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Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, b

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

icebraining 9y ago
Is a 30% haircut really enough to make the investment worthwhile if Uber doesn't make it?
- module0000 9y ago
  It depends how they hedge that investment. A 30% discount on the basis means you can be very aggressive with your hedge positions. I'd say it's way too early to speculate yet...but somewhere within softbank, a risk manager is already planning on the whole deal to fail(that's his/her job), and how to keep the effects of that failure from being catastrophic.
davewritescode 9y ago
They probably could if they focused on profitable markets. They’ve been burning money because they’ve been obsessed with growth as opposed to profitable growth.
- Someone 9y ago
  That’s what they seem to be doing. http://www.businessinsider.com/uber-sells-auto-leasing-business-xchange-leasing-to-faircom-2017-12 http://www.businessinsider.com/uber-sells-auto-leasing-busin...: ”Uber has found a buyer, and a partner, for its auto-leasing business that was losing more money than expected”.
valuearb 9y ago
Uber should easily be profitable without driverless cars. Uber's cost to book rides is pennies, its share of ride revenues is dollars. It's likely profitable or close in north america now. The naked capitalism analysis was childishly biased, completely done without access to the necessary detail of their financials. Uber under Kalanick poured massive amounts of money into accelerating international market expansion as well as a huge number of side projects of questionable value. Uber just exited the car leasing business. Yes, Kalanick had Uber leasing cars to drivers, and losing big money doing it. How much has it poured into Uber Eats? How much did it pour into driverless car tech when it will be easily available whenever it becomes good enough for regulators to allow it? Besides the cost, how big a distraction to running the actual business of offering car sharing services were these hundred other endeavors? The new CEO just has to trim out almost all of the side businesses, and put the focus on finding more cost effective ways to grow Uber's car sharing services world wide. Part of that is not pissing on your own brand by doing sleazy things. In the end, if they remain the world wide leader in car sharing service, installed on the most mobile devices, with the biggest pool of drivers and customers, they'll be very profitable. and making the transition to driverless cars will be easier for them than anyone else because they'll have the biggest brand and customer base.
- aetherson 9y ago
  Uber trumpets it and crows when they come close to profitability in markets. You're nuts if you think that Uber is profitable in North America. There is clearly some profitable ride-sharing business in the general Uber model, but it remains unclear that there is a profitable ride-sharing business with enough gross revenue to justify a 10x unicorn business. Uber's main problems with profit margins aren't Uber Eats or even driverless cars, it's in getting their ride volumes up.
  - valuearb 9y ago
    I never said their valuation is justified, just that their business model works. The costs of providing their booking service is small compared to the revenues it generates. The only question is how much do they have to spend on end user marketing and driver recruitment.
Fricken 9y ago
SoftBank has huge bets in all the global rideshare companies, which includes Grab and Ola as well as Uber and Didi. The bet is on providing sophisticated transportation logistics in fast growing developing world cities that are currently served by a hodge podge of unaccountable, poorly coordinated small time private transportation companies, and where overwhelmed regional governments are unable to provide sufficient public transportation services. It's an addressable market of potentially billions of people who will never own cars, and and currently have limited options.
joncrane 9y ago
Do you see Lyft exceeding Uber's success?
- icecreameasier 9y ago
  Impossible, Overall Uber's network effect is strong, also Uber has a lot of strategic move like Eats, Freight and ATG. I feel Eats and Freight will be huge in near term and ATG is invaluable in long term.

icebraining 9y ago

Is a 30% haircut really enough to make the investment worthwhile if Uber doesn't make it?

module0000 9y ago
It depends how they hedge that investment. A 30% discount on the basis means you can be very aggressive with your hedge positions. I'd say it's way too early to speculate yet...but somewhere within softbank, a risk manager is already planning on the whole deal to fail(that's his/her job), and how to keep the effects of that failure from being catastrophic.

davewritescode 9y ago

They probably could if they focused on profitable markets. They’ve been burning money because they’ve been obsessed with growth as opposed to profitable growth.

Someone 9y ago
That’s what they seem to be doing. http://www.businessinsider.com/uber-sells-auto-leasing-business-xchange-leasing-to-faircom-2017-12 http://www.businessinsider.com/uber-sells-auto-leasing-busin...: ”Uber has found a buyer, and a partner, for its auto-leasing business that was losing more money than expected”.

valuearb 9y ago

Uber should easily be profitable without driverless cars. Uber's cost to book rides is pennies, its share of ride revenues is dollars. It's likely profitable or close in north america now. The naked capitalism analysis was childishly biased, completely done without access to the necessary detail of their financials. Uber under Kalanick poured massive amounts of money into accelerating international market expansion as well as a huge number of side projects of questionable value. Uber just exited the car leasing business. Yes, Kalanick had Uber leasing cars to drivers, and losing big money doing it. How much has it poured into Uber Eats? How much did it pour into driverless car tech when it will be easily available whenever it becomes good enough for regulators to allow it? Besides the cost, how big a distraction to running the actual business of offering car sharing services were these hundred other endeavors? The new CEO just has to trim out almost all of the side businesses, and put the focus on finding more cost effective ways to grow Uber's car sharing services world wide. Part of that is not pissing on your own brand by doing sleazy things. In the end, if they remain the world wide leader in car sharing service, installed on the most mobile devices, with the biggest pool of drivers and customers, they'll be very profitable. and making the transition to driverless cars will be easier for them than anyone else because they'll have the biggest brand and customer base.

aetherson 9y ago
Uber trumpets it and crows when they come close to profitability in markets. You're nuts if you think that Uber is profitable in North America. There is clearly some profitable ride-sharing business in the general Uber model, but it remains unclear that there is a profitable ride-sharing business with enough gross revenue to justify a 10x unicorn business. Uber's main problems with profit margins aren't Uber Eats or even driverless cars, it's in getting their ride volumes up.
- valuearb 9y ago
  I never said their valuation is justified, just that their business model works. The costs of providing their booking service is small compared to the revenues it generates. The only question is how much do they have to spend on end user marketing and driver recruitment.

Fricken 9y ago

SoftBank has huge bets in all the global rideshare companies, which includes Grab and Ola as well as Uber and Didi. The bet is on providing sophisticated transportation logistics in fast growing developing world cities that are currently served by a hodge podge of unaccountable, poorly coordinated small time private transportation companies, and where overwhelmed regional governments are unable to provide sufficient public transportation services. It's an addressable market of potentially billions of people who will never own cars, and and currently have limited options.

joncrane 9y ago

Do you see Lyft exceeding Uber's success?

icecreameasier 9y ago
Impossible, Overall Uber's network effect is strong, also Uber has a lot of strategic move like Eats, Freight and ATG. I feel Eats and Freight will be huge in near term and ATG is invaluable in long term.