4 ms·

Is this the death of Uber?

striking 9y ago
Probably just the death of the Uber self-driving program. Although that could perhaps spell death sometime in the future.
cryptoz 9y ago
I personally don't believe they can survive with human drivers (unit economics) and I personally don't believe they will catch up in engineering and technology of self driving cars, especially after this (but I never thought they would, too far behind from the start). So I would say maybe yes. But there are probably ways out of this for them. They will probably chug along for at least a decade and in that time anything can happen.
- phil21 9y ago
  Curious why you don't think they can survive with human drivers? Every financial report I've been able to get hard data out of seems to show them very close to operational profitability. Somewhere within 10-20%. I personally don't feel there is that much price sensitivity in the market to make a 15% price increase cause volumes to dip substantially. I could of course be wrong, but it seems to me Uber is at a point they could be "instantly" profitable if they simply decided to be and decided to stop expanding.
  - dannyw 9y ago
    Uber is already doing pretty well with price segmentation in the US (the Uber Express POOL comes with a forced 2 minute wait); they can certainly: - raise prices of uberX, price sensitive riders can still use POOL or Express POOL - reduce marketing and growth expenses; reframe KPIs and targets in term of "dollar ROI" instead of new rider/driver targets Uber absolutely works from a unit economics perspective. How do you think taxis exist?
    - geofft 9y ago
      Taxis are usually a bit pricier and also don't subsidize a large team of software engineers at Silicon Valley salaries.
      - CydeWeys 9y ago
        Here in NYC, the mortgage on a taxi medallion costs a lot more than the total salary of all Uber developers divided by the number of Uber drivers. There are other costs that go into taxis that Ubers don't have. Taxis have back-office support staff too (the people you call up to order one to you).
  - geofft 9y ago
    Uber and Lyft are basically equivalent services in cities they both serve. A 15% price increase for one is enough to drive lots of people to just default to the other.
- glibgil 9y ago
  If there is a team with real software that Uber can acquire, they can catch up. GM and Waymo seemingly do not need another team. While they can outbid Uber, Uber can always close the deal by promising that the new team's software will be the new face of Uber self-driving and not shelved like it would be at GM or Waymo
  - ineedasername 9y ago
    Are there any teams out there besides GM and Waymo that were doing much better than Uber at this?
- FLUX-YOU 9y ago
  They can always buy their own autonomous vehicles. Or start incentives for drivers to own/lease them and drive with Uber, unless we get some laws that say you can't ride-share with an autonomous vehicle
- ngsayjoe 9y ago
  They can probably survive with human drivers, they just won't survive with $100 bil valuation.
gpm 9y ago
I think the better question is "Is this the death of Uber's self driving car program/". Uber is likely to survive in some form without one, they have the ridership and can use someone else's self driving cars in the future. They will just get a much smaller piece of the pie.
- rhacker 9y ago
  I don't know, if they have the balls to walk into Waymo and ask for their tech to be licensed? But the answer could be no - but Alphabet is an investor, so who knows... Uber's dominance in the taxi app space + Waymo cred?
  - ocdtrekkie 9y ago
    This was actually Uber's original plan. They only started their own because Google was giving them the cold shoulder and then announced they were making their own ride service using the cars.
femto113 9y ago
Maybe just the death of the idea that self-driving cars were somehow integral Uber's business model. To the extent that vision was a major driver of valuations, and given their ongoing need to raise capital then perhaps it could lead to their demise. On the other hand if this gets them to refocus on their current business it might perhaps help their longevity.
- amptorn 9y ago
  Self-driving cars never made any sense as part of Uber's business model. What were they going to do, buy a fleet of vehicles, build garages, hire mechanics? They're a software company.
  - ineedasername 9y ago
    Maybe they thought they'd franchise out the tech, lease and loan terms the way they do for their cars now? It's a good point, I dont know what they were thinking, if anything aside from "that'll sort itself out when the time comes"
  - CydeWeys 9y ago
    Why not? Google started out as a software company and now has plenty of different hardware lines.
  - gpm 9y ago
    It's not like you drive millions of miles without a small fleet of vehicle. Not only is that what they would do on large scale, it's what they already started to do on small scale. Uber's a company whose current main product is software, that doesn't mean they can't branch out into new things and are forever tied to software. I'd also argue that Uber already has a lot more experience with working with a million different people than most other companies (currently drivers, in the future possibly mechanics, garage owners, etc).
galieos_ghost 9y ago
Pretty much, they lose money on every ride. They raised money on the vision that they would be able to cut out the labor cost with self-driving.
acchow 9y ago
Won't they just focus the testing in other states? Nevada? Penn?

Probably just the death of the Uber self-driving program. Although that could perhaps spell death sometime in the future.

cryptoz 9y ago

I personally don't believe they can survive with human drivers (unit economics) and I personally don't believe they will catch up in engineering and technology of self driving cars, especially after this (but I never thought they would, too far behind from the start). So I would say maybe yes. But there are probably ways out of this for them. They will probably chug along for at least a decade and in that time anything can happen.

phil21 9y ago
Curious why you don't think they can survive with human drivers? Every financial report I've been able to get hard data out of seems to show them very close to operational profitability. Somewhere within 10-20%. I personally don't feel there is that much price sensitivity in the market to make a 15% price increase cause volumes to dip substantially. I could of course be wrong, but it seems to me Uber is at a point they could be "instantly" profitable if they simply decided to be and decided to stop expanding.
- dannyw 9y ago
  Uber is already doing pretty well with price segmentation in the US (the Uber Express POOL comes with a forced 2 minute wait); they can certainly: - raise prices of uberX, price sensitive riders can still use POOL or Express POOL - reduce marketing and growth expenses; reframe KPIs and targets in term of "dollar ROI" instead of new rider/driver targets Uber absolutely works from a unit economics perspective. How do you think taxis exist?
  - geofft 9y ago
    Taxis are usually a bit pricier and also don't subsidize a large team of software engineers at Silicon Valley salaries.
    - CydeWeys 9y ago
      Here in NYC, the mortgage on a taxi medallion costs a lot more than the total salary of all Uber developers divided by the number of Uber drivers. There are other costs that go into taxis that Ubers don't have. Taxis have back-office support staff too (the people you call up to order one to you).
- geofft 9y ago
  Uber and Lyft are basically equivalent services in cities they both serve. A 15% price increase for one is enough to drive lots of people to just default to the other.
glibgil 9y ago
If there is a team with real software that Uber can acquire, they can catch up. GM and Waymo seemingly do not need another team. While they can outbid Uber, Uber can always close the deal by promising that the new team's software will be the new face of Uber self-driving and not shelved like it would be at GM or Waymo
- ineedasername 9y ago
  Are there any teams out there besides GM and Waymo that were doing much better than Uber at this?
FLUX-YOU 9y ago
They can always buy their own autonomous vehicles. Or start incentives for drivers to own/lease them and drive with Uber, unless we get some laws that say you can't ride-share with an autonomous vehicle
ngsayjoe 9y ago
They can probably survive with human drivers, they just won't survive with $100 bil valuation.

gpm 9y ago

I think the better question is "Is this the death of Uber's self driving car program/". Uber is likely to survive in some form without one, they have the ridership and can use someone else's self driving cars in the future. They will just get a much smaller piece of the pie.

rhacker 9y ago
I don't know, if they have the balls to walk into Waymo and ask for their tech to be licensed? But the answer could be no - but Alphabet is an investor, so who knows... Uber's dominance in the taxi app space + Waymo cred?
- ocdtrekkie 9y ago
  This was actually Uber's original plan. They only started their own because Google was giving them the cold shoulder and then announced they were making their own ride service using the cars.

femto113 9y ago

Maybe just the death of the idea that self-driving cars were somehow integral Uber's business model. To the extent that vision was a major driver of valuations, and given their ongoing need to raise capital then perhaps it could lead to their demise. On the other hand if this gets them to refocus on their current business it might perhaps help their longevity.

amptorn 9y ago
Self-driving cars never made any sense as part of Uber's business model. What were they going to do, buy a fleet of vehicles, build garages, hire mechanics? They're a software company.
- ineedasername 9y ago
  Maybe they thought they'd franchise out the tech, lease and loan terms the way they do for their cars now? It's a good point, I dont know what they were thinking, if anything aside from "that'll sort itself out when the time comes"
- CydeWeys 9y ago
  Why not? Google started out as a software company and now has plenty of different hardware lines.
- gpm 9y ago
  It's not like you drive millions of miles without a small fleet of vehicle. Not only is that what they would do on large scale, it's what they already started to do on small scale. Uber's a company whose current main product is software, that doesn't mean they can't branch out into new things and are forever tied to software. I'd also argue that Uber already has a lot more experience with working with a million different people than most other companies (currently drivers, in the future possibly mechanics, garage owners, etc).

galieos_ghost 9y ago

Pretty much, they lose money on every ride. They raised money on the vision that they would be able to cut out the labor cost with self-driving.

acchow 9y ago

Won't they just focus the testing in other states? Nevada? Penn?