8 ms·

Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;) I think this is more about $

by indescions_2017 9y ago

Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;) I think this is more about $UBER IPO. Stabilize the ship, smooth relations with investors, and start shopping to underwriters. Expect to see road show by Q2 2018.

askafriend 9y ago
This is spot-on, in my opinion. All they need is someone who is demonstrably competent and experienced to stabilize the ship and steer it towards an IPO. There's no need for the candidate to be a visionary or meddle drastically with something that's already working extraordinarily well. That part is largely done - the Uber machine is mature and chugging along. A seasoned operator needs to come in to provide PR cover, put in some basic organizational guardrails and rebuild the executive ranks to get the company IPO ready. Hiring a CFO is probably top priority as well as getting PR back on track. Those two moves alone would suppress external distractions and start the IPO process by having someone working on it full-time (CFO). Let's see if Dara can pull this off.
- sillysaurus3 9y ago
  I think this is exactly how Uber will fade into irrelevance. Think about it: We're bringing in a money guy to "stabilize the ship." When the opposite of "rock the boat" is in power, don't be surprised if you get an irrelevant cruise ship. They run out of money soon, and nothing will change that short of a mass layoff or raising their prices above taxis. Then what? They needed that autonomous driving tech. And I don't see a money guy pulling that off. Remember how Marissa Meyer turned out? People ended up saying "Well, nothing could've saved Yahoo." But you could've said the same thing about Apple at its nadir. Same with Uber. Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. So how certain are you that it was a good idea to kick the founder in exchange for a money guy? Given those options, I'd bet on the unpopular founder every time.
  - ghaff 9y ago
    Autonomous driving in the sense of door-to-door taxis is not going to happen in a timeframe remotely relevant to companies like Uber. Maybe in a few decades. Uber needs someone not betting on that.
    - sillysaurus3 9y ago
      Maybe not, but it has the virtue of being their only chance of not running out of money in the next few years.
      - davidcbc 9y ago
        Unless a competent CEO comes along with a plan that is better than betting the companies existence on solving autonomous vehicles in the next two years they are going to run out of money either way. If Uber wants to be a player in autonomous vehicles they have to become profitable enough to survive long enough to realize that goal. Kalanick's plan was always a pipe dream. Driverless cars just aren't going to be ready in time.
      - godzillabrennus 9y ago
        How long did Amazon float by on potential while running at a loss? Companies can raise funds if people think it'll succeed.
        greglindahl 9y ago
        Amazon is still mainly valued on projected earnings after 2020 -- the only recent change is that they went from steadily losing money to slightly making money. But the money that they're making now does not justify their stock price.
        thanksgiving 9y ago
        My impression was that Amazon does make plenty of revenue — it is just that all of the "profits" simply gets reinvested into Amazon? Is that too naïve? My thought was, hey they found something useful to do with that money. (Funny how I don't see Twitter that way. I think they could/ should cut their spending by something like $1B a year.) I'm of course comparing Amazon to apple which makes so much money that they can afford to keep it "cash" as opposed to reinvesting.
- wpietri 9y ago
  This would make sense to me if they had a decent business. But they are currently losing money hand over fist [1]. If they stabilize as is, they don't look like a good IPO target to me. The median amount taken in by an IPO in 2016 is $94.5 million [2], which would cover less than 2 weeks of Uber losses at their current burn rate. (Surely their IPO won't be the median size. E.g., Facebook's brought in $16 billion. But at that point, Facebook had been in the black for 3 years and their profit for their last full year was a billion dollars.) Can they raise rates enough to get to break even before IPO? Maybe. But that would drastically reduce pressure on their competitors. Lyft is growing fast. Uber can really only justify their current valuation if they end up with no real competitors and can extract monopoly rents. So I think their CEO needs to do a lot more than stabilize things. They either need to find a way to make the current business work much better (something I'm skeptical exists) or to drastically change the business to one where they have more of a moat. My guess, though, is that they have run out of "greater fools" [3], and that the public market would realize that Uber, at least as currently constituted, is not a high-margin tech company but a low-margin discount taxi dispatch company. [1] https://www.axios.com/exclusive-uber-financials-2475912645.html https://www.axios.com/exclusive-uber-financials-2475912645.h... [2] https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/2017-WilmerHale-IPO-Report.pdf https://www.wilmerhale.com/uploadedFiles/Shared_Content/Edit... https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory
throwaway2048 9y ago
What if it isn't heading that way, what if thats mostly just hype? I think its easy to be smug and pretend to know whats going to happen, but if predicting trends was so easy, nobody would ever be suprised by anything. There are a lot of indicators that driverless cars arnt comming any time soon, and it seems like one of the few things that would work as a get out of jail free card for uber. In any case, a market that is (supposedly) about to be rocked by major techtonic shifts is no place to make "sure bets" about the future.
Silhouette 9y ago
Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;) I'm sure big names such as Uber and Tesla are hoping for that outcome. Personally, I'll believe it when I see it. For now, both autonomous and electric vehicles are still looking like technologies with great PR videos but also quite a few fundamental problems with no credible solutions yet. I wouldn't be surprised if Uber was aiming for a big IPO before too much of that reality invades those PR videos, particularly if the financial foundations of their current business model are as shaky as some reports have suggested.
- sah2ed 9y ago
  I think Musk realizes that electric cars will be a commodity which will lead to razor-thin margins. The one thing that's not yet a commodity, and will not be for a while, is lithum-ion battery tech which is why they are building the gigafactory to cement their place as near sole supplier to the rest of the industry when they eventually catch up with selling all-electric drive trains.
  - maxerickson 9y ago
    Tesla is going to consume the entire output of the gigafactory and build also more battery factories. And there are already examples of other companies making lots of batteries. LG is making them for the Bolt.
mrobins 9y ago
Even if that's the only way it could be headed (and I think there's lots of room for variation) - The correct path for Uber for the next few years and through an IPO is hardly a given. They're currently far and away the market leader but that's a dangerous place to be. Lots of people want them to fail - both for competitive reasons and because they just hate the evil guy at the top. Competition (backed by huge names like GM) is healthy in some markets for both riders and drivers, and they haven't been able to make a go of it in others. On top of that the autonomous space alone is going to be a war zone for the next decade and casualties will happen.
dalbasal 9y ago
IMO, it's almost best to ignore that. Transport may be going autonomous, but it isn't there yet. It won't be affected until full autonomy goes live, and the network of drivers becomes obsolete. It will be 5, 10, 15 years before technology, laws, etc. are mature enough. Meanwhile, uber needs to be the dominant ride-sharing service. That might be even harder if they're being too clever and thinking beyond the next couple of years.

askafriend 9y ago

This is spot-on, in my opinion. All they need is someone who is demonstrably competent and experienced to stabilize the ship and steer it towards an IPO. There's no need for the candidate to be a visionary or meddle drastically with something that's already working extraordinarily well. That part is largely done - the Uber machine is mature and chugging along. A seasoned operator needs to come in to provide PR cover, put in some basic organizational guardrails and rebuild the executive ranks to get the company IPO ready. Hiring a CFO is probably top priority as well as getting PR back on track. Those two moves alone would suppress external distractions and start the IPO process by having someone working on it full-time (CFO). Let's see if Dara can pull this off.

sillysaurus3 9y ago
I think this is exactly how Uber will fade into irrelevance. Think about it: We're bringing in a money guy to "stabilize the ship." When the opposite of "rock the boat" is in power, don't be surprised if you get an irrelevant cruise ship. They run out of money soon, and nothing will change that short of a mass layoff or raising their prices above taxis. Then what? They needed that autonomous driving tech. And I don't see a money guy pulling that off. Remember how Marissa Meyer turned out? People ended up saying "Well, nothing could've saved Yahoo." But you could've said the same thing about Apple at its nadir. Same with Uber. Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. So how certain are you that it was a good idea to kick the founder in exchange for a money guy? Given those options, I'd bet on the unpopular founder every time.
- ghaff 9y ago
  Autonomous driving in the sense of door-to-door taxis is not going to happen in a timeframe remotely relevant to companies like Uber. Maybe in a few decades. Uber needs someone not betting on that.
  - sillysaurus3 9y ago
    Maybe not, but it has the virtue of being their only chance of not running out of money in the next few years.
    - davidcbc 9y ago
      Unless a competent CEO comes along with a plan that is better than betting the companies existence on solving autonomous vehicles in the next two years they are going to run out of money either way. If Uber wants to be a player in autonomous vehicles they have to become profitable enough to survive long enough to realize that goal. Kalanick's plan was always a pipe dream. Driverless cars just aren't going to be ready in time.
    - godzillabrennus 9y ago
      How long did Amazon float by on potential while running at a loss? Companies can raise funds if people think it'll succeed.
      - greglindahl 9y ago
        Amazon is still mainly valued on projected earnings after 2020 -- the only recent change is that they went from steadily losing money to slightly making money. But the money that they're making now does not justify their stock price.
        thanksgiving 9y ago
        My impression was that Amazon does make plenty of revenue — it is just that all of the "profits" simply gets reinvested into Amazon? Is that too naïve? My thought was, hey they found something useful to do with that money. (Funny how I don't see Twitter that way. I think they could/ should cut their spending by something like $1B a year.) I'm of course comparing Amazon to apple which makes so much money that they can afford to keep it "cash" as opposed to reinvesting.
wpietri 9y ago
This would make sense to me if they had a decent business. But they are currently losing money hand over fist [1]. If they stabilize as is, they don't look like a good IPO target to me. The median amount taken in by an IPO in 2016 is $94.5 million [2], which would cover less than 2 weeks of Uber losses at their current burn rate. (Surely their IPO won't be the median size. E.g., Facebook's brought in $16 billion. But at that point, Facebook had been in the black for 3 years and their profit for their last full year was a billion dollars.) Can they raise rates enough to get to break even before IPO? Maybe. But that would drastically reduce pressure on their competitors. Lyft is growing fast. Uber can really only justify their current valuation if they end up with no real competitors and can extract monopoly rents. So I think their CEO needs to do a lot more than stabilize things. They either need to find a way to make the current business work much better (something I'm skeptical exists) or to drastically change the business to one where they have more of a moat. My guess, though, is that they have run out of "greater fools" [3], and that the public market would realize that Uber, at least as currently constituted, is not a high-margin tech company but a low-margin discount taxi dispatch company. [1] https://www.axios.com/exclusive-uber-financials-2475912645.html https://www.axios.com/exclusive-uber-financials-2475912645.h... [2] https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/2017-WilmerHale-IPO-Report.pdf https://www.wilmerhale.com/uploadedFiles/Shared_Content/Edit... https://en.wikipedia.org/wiki/Greater_fool_theory https://en.wikipedia.org/wiki/Greater_fool_theory

throwaway2048 9y ago

What if it isn't heading that way, what if thats mostly just hype? I think its easy to be smug and pretend to know whats going to happen, but if predicting trends was so easy, nobody would ever be suprised by anything. There are a lot of indicators that driverless cars arnt comming any time soon, and it seems like one of the few things that would work as a get out of jail free card for uber. In any case, a market that is (supposedly) about to be rocked by major techtonic shifts is no place to make "sure bets" about the future.

Silhouette 9y ago

Pretty sure even my grandma knows where the transportation sector is headed: electric, autonomous, sharing, services based, etc ;) I'm sure big names such as Uber and Tesla are hoping for that outcome. Personally, I'll believe it when I see it. For now, both autonomous and electric vehicles are still looking like technologies with great PR videos but also quite a few fundamental problems with no credible solutions yet. I wouldn't be surprised if Uber was aiming for a big IPO before too much of that reality invades those PR videos, particularly if the financial foundations of their current business model are as shaky as some reports have suggested.

sah2ed 9y ago
I think Musk realizes that electric cars will be a commodity which will lead to razor-thin margins. The one thing that's not yet a commodity, and will not be for a while, is lithum-ion battery tech which is why they are building the gigafactory to cement their place as near sole supplier to the rest of the industry when they eventually catch up with selling all-electric drive trains.
- maxerickson 9y ago
  Tesla is going to consume the entire output of the gigafactory and build also more battery factories. And there are already examples of other companies making lots of batteries. LG is making them for the Bolt.

mrobins 9y ago

Even if that's the only way it could be headed (and I think there's lots of room for variation) - The correct path for Uber for the next few years and through an IPO is hardly a given. They're currently far and away the market leader but that's a dangerous place to be. Lots of people want them to fail - both for competitive reasons and because they just hate the evil guy at the top. Competition (backed by huge names like GM) is healthy in some markets for both riders and drivers, and they haven't been able to make a go of it in others. On top of that the autonomous space alone is going to be a war zone for the next decade and casualties will happen.

dalbasal 9y ago

IMO, it's almost best to ignore that. Transport may be going autonomous, but it isn't there yet. It won't be affected until full autonomy goes live, and the network of drivers becomes obsolete. It will be 5, 10, 15 years before technology, laws, etc. are mature enough. Meanwhile, uber needs to be the dominant ride-sharing service. That might be even harder if they're being too clever and thinking beyond the next couple of years.