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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

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
  Talk about biased numbers and interpretation. Revenue is growing but losses are growing too, so revenue is not growing fast enough. 7 billions of cash means Uber will be broke in less than two years depending how much faster losses are growing compared to revenue. Investors might become hesitant until they know where the lawsuit with google is going. My interpretation is that, unless Uber finds a way to reverse steam and become profitable they are still around today but are on the way out and might be gone tomorrow.
martinald 9y ago
Yes, and even worse the 'auxiliary' services business seems to be doing very badly and is adding to cash burn, instead of increasing utilisation of their existing fleet. UberEats for example is completely dying a death in London (this may be different for other markets). Speaking to a few restaurant chain owners they get virtually no orders through and the experience is terrible, because drivers get lost and the food gets cold. They then blame the restaurant and leave loads of bad reviews everywhere. I genuinely think Uber has very limited network effects. The driver fleet can drive for other companies at the same time, the user will just use the app that is cheapest/works the best/has the best service. I don't see enormous stickiness there, and the other services they offer don't work well IMO. nb. why on earth is ubereats a seperate app, for example? It should be in the same app.

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
Talk about biased numbers and interpretation. Revenue is growing but losses are growing too, so revenue is not growing fast enough. 7 billions of cash means Uber will be broke in less than two years depending how much faster losses are growing compared to revenue. Investors might become hesitant until they know where the lawsuit with google is going. My interpretation is that, unless Uber finds a way to reverse steam and become profitable they are still around today but are on the way out and might be gone tomorrow.

martinald 9y ago

Yes, and even worse the 'auxiliary' services business seems to be doing very badly and is adding to cash burn, instead of increasing utilisation of their existing fleet. UberEats for example is completely dying a death in London (this may be different for other markets). Speaking to a few restaurant chain owners they get virtually no orders through and the experience is terrible, because drivers get lost and the food gets cold. They then blame the restaurant and leave loads of bad reviews everywhere. I genuinely think Uber has very limited network effects. The driver fleet can drive for other companies at the same time, the user will just use the app that is cheapest/works the best/has the best service. I don't see enormous stickiness there, and the other services they offer don't work well IMO. nb. why on earth is ubereats a seperate app, for example? It should be in the same app.