 9y ago
    Right. The point being, the first person was wrong.
tim333 9y ago
The recent figure for what it's worth (end 2016): revenue $6.5 billion losses excluding China $2.8 bn $7 billion of cash on hand, along with an untapped $2.3 billion credit facility (bloomberg) So they are not going bust tomorrow but whether they can build a real business from that is quite questionable.
- bduerst 9y ago
  At $2.8 B annual run rate, they'll be out of cash around 2018/2019, depending on their credit.

bigbugbag 9y ago

It would only a surprise to people who may believe that companies are worth what they're valued, people who do not understand that investments are bets. Ever heard of bubbles ? Well they inflate until they burst in a poof where a few trillions disappear. Remember the dot com bubble bursting at the beginning of the 2000's ? Expect something similar in a not so distant future as the bubble cycle repeats itself. So yes a 69 billion dollars market valuation for a company does not mean anything other than investors made a bet this company would somehow pay them back their money plus extra at some point.