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Google is going to increase or fully acquire Uber. Uber has virtually no management in place right now and I could hypothetically see that clearing being pragma

by wand3r 9y ago

Google is going to increase or fully acquire Uber. Uber has virtually no management in place right now and I could hypothetically see that clearing being pragmatic for the social reasons, but potentially part of a deal with Google for business ones. Maybe they will reach a settlement before this goes to court. This is obviously unfounded speculation but a few other points whole C suite is pretty much gone Uber is integrated into Gmaps. Currently running an existing user promo for $15 if executed through maps. Whole Uber team has apparently trained on Googles tech already so on boarding will be easier It's Googles core competency They already own a smallish percentage They seem to be focused on production, key exec was let go from Ford for wrecking a Frenemy partnership trade of AI / Tech for Ford production expertise. They have the synergy with Gmaps, much of the AI and prototyping with Waymo and they can turn around the negative sentiment. They need the network short term to ramp up whatever their play is for the future. I can see this being reasonable. Uber is a financial mess with limited upside if this case goes south and is only attractive to a few buyers. Google, already being an investor is one of they few Incs with the knowledge and capital to actually get value from this cash fire.

throwaway91111 9y ago
Doesn't waymo already have a deal to supply self driving cars to lyft? What would they get from Uber but a competing service? The brand seems like a liability in this case. Hell, if anything, i'd use this to force Uber to license the cars from Waymo, too.
- macspoofing 9y ago
  They would drop lyft. >The brand seems like a liability in this case. Cheaper to buy.
draw_down 9y ago
You guys are funny.
LeoNatan25 9y ago
With much of the sexual impropriety stories at Uber, is it really a good PR move for Google to go ahead with such acquisition?
- dragonwriter 9y ago
  > With much of the sexual impropriety stories at Uber, is it really a good PR move for Google to go ahead with such acquisition? Maybe; the problem is an HR/management one, which an acquisition in which upper management and HR are largely replaced and lower management is scrutinized under a microscope could probably resolve quickly to prevent any ongoing issues, and not keeping the Uber name in use would deal with most of the public image issues.
  - LeoNatan25 9y ago
    It's not just a problem of upper management and HR. It sounds to me like a rotten culture from the bottom up. This is not the case at Alphabet (so far as I know), so what happens when a clash of cultures hits? Usually, people that can't adapt are fired or marginalized until replaced. In such a case, is the purchase of Uber worth it or necessary?
    - dragonwriter 9y ago
      > In such a case, is the purchase of Uber worth it or necessary? The platform and existing customer and (at least in the transitional phase) driver relationships are not without value, and there's probably IP value as well (and, if they've really built on stuff stolen from or encumbered I by patents owned by Google, it's potentially uniquely valuable to Google, compared to other buyers.) So, I mean, even an “acquifire” where none of the actual people employed by Uber are retained might be worthwhile, at the right price.
    - euyyn 9y ago
      > It sounds to me like a rotten culture from the bottom up. Anecdote, but the one engineer I know that works at Uber is an ex-Googler and got a 20 when rolling for kindness.
wonder_bread 9y ago
"Google is going to increase or fully acquire Uber." Talk about a "God's View", they'd be literally begging for regulator's attention if they tried buying Uber
- CamperBob2 9y ago
  So now's the time to do it, in other words.
- dragonwriter 9y ago
  > they'd be literally begging for regulator's attention if they tried buying Uber How so? Regulatory attention of mergers isn't based on prospective dominance of markets which don't yet exist, in most jurisdictions.
  - wonder_bread 9y ago
    It would be a prospective purchase in regards to autonomous driving software but Uber holds a current dominating market share in ride-sharing. They could potentially single-handedly create fear of an information monopoly and be the impetus for the fed's to look at re-writing anti-trust. It's almost too sexy of an acquisition at a time when governments seem to be losing trust in them. I could be wrong obviously, but that would just seem like a bad idea in the long term, both for the price, and for the microscope it would put on them.
    - dragonwriter 9y ago
      > It would be a prospective purchase in regards to autonomous driving software but Uber holds a current dominating market share in ride-sharing. Do they? Specifically, do they have pricing power? Market share (even superficially dominant share) where competitors or substitute services are present and business moves in response to relative price changes isn't market power.
      - wonder_bread 9y ago
        I would argue against that, I couldn't think of anything more powerful in an industry than a company that could use it's tens of billions of dollars in operating profit annually to fund their efforts to dominate ride-sharing as well. You are making a good point, but although there is a fine line in regards to its prospective market power until they can make it profitable and sustain it afterward, I don't see how this doesn't lead to bad things for them down the road even if it something like this did get approval
joe_the_user 9y ago
How would Google deal with Uber's massively inflated $69 billion valuation? Would investors who bought shares be compensated with pennies on the dollar? Would some investors get more than others? What motivates people to put in money at these absurd valuations? The hope that they'll come true just some of the time?
- resf 9y ago
  Uber shareholders may find pennies on the dollar to be preferable to bankruptcy.
- jandrese 9y ago
  Let them be sued into bankruptcy and then pick up the pieces afterward?
- bduerst 9y ago
  If Uber is like the other unicorn companies, the investors that gave it the massive valuation have shareholder agreements that allow them to get paid before everyone else does. Anyone with common shares (e.g. employees, etc.) would get virtually nothing.
  - mi100hael 9y ago
    Would suck big time but also be entirely predictable for employees with options/golden-handcuffs who end up with nothing.
  - joe_the_user 9y ago
    And if there have been multiple rounds at multiple valuations, then multiple agreements and/or complex negotiations. It seems logical that the principle is that the outside world just isn't going to know the ratio of optimism to desperation in a high valuation - since saying "You're buy at a high valuation" is equally saying you "get the money for a low valuation first".
- vm 9y ago
  The investors don't control the company. Only the board does. Sometimes that includes investors but it definitely doesn't control all of them. The board is required to do what's best for ALL shareholders, even if that means lower returns for some of them. Uber raised $9B (1). Presumably this is all preferred stock or convertible debt, which is paid out 100% in an acquisition. That means investors only lose money and if Uber is acquired for under $9B. Over $9B, then investors and common shareholders splits the proceeds according to their ownership (2). I'm simplifying as the liquidation preference matters based on the different valuations that investors paid. For example, if Uber is acquired for $30B, then all the investors who paid above that valuation, would get their money back first. Then remaining investors and common shareholders would get their % split of the remaining pool of capital. 1) https://www.crunchbase.com/organization/uber#/entity https://www.crunchbase.com/organization/uber#/entity 2)Usually this is how it works, but sometimes the terms vary.
zitterbewegung 9y ago
Or, Google could do nothing and let Uber fail. Lyft would probably pick out the good employees. All of the drivers would just stop using the Uber app since many use both or could easily switch. The C suite would be gone by this point. At this point once self driving tech is perfected Lyft would just buy it from Google.
- lacksconfidence 9y ago
  comparing https://www.lyft.com/cities https://www.lyft.com/cities to https://www.uber.com/cities/ https://www.uber.com/cities/ it seems like there is a huge discrepancy between the cities that have lyft and those that have uber. Uber has a significant international availability.
  - euyyn 9y ago
    I'm wondering, what prevents Lyft from just starting to operate in all the cities Uber already operates in? Does Uber reach individual deals with the cities to get permits?
    - pm90 9y ago
      It might be more of a support thing, although I would love to hear an answer from someone who knows more about this.
    - abvdasker 9y ago
      There are a few reasons this is hard. 1) I'd imagine there are significant costs to entering a new city. Uber is a two-sided marketplace so in any new city Uber needs to invest resources and time into acquiring supply/drivers and to a lesser extent users. Combine this with the operational support to maintain that marketplace and the overhead becomes non-negligible. 2) First mover advantage is a real thing so any ride-sharing network that enters a city with an established player is going to have a harder time acquiring the aforementioned supply/demand. 3) When more than one ride-sharing company is in a city it eventually turns into a subsidy war for demand. From what I have read this is what happened to Uber competing with Didi in China and resulted in massive losses for both companies. TL;DR entering new markets is in fact pretty expensive, and far more so when there is existing competition.
pm90 9y ago
Meh, why would they? Better buy would be Lyft, and then just pour money and crush Uber completely.
- dragonwriter 9y ago
  > Meh, why would they? I think the suggestion is based on an anticipated Uber firesale price resulting from its recent legal and HR issues.
frahs 9y ago
Waymo has a partnership with lyft right now, so that would be pretty tricky
askafriend 9y ago
Uber relies on Google Maps for now, but they are building out their own mapping solution in increasingly more countries and have reportedly made huge investments in mapping. https://www.theverge.com/2016/7/31/12338268/uber-maps-investment-500-million https://www.theverge.com/2016/7/31/12338268/uber-maps-invest...
- yellow_postit 9y ago
  Uber applies some ridiculous optimizations to their map and routing often times ending a trip while in blocks away from where I need to be and leaving a confused driver (and frustrated passenger). Lyft never has this issue.
fooey 9y ago
Seems like Uber's wanton disregard for law makes them a gigantic liability bomb that no big company is going to want to acquire.
jaypaulynice 9y ago
With GV being an investor in Uber, the whole lawsuit seems very weird. Any GV partners on Uber's board? How did they not know? I'm not sure Google wants to manage a large network of freelancers/drivers without benefits. Would look terrible when the software engineers have all the benefits...then again they could offer benefits for drivers... I think Facebook or Apple (maybe Amazon) might want a piece of the pie. The integration would be seamless...then again who knows!
deleted 9y ago
[deleted]

by wand3r 9y ago

throwaway91111 9y ago

Doesn't waymo already have a deal to supply self driving cars to lyft? What would they get from Uber but a competing service? The brand seems like a liability in this case. Hell, if anything, i'd use this to force Uber to license the cars from Waymo, too.

macspoofing 9y ago
They would drop lyft. >The brand seems like a liability in this case. Cheaper to buy.

draw_down 9y ago

You guys are funny.

LeoNatan25 9y ago

With much of the sexual impropriety stories at Uber, is it really a good PR move for Google to go ahead with such acquisition?

dragonwriter 9y ago
> With much of the sexual impropriety stories at Uber, is it really a good PR move for Google to go ahead with such acquisition? Maybe; the problem is an HR/management one, which an acquisition in which upper management and HR are largely replaced and lower management is scrutinized under a microscope could probably resolve quickly to prevent any ongoing issues, and not keeping the Uber name in use would deal with most of the public image issues.
- LeoNatan25 9y ago
  It's not just a problem of upper management and HR. It sounds to me like a rotten culture from the bottom up. This is not the case at Alphabet (so far as I know), so what happens when a clash of cultures hits? Usually, people that can't adapt are fired or marginalized until replaced. In such a case, is the purchase of Uber worth it or necessary?
  - dragonwriter 9y ago
    > In such a case, is the purchase of Uber worth it or necessary? The platform and existing customer and (at least in the transitional phase) driver relationships are not without value, and there's probably IP value as well (and, if they've really built on stuff stolen from or encumbered I by patents owned by Google, it's potentially uniquely valuable to Google, compared to other buyers.) So, I mean, even an “acquifire” where none of the actual people employed by Uber are retained might be worthwhile, at the right price.
  - euyyn 9y ago
    > It sounds to me like a rotten culture from the bottom up. Anecdote, but the one engineer I know that works at Uber is an ex-Googler and got a 20 when rolling for kindness.

wonder_bread 9y ago

"Google is going to increase or fully acquire Uber." Talk about a "God's View", they'd be literally begging for regulator's attention if they tried buying Uber

CamperBob2 9y ago
So now's the time to do it, in other words.
dragonwriter 9y ago
> they'd be literally begging for regulator's attention if they tried buying Uber How so? Regulatory attention of mergers isn't based on prospective dominance of markets which don't yet exist, in most jurisdictions.
- wonder_bread 9y ago
  It would be a prospective purchase in regards to autonomous driving software but Uber holds a current dominating market share in ride-sharing. They could potentially single-handedly create fear of an information monopoly and be the impetus for the fed's to look at re-writing anti-trust. It's almost too sexy of an acquisition at a time when governments seem to be losing trust in them. I could be wrong obviously, but that would just seem like a bad idea in the long term, both for the price, and for the microscope it would put on them.
  - dragonwriter 9y ago
    > It would be a prospective purchase in regards to autonomous driving software but Uber holds a current dominating market share in ride-sharing. Do they? Specifically, do they have pricing power? Market share (even superficially dominant share) where competitors or substitute services are present and business moves in response to relative price changes isn't market power.
    - wonder_bread 9y ago
      I would argue against that, I couldn't think of anything more powerful in an industry than a company that could use it's tens of billions of dollars in operating profit annually to fund their efforts to dominate ride-sharing as well. You are making a good point, but although there is a fine line in regards to its prospective market power until they can make it profitable and sustain it afterward, I don't see how this doesn't lead to bad things for them down the road even if it something like this did get approval

joe_the_user 9y ago

How would Google deal with Uber's massively inflated $69 billion valuation? Would investors who bought shares be compensated with pennies on the dollar? Would some investors get more than others? What motivates people to put in money at these absurd valuations? The hope that they'll come true just some of the time?

resf 9y ago
Uber shareholders may find pennies on the dollar to be preferable to bankruptcy.
jandrese 9y ago
Let them be sued into bankruptcy and then pick up the pieces afterward?
bduerst 9y ago
If Uber is like the other unicorn companies, the investors that gave it the massive valuation have shareholder agreements that allow them to get paid before everyone else does. Anyone with common shares (e.g. employees, etc.) would get virtually nothing.
- mi100hael 9y ago
  Would suck big time but also be entirely predictable for employees with options/golden-handcuffs who end up with nothing.
- joe_the_user 9y ago
  And if there have been multiple rounds at multiple valuations, then multiple agreements and/or complex negotiations. It seems logical that the principle is that the outside world just isn't going to know the ratio of optimism to desperation in a high valuation - since saying "You're buy at a high valuation" is equally saying you "get the money for a low valuation first".
vm 9y ago
The investors don't control the company. Only the board does. Sometimes that includes investors but it definitely doesn't control all of them. The board is required to do what's best for ALL shareholders, even if that means lower returns for some of them. Uber raised $9B (1). Presumably this is all preferred stock or convertible debt, which is paid out 100% in an acquisition. That means investors only lose money and if Uber is acquired for under $9B. Over $9B, then investors and common shareholders splits the proceeds according to their ownership (2). I'm simplifying as the liquidation preference matters based on the different valuations that investors paid. For example, if Uber is acquired for $30B, then all the investors who paid above that valuation, would get their money back first. Then remaining investors and common shareholders would get their % split of the remaining pool of capital. 1) https://www.crunchbase.com/organization/uber#/entity https://www.crunchbase.com/organization/uber#/entity 2)Usually this is how it works, but sometimes the terms vary.

zitterbewegung 9y ago

Or, Google could do nothing and let Uber fail. Lyft would probably pick out the good employees. All of the drivers would just stop using the Uber app since many use both or could easily switch. The C suite would be gone by this point. At this point once self driving tech is perfected Lyft would just buy it from Google.

lacksconfidence 9y ago
comparing https://www.lyft.com/cities https://www.lyft.com/cities to https://www.uber.com/cities/ https://www.uber.com/cities/ it seems like there is a huge discrepancy between the cities that have lyft and those that have uber. Uber has a significant international availability.
- euyyn 9y ago
  I'm wondering, what prevents Lyft from just starting to operate in all the cities Uber already operates in? Does Uber reach individual deals with the cities to get permits?
  - pm90 9y ago
    It might be more of a support thing, although I would love to hear an answer from someone who knows more about this.
  - abvdasker 9y ago
    There are a few reasons this is hard. 1) I'd imagine there are significant costs to entering a new city. Uber is a two-sided marketplace so in any new city Uber needs to invest resources and time into acquiring supply/drivers and to a lesser extent users. Combine this with the operational support to maintain that marketplace and the overhead becomes non-negligible. 2) First mover advantage is a real thing so any ride-sharing network that enters a city with an established player is going to have a harder time acquiring the aforementioned supply/demand. 3) When more than one ride-sharing company is in a city it eventually turns into a subsidy war for demand. From what I have read this is what happened to Uber competing with Didi in China and resulted in massive losses for both companies. TL;DR entering new markets is in fact pretty expensive, and far more so when there is existing competition.

pm90 9y ago

Meh, why would they? Better buy would be Lyft, and then just pour money and crush Uber completely.

dragonwriter 9y ago
> Meh, why would they? I think the suggestion is based on an anticipated Uber firesale price resulting from its recent legal and HR issues.

frahs 9y ago

Waymo has a partnership with lyft right now, so that would be pretty tricky

askafriend 9y ago

Uber relies on Google Maps for now, but they are building out their own mapping solution in increasingly more countries and have reportedly made huge investments in mapping. https://www.theverge.com/2016/7/31/12338268/uber-maps-investment-500-million https://www.theverge.com/2016/7/31/12338268/uber-maps-invest...

yellow_postit 9y ago
Uber applies some ridiculous optimizations to their map and routing often times ending a trip while in blocks away from where I need to be and leaving a confused driver (and frustrated passenger). Lyft never has this issue.

fooey 9y ago

Seems like Uber's wanton disregard for law makes them a gigantic liability bomb that no big company is going to want to acquire.

jaypaulynice 9y ago

With GV being an investor in Uber, the whole lawsuit seems very weird. Any GV partners on Uber's board? How did they not know? I'm not sure Google wants to manage a large network of freelancers/drivers without benefits. Would look terrible when the software engineers have all the benefits...then again they could offer benefits for drivers... I think Facebook or Apple (maybe Amazon) might want a piece of the pie. The integration would be seamless...then again who knows!

deleted 9y ago

[deleted]