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The new CEO continues to impress. When he took over, Kalanick had Uber in something like a hundred side-businesses, a massive waste of focus, effort, brand and

The new CEO continues to impress. When he took over, Kalanick had Uber in something like a hundred side-businesses, a massive waste of focus, effort, brand and capital. This isn't the first or will be the last black hole side venture Dara is getting Uber out of. And he's already established his 100x better at PR and building/protecting the brand than Travis was. Uber never needed to be in the automated trucks business, there are zero synergies with their core business, and it's not even clear that will ever be a good business to be in. Is Uber Eats next on the chopping block? That would probably be my choice.

lhorie 8y ago
Eats? I don't think so. I heard it's one of the fastest growing verticals at Uber.
- valuearb 8y ago
  It is, and it's huge. It's 10% of their revenues now. Which means it's burning more cash than any other vertical at Uber by far. Why does Uber need to fund this "business" for years to come? How does it benefit them to keep throwing money at it? Answer: It really doesn't. It's a huge distraction that might never be profitable.
  - seibelj 8y ago
    Wouldn’t using drivers who are already on the road, who drive to point A to pick up a person and drop them off at point B, make perfect sense to pick up food at point A and drop it off at point B? And considering food doesn’t take a pool spot, they could do everything simultaneously while picking up people. It makes perfect sense to me.
    - valuearb 8y ago
      You have $6B left. Building out ride sharing will cost more than $6B. So will building out Uber Eats. What'll it be, ride sharing, eats, or more dilution? Oh, and one of these business you are the clear #1 in, and the other, you have a chance to be #2.
  - ghein 8y ago
    It comes down to this question: are they Viaweb or are they Amazon? If they're Viaweb then they should only do "taxi-like" stuff and should throw away all the automation and other businesses. If they're Amazon then they are in transportation. Eats acts as a flywheel - more pay for drivers, more demand for drivers, more supply of drivers, more loyal customers, more revenue from customers. They should do automation, be involved in trucking, eats, scooters... add more flywheels. What's the right strategy? We'll know in 5 years and all proclaim that it was obvious!
    - valuearb 8y ago
      It's nothing like amazon. Amazon had positive cash flow from early days and has mostly kept positive cash flow ever since (even though they don't report profits, they generated cash). Because of that they've rarely raised debt or equity, and only when they want to on their terms, never when forced to. Because of that discipline they could work on leveraging into new businesses that had synergies with their current business. But they never tried to do them all at once. Again they were disciplined. At first it was books only. Then they moved into new products bit by bit, and established each as a good business for them before moving into new ones.
    - eric_h 8y ago
      In NYC I get uber eats delivered by a car approximately 1 in 30 orders. Most Uber eats deliver by foot or by bicycle.
  - probe 8y ago
    GrubHub, a direct publicly traded competitor, is profitable and has a market cap of 11.6B (and is growing tremendously). Considering that Uber Eats already has a gross sales run rate larger than GrubHub, I do imagine it's a pretty good bet. There are also a lot of horizontal synergies between the business models.
    - valuearb 8y ago
      That's a very good counter argument, but the real question is whether Uber Eats is profitable or close to being profitable. If it is, you are right and I'm totally wrong and they should kill every side project (including probably driverless car technologies) and keep Eats and Ride Sharing. If Uber Eats isn't close to profitability it means they are far behind GrubHub despite their advantage of their massive synergy, and have little hope to catch up (in profitability, even if Uber Eats can give away enough services to outgrow Grubhub in revenues that would be a pyrrhic victory).
  - deleted 8y ago
    [deleted]
swozey 8y ago
> Is Uber Eats next on the chopping block? That would probably be my choice. Are you saying this because you don't use Uber Eats and don't see a value for it? I and people I know in my city heavily use Uber Eats and it provides Uber drivers who are already on the road (here in over abundance to the point that they're barely making any money) additional income.
- sincerely 8y ago
  I don't think Uber Eats has any specific pros over the million other food delivery startups
  - wskinner 8y ago
    It does on the supply side. It keeps drivers on the Uber network, which is good for both the rides business and the Eats business due to more consistent supply, and good for drivers due to higher total volume of work. The eventual result is that Uber can operate more efficiently than competitors that only do rides or food, allowing them to compete better in both markets. (I used to work at Uber)
    - clairity 8y ago
      exactly. ubereats is a flanking product, meant to protect the core business. strategically, uber really only has market power on the supply side, and ubereats is primarily about protecting that advantage and less about being a standalone business (although i'm sure they'd be thrilled if it succeeded as a standalone business). i'd be surprised if ubereats went away any time soon. at least, not without something else replacing it.
      - slivym 8y ago
        In European markets there is literally no overlap between Uber Eats and Uber. Uber drivers are driving Toyotas, Uber eats drivers are riding mopeds and bicycles. You can't just switch from one to the other.
deepsun 8y ago
Then investors would start asking why there is so much cash in company accounts. Good CEO invests every penny into something (hopefully profitable), for example, Jeff Bezos.
- icelancer 8y ago
  >> Good CEO invests every penny into something (hopefully profitable), for example, Jeff Bezos. Apple?
- valuearb 8y ago
  A great CEO is a good resource allocator. Cook doesn't blow Apple's billions on dubious side projects, he returns it to shareholders. In the case of a startup like Uber, it's mandatory to never run low on capital before you turn profitable, or you will soon be either out of business or soon be forced to take massive dilution to stay in business. The reason their burn rate is massive in a big part part because of these dubious side projects and distractions, and it's already costs them substantial dilution. And even after decapitating most of their side projects, they can easily justify keeping a few years cash in the bank because they have a huge potential market in ride-hailing that they haven't even come close to saturating and are still burning capital building out..
krrrh 8y ago
He's also been aggressively pursuing new partnerships focusing on the core problem of getting a person to where they are trying to get to, including public transit tickets, car rentals, e-bikes, and scooters. https://www.nytimes.com/2018/07/09/technology/uber-invests-lime-electric-scooter.html https://www.nytimes.com/2018/07/09/technology/uber-invests-l...
WisNorCan 8y ago
I particularly like that he is signaling publicly that the clear priority for the company is cars. They could have done this silently (to save face), but this has the benefit of making clear to the employees & investors that cars are #1. In retrospect, trucking never made sense. The supply side & demand side are both different from cars. I expect he will shut down or try to sell the remaining trucking pieces (Uber Freight) before IPO. This is the pattern from his tenure at Expedia.
fullshark 8y ago
Well he's great at getting the company ready to IPO and protecting the investors' money.
- valuearb 8y ago
  If you don't think protecting the investors money is not job one for any CEO, then you should never become a CEO or investor. And no good CEO solely gets a company ready to IPO unless they are committing fraud. Getting ready to go public almost always (outside of super bubbles) means establishing your business model works. And usually that means generating profits, and generating profits means you are never forced to go public, you get to go only when it's most advantageous for the company. Going public isn't an end-goal, it's a hugely expensive and distracting operation than only provides a single thing of value, slightly greater liquidity for your investors.
awad 8y ago
I highly doubt they cut it...UberEats makes a lot of sense for drivers to help smooth out the lulls in between passengers and is a convenient secondary service to Uber customers already used to the user experience. From what I've read, it's growing like gangbusters.
cam3ham 8y ago
lol, re: uber eats - are you serious?
make3 8y ago
I'm sure a rock would have better pr Ryan Kalanick
konschubert 8y ago
his -> he's

lhorie 8y ago

Eats? I don't think so. I heard it's one of the fastest growing verticals at Uber.

valuearb 8y ago
It is, and it's huge. It's 10% of their revenues now. Which means it's burning more cash than any other vertical at Uber by far. Why does Uber need to fund this "business" for years to come? How does it benefit them to keep throwing money at it? Answer: It really doesn't. It's a huge distraction that might never be profitable.
- seibelj 8y ago
  Wouldn’t using drivers who are already on the road, who drive to point A to pick up a person and drop them off at point B, make perfect sense to pick up food at point A and drop it off at point B? And considering food doesn’t take a pool spot, they could do everything simultaneously while picking up people. It makes perfect sense to me.
  - valuearb 8y ago
    You have $6B left. Building out ride sharing will cost more than $6B. So will building out Uber Eats. What'll it be, ride sharing, eats, or more dilution? Oh, and one of these business you are the clear #1 in, and the other, you have a chance to be #2.
- ghein 8y ago
  It comes down to this question: are they Viaweb or are they Amazon? If they're Viaweb then they should only do "taxi-like" stuff and should throw away all the automation and other businesses. If they're Amazon then they are in transportation. Eats acts as a flywheel - more pay for drivers, more demand for drivers, more supply of drivers, more loyal customers, more revenue from customers. They should do automation, be involved in trucking, eats, scooters... add more flywheels. What's the right strategy? We'll know in 5 years and all proclaim that it was obvious!
  - valuearb 8y ago
    It's nothing like amazon. Amazon had positive cash flow from early days and has mostly kept positive cash flow ever since (even though they don't report profits, they generated cash). Because of that they've rarely raised debt or equity, and only when they want to on their terms, never when forced to. Because of that discipline they could work on leveraging into new businesses that had synergies with their current business. But they never tried to do them all at once. Again they were disciplined. At first it was books only. Then they moved into new products bit by bit, and established each as a good business for them before moving into new ones.
  - eric_h 8y ago
    In NYC I get uber eats delivered by a car approximately 1 in 30 orders. Most Uber eats deliver by foot or by bicycle.
- probe 8y ago
  GrubHub, a direct publicly traded competitor, is profitable and has a market cap of 11.6B (and is growing tremendously). Considering that Uber Eats already has a gross sales run rate larger than GrubHub, I do imagine it's a pretty good bet. There are also a lot of horizontal synergies between the business models.
  - valuearb 8y ago
    That's a very good counter argument, but the real question is whether Uber Eats is profitable or close to being profitable. If it is, you are right and I'm totally wrong and they should kill every side project (including probably driverless car technologies) and keep Eats and Ride Sharing. If Uber Eats isn't close to profitability it means they are far behind GrubHub despite their advantage of their massive synergy, and have little hope to catch up (in profitability, even if Uber Eats can give away enough services to outgrow Grubhub in revenues that would be a pyrrhic victory).
- deleted 8y ago
  [deleted]

swozey 8y ago

> Is Uber Eats next on the chopping block? That would probably be my choice. Are you saying this because you don't use Uber Eats and don't see a value for it? I and people I know in my city heavily use Uber Eats and it provides Uber drivers who are already on the road (here in over abundance to the point that they're barely making any money) additional income.

sincerely 8y ago
I don't think Uber Eats has any specific pros over the million other food delivery startups
- wskinner 8y ago
  It does on the supply side. It keeps drivers on the Uber network, which is good for both the rides business and the Eats business due to more consistent supply, and good for drivers due to higher total volume of work. The eventual result is that Uber can operate more efficiently than competitors that only do rides or food, allowing them to compete better in both markets. (I used to work at Uber)
  - clairity 8y ago
    exactly. ubereats is a flanking product, meant to protect the core business. strategically, uber really only has market power on the supply side, and ubereats is primarily about protecting that advantage and less about being a standalone business (although i'm sure they'd be thrilled if it succeeded as a standalone business). i'd be surprised if ubereats went away any time soon. at least, not without something else replacing it.
    - slivym 8y ago
      In European markets there is literally no overlap between Uber Eats and Uber. Uber drivers are driving Toyotas, Uber eats drivers are riding mopeds and bicycles. You can't just switch from one to the other.

deepsun 8y ago

Then investors would start asking why there is so much cash in company accounts. Good CEO invests every penny into something (hopefully profitable), for example, Jeff Bezos.

icelancer 8y ago
>> Good CEO invests every penny into something (hopefully profitable), for example, Jeff Bezos. Apple?
valuearb 8y ago
A great CEO is a good resource allocator. Cook doesn't blow Apple's billions on dubious side projects, he returns it to shareholders. In the case of a startup like Uber, it's mandatory to never run low on capital before you turn profitable, or you will soon be either out of business or soon be forced to take massive dilution to stay in business. The reason their burn rate is massive in a big part part because of these dubious side projects and distractions, and it's already costs them substantial dilution. And even after decapitating most of their side projects, they can easily justify keeping a few years cash in the bank because they have a huge potential market in ride-hailing that they haven't even come close to saturating and are still burning capital building out..

krrrh 8y ago

He's also been aggressively pursuing new partnerships focusing on the core problem of getting a person to where they are trying to get to, including public transit tickets, car rentals, e-bikes, and scooters. https://www.nytimes.com/2018/07/09/technology/uber-invests-lime-electric-scooter.html https://www.nytimes.com/2018/07/09/technology/uber-invests-l...

WisNorCan 8y ago

I particularly like that he is signaling publicly that the clear priority for the company is cars. They could have done this silently (to save face), but this has the benefit of making clear to the employees & investors that cars are #1. In retrospect, trucking never made sense. The supply side & demand side are both different from cars. I expect he will shut down or try to sell the remaining trucking pieces (Uber Freight) before IPO. This is the pattern from his tenure at Expedia.

fullshark 8y ago

Well he's great at getting the company ready to IPO and protecting the investors' money.

valuearb 8y ago
If you don't think protecting the investors money is not job one for any CEO, then you should never become a CEO or investor. And no good CEO solely gets a company ready to IPO unless they are committing fraud. Getting ready to go public almost always (outside of super bubbles) means establishing your business model works. And usually that means generating profits, and generating profits means you are never forced to go public, you get to go only when it's most advantageous for the company. Going public isn't an end-goal, it's a hugely expensive and distracting operation than only provides a single thing of value, slightly greater liquidity for your investors.

awad 8y ago

I highly doubt they cut it...UberEats makes a lot of sense for drivers to help smooth out the lulls in between passengers and is a convenient secondary service to Uber customers already used to the user experience. From what I've read, it's growing like gangbusters.

cam3ham 8y ago

lol, re: uber eats - are you serious?

make3 8y ago

I'm sure a rock would have better pr Ryan Kalanick

konschubert 8y ago

his -> he's