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Uber is valued more for its potential and growth. Uber is optimizing growth and revenue before it optimizes profit (which could take another decade). See Amazon

by gdilla 7y ago

Uber is valued more for its potential and growth. Uber is optimizing growth and revenue before it optimizes profit (which could take another decade). See Amazon.

robbyking 7y ago
Uber's business plan under Kalanick was to create a monopoly and then raise rates. Now that Dara is CEO they're trying to legitimize themself, but it's going to be an uphill battle to say the least.
- rswail 7y ago
  Uber's business plan under Kalanick was to flout the law and use VC money to subsidize until some future time when it would be a monopoly. It assumed that the market would not react or it assumed that the VCs would keep funneling cash to keep it going. Uber's business "model" always was unsustainable and the IPO and subsequent drop is entirely realistic as people realize that. Uber Eats and some airy-fairy driverless vehicle models will not sustain it. Currently Uber does not fund its vehicles, how does it think that the capital cost of running a driverless taxi fleet in a city will somehow be cheaper than the current cost of driver+car? Uber doesn't have the capital to actually replace its current business model with one that is capital intensive and it will be eaten alive by existing fleet logistics and car manufacturers. It has no distinct advantage when operating a driverless fleet than Fedex or UPS or the equivalent operators.
rswail 7y ago
"optimizing growth and revenue" by subsidizing the operations. That isn't "optimization", it's sunk cost that will never be recovered. Uber is already withdrawing from Asian cities (eg Bangkok) where the price of taxis was close to cost, and in other cities (eg Melbourne), where Uber's flouting of the existing law has lead to deregulation, Uber is just another brand in the market. The price of a normal taxi hailed on the street and an Uber (I took Uber to/taxi from the city the other day, non peak, non surge) was literally within 5%.

by gdilla 7y ago

Uber is valued more for its potential and growth. Uber is optimizing growth and revenue before it optimizes profit (which could take another decade). See Amazon.

robbyking 7y ago

Uber's business plan under Kalanick was to create a monopoly and then raise rates. Now that Dara is CEO they're trying to legitimize themself, but it's going to be an uphill battle to say the least.

rswail 7y ago
Uber's business plan under Kalanick was to flout the law and use VC money to subsidize until some future time when it would be a monopoly. It assumed that the market would not react or it assumed that the VCs would keep funneling cash to keep it going. Uber's business "model" always was unsustainable and the IPO and subsequent drop is entirely realistic as people realize that. Uber Eats and some airy-fairy driverless vehicle models will not sustain it. Currently Uber does not fund its vehicles, how does it think that the capital cost of running a driverless taxi fleet in a city will somehow be cheaper than the current cost of driver+car? Uber doesn't have the capital to actually replace its current business model with one that is capital intensive and it will be eaten alive by existing fleet logistics and car manufacturers. It has no distinct advantage when operating a driverless fleet than Fedex or UPS or the equivalent operators.

rswail 7y ago

"optimizing growth and revenue" by subsidizing the operations. That isn't "optimization", it's sunk cost that will never be recovered. Uber is already withdrawing from Asian cities (eg Bangkok) where the price of taxis was close to cost, and in other cities (eg Melbourne), where Uber's flouting of the existing law has lead to deregulation, Uber is just another brand in the market. The price of a normal taxi hailed on the street and an Uber (I took Uber to/taxi from the city the other day, non peak, non surge) was literally within 5%.