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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

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.
        tim333 9y ago
        Indeed Amazon has never needed much funding. Crunchbase showed their most recent raise as being $100m in 2001. Uber is very different. Their burn was $991m in Q4 2016 and growing.
        lorenzorhoades 9y ago
        Once the company goes public, the amount of money they raised is included in their finances, and not counted as a round. Take a look at the Amazon finances and you'll see how much they have raised on loans. The higher the stock price, the better loan pricing they can secure. This is the strategy that Tesla employs as well.
    - TheCoelacanth 9y ago
      Amazon never burned through multiple billions of dollars a year.
AndrewKemendo 9y ago
Why do people keep bringing this up? Mayer did exactly what she was brought into do: increase the value of the stock to make an exit out of a failure. "The real winner here is Yahoo, which is receiving far more value for this asset than it is worth and has also managed to halve its exposure to liabilities that it should be fully on the hook for. ... It is not difficult to still see upside in the Yahoo share price. Marissa Mayer may have been terrible at executing on a digital ecosystem, but she seems to be a great salesperson." [1] http://www.investors.com/news/technology/yahoo-marissa-mayer-took-verizon-to-the-cleaners-edison-research/ http://www.investors.com/news/technology/yahoo-marissa-mayer...
- sillysaurus3 9y ago
  Because Yahoo faded into irrelevancy. If you want Uber to rise in value for a short time, Khosrowshahi seems like an excellent bet. I wonder who Uber will cede their throne to? Lyft? You could argue that the damage was done, that Kalanick screwed up the company so badly that nothing could save it at this point, so you may as well try to cannibalize it for value. But the best investors know better. Let it sink in: they're going to run out of money. What then?
  - roskilli 9y ago
    If you look at the numbers I have to say that's a little bit silly to say. They have $6.6 bill cash on hand, they are burning ~$2.5 bill per year, although quarter to quarter net loss fell 9% last quarter. They very likely have 2 years, likely more, to start making profits each quarter. If they really need to jettison more expensive parts of the business they can sell off their autonomous unit and their VTOL investments, along with a ton of other fat they can trim. Your viewpoint does not seem connected with reality IMHO.
    - sillysaurus3 9y ago
      We'll find out. That's two years to turn a 2.5B burn rate into profits. I wonder what Dara will do? Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet. Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.
rodgerd 9y ago
> I think this is exactly how Uber will fade into irrelevance. Like Amazon? Because they used to break rules left, right, and centre. Their competitive advantage, in their early years, was ignoring tax law. The difference was that Bezos was smart enough to hedge against the day he'd have to comply, and to diversify.
- ghaff 9y ago
  > was ignoring tax law Most online/catalog companies don't collect sales tax and leave it up to buyers to pay usage tax [which is legal absent a physical nexus https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota]. This remains the case. Amazon just got pressured into collecting because they're so big and have affiliate sales programs.
  - greglindahl 9y ago
    The way Amazon was ignoring tax law was that they operated warehouses in states while claiming that they had no physical nexus in them, by using shell companies.
    - ghaff 9y ago
      I may be wrong but as I remember it, the dispute was over whether affiliates constituted a physical presence. They collected where they had actual warehouses.
      - greglindahl 9y ago
        There was an additional dispute about affiliates. The tax dispute over warehouses went through several iterations.
geofft 9y ago
> Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. And Lyft got to where it is with no Kalanick. (... actually, does anyone know off the top of their heads, besides Lyft and maybe Uber employees, who founded Lyft and whether they're still in charge?) The myth of the founder-hero who is the only person who can run a company usually has little evidence in its favor, but in this case it has explicit evidence against it. Lyft as a service is basically indistinguishable from Uber in markets where it serves both, possibly slightly better. And if Lyft acquires Uber, the two services get to stop competing on price, buying them plenty of time to figure out the self-driving tech (which, I agree, they need), and the combined company will succeed easily, no Kalanick needed. (Also, I think "unpopular" is a pretty low-information description of why Kalanick got forced out. It could mean anything from "people on the internet don't like them" to "regulators don't like them" to "investors don't like them" to "employees don't like them," each of which have very different impacts on the company, and comparing an unpopular founder in one sense to another company's unpopular founder in another sense may not be meaningful.)
- stephenhck 9y ago
  I think you're overlooking a huge difference in your argument against "the myth of the founder-hero": Lyft benefited tremendously from Uber pushing into new markets / cities first. Uber and tk had a huge impact on making ride share legal, and Lyft never had to deal with that (or not nearly as much). Also, how would Lyft ever buy Uber? Even if Uber and Lyft get 50/50 market share, which I think is impossible, you need to be way larger to buy out another company.
  - malandrew 9y ago
    This. Kalanick is as much Lyft's founder as Uber's founder. Without Kalanick, Lyft would be a tiny fraction of its current size and available only in a few markets.
  - sah2ed 9y ago
    In the tech industry, the pioneers are usually the ones with arrows in their backs. You are absolutely right that the TK/Uber combo going head-on against existing laws is what made ride hailing a reality for millions of consumers, but unless the pioneer has an air tight go-to market strategy to create and maintain dominance of the market, historically, the odds tilt strongly in favor of the second mover, third mover, nth mover (i.e. fast followers) achieving market dominance. Facebook, the market leader was launched in 2004, MySpace in 2003 and there was Friendster in 2002 founded by Jonathan Abrams. Zuckerberg learnt how not to run a social network from watching the mistakes of Friendster and MySpace before him.
icantdrive55 9y ago
Run out of money? 1. The desperate, excuse me "Side Hussler" provides the late model four door Uber approved vechicle. 2. Pays insurance and gas, and maintenance, and goes into debt when the tranny goes. Uber provides an app, and marketing. I imagine their legal bills are staggering, along with political donations, and payola. And yes--I imagine they have a big office staff. I have a feeling Kalanick is the one who spent too much money on fanciful futuristic projects. I don't understand why they haven't made huge profits by now. I know they aren't making their drivers wealthy, or in many cases out of bankruptcy.
s73ver_ 9y ago
Kalanick wasn't just unpopular; he was completely incompetent as the leader of a large company.

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.
      - tim333 9y ago
        Indeed Amazon has never needed much funding. Crunchbase showed their most recent raise as being $100m in 2001. Uber is very different. Their burn was $991m in Q4 2016 and growing.
        lorenzorhoades 9y ago
        Once the company goes public, the amount of money they raised is included in their finances, and not counted as a round. Take a look at the Amazon finances and you'll see how much they have raised on loans. The higher the stock price, the better loan pricing they can secure. This is the strategy that Tesla employs as well.
  - TheCoelacanth 9y ago
    Amazon never burned through multiple billions of dollars a year.

AndrewKemendo 9y ago

Why do people keep bringing this up? Mayer did exactly what she was brought into do: increase the value of the stock to make an exit out of a failure. "The real winner here is Yahoo, which is receiving far more value for this asset than it is worth and has also managed to halve its exposure to liabilities that it should be fully on the hook for. ... It is not difficult to still see upside in the Yahoo share price. Marissa Mayer may have been terrible at executing on a digital ecosystem, but she seems to be a great salesperson." [1] http://www.investors.com/news/technology/yahoo-marissa-mayer-took-verizon-to-the-cleaners-edison-research/ http://www.investors.com/news/technology/yahoo-marissa-mayer...

sillysaurus3 9y ago
Because Yahoo faded into irrelevancy. If you want Uber to rise in value for a short time, Khosrowshahi seems like an excellent bet. I wonder who Uber will cede their throne to? Lyft? You could argue that the damage was done, that Kalanick screwed up the company so badly that nothing could save it at this point, so you may as well try to cannibalize it for value. But the best investors know better. Let it sink in: they're going to run out of money. What then?
- roskilli 9y ago
  If you look at the numbers I have to say that's a little bit silly to say. They have $6.6 bill cash on hand, they are burning ~$2.5 bill per year, although quarter to quarter net loss fell 9% last quarter. They very likely have 2 years, likely more, to start making profits each quarter. If they really need to jettison more expensive parts of the business they can sell off their autonomous unit and their VTOL investments, along with a ton of other fat they can trim. Your viewpoint does not seem connected with reality IMHO.
  - sillysaurus3 9y ago
    We'll find out. That's two years to turn a 2.5B burn rate into profits. I wonder what Dara will do? Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet. Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.

rodgerd 9y ago

> I think this is exactly how Uber will fade into irrelevance. Like Amazon? Because they used to break rules left, right, and centre. Their competitive advantage, in their early years, was ignoring tax law. The difference was that Bezos was smart enough to hedge against the day he'd have to comply, and to diversify.

ghaff 9y ago
> was ignoring tax law Most online/catalog companies don't collect sales tax and leave it up to buyers to pay usage tax [which is legal absent a physical nexus https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota]. This remains the case. Amazon just got pressured into collecting because they're so big and have affiliate sales programs.
- greglindahl 9y ago
  The way Amazon was ignoring tax law was that they operated warehouses in states while claiming that they had no physical nexus in them, by using shell companies.
  - ghaff 9y ago
    I may be wrong but as I remember it, the dispute was over whether affiliates constituted a physical presence. They collected where they had actual warehouses.
    - greglindahl 9y ago
      There was an additional dispute about affiliates. The tax dispute over warehouses went through several iterations.

geofft 9y ago

> Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. And Lyft got to where it is with no Kalanick. (... actually, does anyone know off the top of their heads, besides Lyft and maybe Uber employees, who founded Lyft and whether they're still in charge?) The myth of the founder-hero who is the only person who can run a company usually has little evidence in its favor, but in this case it has explicit evidence against it. Lyft as a service is basically indistinguishable from Uber in markets where it serves both, possibly slightly better. And if Lyft acquires Uber, the two services get to stop competing on price, buying them plenty of time to figure out the self-driving tech (which, I agree, they need), and the combined company will succeed easily, no Kalanick needed. (Also, I think "unpopular" is a pretty low-information description of why Kalanick got forced out. It could mean anything from "people on the internet don't like them" to "regulators don't like them" to "investors don't like them" to "employees don't like them," each of which have very different impacts on the company, and comparing an unpopular founder in one sense to another company's unpopular founder in another sense may not be meaningful.)

stephenhck 9y ago
I think you're overlooking a huge difference in your argument against "the myth of the founder-hero": Lyft benefited tremendously from Uber pushing into new markets / cities first. Uber and tk had a huge impact on making ride share legal, and Lyft never had to deal with that (or not nearly as much). Also, how would Lyft ever buy Uber? Even if Uber and Lyft get 50/50 market share, which I think is impossible, you need to be way larger to buy out another company.
- malandrew 9y ago
  This. Kalanick is as much Lyft's founder as Uber's founder. Without Kalanick, Lyft would be a tiny fraction of its current size and available only in a few markets.
- sah2ed 9y ago
  In the tech industry, the pioneers are usually the ones with arrows in their backs. You are absolutely right that the TK/Uber combo going head-on against existing laws is what made ride hailing a reality for millions of consumers, but unless the pioneer has an air tight go-to market strategy to create and maintain dominance of the market, historically, the odds tilt strongly in favor of the second mover, third mover, nth mover (i.e. fast followers) achieving market dominance. Facebook, the market leader was launched in 2004, MySpace in 2003 and there was Friendster in 2002 founded by Jonathan Abrams. Zuckerberg learnt how not to run a social network from watching the mistakes of Friendster and MySpace before him.

icantdrive55 9y ago

Run out of money? 1. The desperate, excuse me "Side Hussler" provides the late model four door Uber approved vechicle. 2. Pays insurance and gas, and maintenance, and goes into debt when the tranny goes. Uber provides an app, and marketing. I imagine their legal bills are staggering, along with political donations, and payola. And yes--I imagine they have a big office staff. I have a feeling Kalanick is the one who spent too much money on fanciful futuristic projects. I don't understand why they haven't made huge profits by now. I know they aren't making their drivers wealthy, or in many cases out of bankruptcy.

s73ver_ 9y ago

Kalanick wasn't just unpopular; he was completely incompetent as the leader of a large company.