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I have a pet theory that Travis is leveraging his new company to end up attempting a Jobs NeXt Step style reverse take over of Uber. I could be reading tea le

I have a pet theory that Travis is leveraging his new company to end up attempting a Jobs NeXt Step style reverse take over of Uber. I could be reading tea leaves, but it seems like something he’d have thought about.

blunderkid 7y ago
Or he is quite happy to have cashed out instead of wasting his life away trying to run a low (if any) margin, weak network effects business with local competitors and regulators nibbling at your sanity.
- ArmandGrillet 7y ago
  That doesn't fit what's portrayed in Super Pumped: The Battle for Uber, but only time will tell.
  - utopian3 7y ago
    Is that book any more worthwhile to read than the dozens of articles that have been published since 2017? Debating adding it to my audiobook queue...
    - stingrae 7y ago
      Personally, I found it to be a rehash of all the articles since 2017. Even the structure of the book is like each chapter was an article about a set of events.
- texasbigdata 7y ago
  Weak network effects? That's not what I read in the prospectus! :)
- bane 7y ago
  It's kind of amazing that almost 100% of the Uber and Lyft rides I've taken in the last 6 months have had drivers/cars that work for both simultaneously. There only service distinction is which app you use to book the ride, the inventory and employees are all the same.
  - Rebelgecko 7y ago
    I think they're trying to change that. They're both rolling out their own rewards programs to get Frequent Flyer program style loyalty
    - sriram_sun 7y ago
      Since it is travel season, I believe Lyft is offering 10x miles on your ride to the airport.
      - Rebelgecko 7y ago
        You can also link your Lyft account to both Delta and Hilton to earn a few points per dollar with them every time you take a ride. It's a good way to keep Hilton points from expiring if you don't stay at one very often.
  - giancarlostoro 7y ago
    Yeah, my family members who were doing Uber were also doing Lyft. They preferred one over the other cause they got their money quicker.
  - pbreit 7y ago
    Drivers definitely have a preference since the incentives are all volume based. Even riders generally skew to one preferred service.
  - loftyai 7y ago
    It's interesting that you bring this up. Every time I take an uber or lyft (which is very often), I ask the driver which one they prefer. Around early 2019, I've noticed a lot of drivers say they get more business on uber, but prefer lyft. So, it seems like there is actually a noticeable distinction for the 2 services, at least from the driver's perspective.
    - xenospn 7y ago
      Uber slashed the driver pay a while ago. My friend stopped driving for them after that.
- pbreit 7y ago
  Uber’s core Rides business has huge margins and one of the most powerful network effects in business (that’s why you see only 1 or 2 neverchanging players in mature markets).
  - mbesto 7y ago
    > Uber’s core Rides business has huge margins Source? And what do you mean by margins specifically? > one of the most powerful network effects in business Disagree. One result of a very strong network effect is that it means higher switching costs for customers/users. - Rider switching costs are near zero. For example, it's as simple as downloading a new app. If I switch from Facebook to Path (if it was still around), I have to re-establish all of my connections again, which is a massive amount of friction. - It has one of the frailest controls on its sourcing. Drivers switching costs are near zero (unless of course the drivers are sucked into preferential leasing by the rideshare company). Ridesharing will become a race to the bottom. Stronger network effects imply margin expansion (see what Facebook did to its gross margin circa 2013-2017).
    - OnlineGladiator 7y ago
      > Ridesharing will become a race to the bottom. Ridesharing has always been a race to the bottom, it's just been VC money keeping it afloat longer.
  - colejohnson66 7y ago
    > Uber’s core Rides business has huge margins [citation needed]. They’re bleeding billions every year.
  - Barrin92 7y ago
    the definition of a network effect is that the users themselves make the network more valuable, if the network effect is meaningful they do so in an exponential way and the network is hard to break up. Uber has virtually no network effects. One driver is just one more driver without any effect on other drivers or users, in contrast to say, user-driven content generation on tiktok or youtube. In fact, due to the natural constraints on supply in cities if anything there a negative effect to growing the business, which is of course why there has never been a taxi monopoly, to begin with, and transportation is a traditional small business, high competition sector. No offence and I don't intend to be rude but literally everything in your statement is comedically wrong. They don't make any money, there are no tech margins because drivers, regulation and advertisement cost pile up linearly, and the competition is brutal. How Uber got butchered by Didi in China is only one example of it, but the ride-sharing industry has had many victims already. Just look at bike-sharing in China.
- fullshark 7y ago
  His new business seems like it would have similar problems. Actually his new business seems like WeWork but for kitchens. https://www.cloudkitchens.com/ https://www.cloudkitchens.com/
  - gscott 7y ago
    Commercial kitchens are more rare then empty office space because they require a lot of certifications and special equipment. Also if you are cooking food for the public then it has to be done in a commercial kitchen where for WeWork the alternative is to work from home...
    - JMTQp8lwXL 7y ago
      Prior to WeWork, many companies were (are) in the business of renting commercial real estate. CloudKitchen's bet is creating a huge valuation proposition by making securing a kitchen (as a restauranteur) as easy as provisioning resources on AWS. In a sense, there is some logic there, as restaurants in major cities come and go. There's some degree of food being subject to a fad boom/bust cycle. And as a customer, having access to a constantly rotating set of restaurants, as opposed to a much more static set of brick-and-mortar restaurants in your neighborhood -- maybe you're more likely to engage more with the whatever food delivery app CloudKitchen might eventually make, for it's continuing novelty in dining options.
kristianc 7y ago
I'm curious where you see the Apple-like margins at a business like Uber.
- H8crilA 7y ago
  They need to reach scale, margins will appear then /s
- pbreit 7y ago
  The 35% of the fare that Uber keeps has very little marginal expenses associated with it. Lyft’s contribution margin is over 50%.
- georgeplusplus 7y ago
  I don’t understand how people don’t get this. Taxi companies are profitable and they have employees, a fleet, garages. Uber is not profitable and does the same job as a taxi company. Doesn’t something seem wrong here? The reason drivers love Lyft is they pay more. They ph more because Lyft takes a bigger loss than Uber to stay competitive. That business model won’t last so Uber will outlast Lyft and then finally be on the road to profitability once the stupid Lyft price war ends. I’m baffled by people who think Uber cant make money. there’s no logic at all in that thought process. They also ignore the huge rnd cost uber is footing for self driving tech. I’m confident The sell off has nothing to do with kalanick spiting Uber and everything to do with him wanting to divest his interests so he can work on his other project
  - jedberg 7y ago
    > Taxi companies are profitable and they have employees, a fleet, garages. They’re only profitable because of regulatory capture. The government gives them a monopoly and limits supply. If they offered unlimited medallions, taxis would lose money too.
    - georgeplusplus 7y ago
      Even against a government backed cab monopoly, Uber still has more market share in key markets like NYC. That’s kinda my point why the bear narrative doesn’t hold up.
admn2 7y ago
I thought about this too. Genuine question: how does him totally exiting his Uber positions add credence to this theory?
- fossuser 7y ago
  He expects things at Uber to get worse while he’s not there - if he comes back he can enter again at a lower price point.
- kick 7y ago
  After getting ousted from Apple, Jobs sold all of his Apple stock. After re-joining Apple, Jobs sold all of his Apple stock to play mind-tricks on the board (successfully, I might add).
  - fastball 7y ago
    How did he sell all of his stock twice? When did he re-purchase?
    - kick 7y ago
      He didn't re-purchase. They bought NeXT and paid primarily in stock.
Ozzie_osman 7y ago
He reportedly did say something to that effect (he called it "Steve Jobs-ing it"): https://www.businessinsider.com/uber-ex-ceo-travis-kalanick-steve-jobs-ing-search-replacement-report-2017-7 https://www.businessinsider.com/uber-ex-ceo-travis-kalanick-... EDIT: abbreviation
- lostlogin 7y ago
  You’ve abbreviated it one too far. "Steve Jobs-ing it". Good find.
ping_pong 7y ago
Why would he go back into Uber when he exited with billions? It's obvious he doesn't have control over the company anymore, so he sold his stake and is moving on. It's the smart thing to do at this point, he has extracted as much as he possibly could, and instead of betting on the current management, he sold his stake and is betting on himself a second time through Cloud Kitchens, which is actually a good idea.
- fossuser 7y ago
  Why did Steve Jobs go back to Apple? Partly because NeXt was failing, but it was more than that. I suspect there’s a lot of similarity there with Travis, but in his case he may be in a better position.
joeblau 7y ago
I was saying this to my friend about 18 months ago. This process seems very similar to what happened with Steve Jobs. 1. founder starts company 2. board replaces abrasive founder with operator 3. founder fully exits company (except for 1 share) 4. founder starts new company 5. original founder company nears bankruptcy 6. founder executes reverse take over of original company 7. founder revitalizes original company At the time, we were at step 2 with Dara becoming the CEO, now we're at step 4.
- yesplorer 7y ago
  Why did you need this code formatting to make your point? Now mobile users will have to scroll right to left to read your content. I doubt if that's the correct usage of this particular formatting style.
  - periya 7y ago
    Loads fine on mobile.
    - georgeplusplus 7y ago
      I am on iPhone and it does not for me
      - dzhiurgis 7y ago
        Rotate your phone
  - grogenaut 7y ago
    Is it their fault that code doesn't lay out well on mobile? Or hn? Is a forum poster responsible for the responsive design of their post on a site they don't control? Do you test your posts so they work well on my Nokia?
    - fossuser 7y ago
      If it isn’t code, don’t use the code formatter.
DonHopkins 7y ago
I can't decide which messiah complex requires more hubris: a Christ complex, or a Jobs complex. https://en.wikipedia.org/wiki/Messiah_complex https://en.wikipedia.org/wiki/Messiah_complex

blunderkid 7y ago

Or he is quite happy to have cashed out instead of wasting his life away trying to run a low (if any) margin, weak network effects business with local competitors and regulators nibbling at your sanity.

ArmandGrillet 7y ago
That doesn't fit what's portrayed in Super Pumped: The Battle for Uber, but only time will tell.
- utopian3 7y ago
  Is that book any more worthwhile to read than the dozens of articles that have been published since 2017? Debating adding it to my audiobook queue...
  - stingrae 7y ago
    Personally, I found it to be a rehash of all the articles since 2017. Even the structure of the book is like each chapter was an article about a set of events.
texasbigdata 7y ago
Weak network effects? That's not what I read in the prospectus! :)
bane 7y ago
It's kind of amazing that almost 100% of the Uber and Lyft rides I've taken in the last 6 months have had drivers/cars that work for both simultaneously. There only service distinction is which app you use to book the ride, the inventory and employees are all the same.
- Rebelgecko 7y ago
  I think they're trying to change that. They're both rolling out their own rewards programs to get Frequent Flyer program style loyalty
  - sriram_sun 7y ago
    Since it is travel season, I believe Lyft is offering 10x miles on your ride to the airport.
    - Rebelgecko 7y ago
      You can also link your Lyft account to both Delta and Hilton to earn a few points per dollar with them every time you take a ride. It's a good way to keep Hilton points from expiring if you don't stay at one very often.
- giancarlostoro 7y ago
  Yeah, my family members who were doing Uber were also doing Lyft. They preferred one over the other cause they got their money quicker.
- pbreit 7y ago
  Drivers definitely have a preference since the incentives are all volume based. Even riders generally skew to one preferred service.
- loftyai 7y ago
  It's interesting that you bring this up. Every time I take an uber or lyft (which is very often), I ask the driver which one they prefer. Around early 2019, I've noticed a lot of drivers say they get more business on uber, but prefer lyft. So, it seems like there is actually a noticeable distinction for the 2 services, at least from the driver's perspective.
  - xenospn 7y ago
    Uber slashed the driver pay a while ago. My friend stopped driving for them after that.
pbreit 7y ago
Uber’s core Rides business has huge margins and one of the most powerful network effects in business (that’s why you see only 1 or 2 neverchanging players in mature markets).
- mbesto 7y ago
  > Uber’s core Rides business has huge margins Source? And what do you mean by margins specifically? > one of the most powerful network effects in business Disagree. One result of a very strong network effect is that it means higher switching costs for customers/users. - Rider switching costs are near zero. For example, it's as simple as downloading a new app. If I switch from Facebook to Path (if it was still around), I have to re-establish all of my connections again, which is a massive amount of friction. - It has one of the frailest controls on its sourcing. Drivers switching costs are near zero (unless of course the drivers are sucked into preferential leasing by the rideshare company). Ridesharing will become a race to the bottom. Stronger network effects imply margin expansion (see what Facebook did to its gross margin circa 2013-2017).
  - OnlineGladiator 7y ago
    > Ridesharing will become a race to the bottom. Ridesharing has always been a race to the bottom, it's just been VC money keeping it afloat longer.
- colejohnson66 7y ago
  > Uber’s core Rides business has huge margins [citation needed]. They’re bleeding billions every year.
- Barrin92 7y ago
  the definition of a network effect is that the users themselves make the network more valuable, if the network effect is meaningful they do so in an exponential way and the network is hard to break up. Uber has virtually no network effects. One driver is just one more driver without any effect on other drivers or users, in contrast to say, user-driven content generation on tiktok or youtube. In fact, due to the natural constraints on supply in cities if anything there a negative effect to growing the business, which is of course why there has never been a taxi monopoly, to begin with, and transportation is a traditional small business, high competition sector. No offence and I don't intend to be rude but literally everything in your statement is comedically wrong. They don't make any money, there are no tech margins because drivers, regulation and advertisement cost pile up linearly, and the competition is brutal. How Uber got butchered by Didi in China is only one example of it, but the ride-sharing industry has had many victims already. Just look at bike-sharing in China.
fullshark 7y ago
His new business seems like it would have similar problems. Actually his new business seems like WeWork but for kitchens. https://www.cloudkitchens.com/ https://www.cloudkitchens.com/
- gscott 7y ago
  Commercial kitchens are more rare then empty office space because they require a lot of certifications and special equipment. Also if you are cooking food for the public then it has to be done in a commercial kitchen where for WeWork the alternative is to work from home...
  - JMTQp8lwXL 7y ago
    Prior to WeWork, many companies were (are) in the business of renting commercial real estate. CloudKitchen's bet is creating a huge valuation proposition by making securing a kitchen (as a restauranteur) as easy as provisioning resources on AWS. In a sense, there is some logic there, as restaurants in major cities come and go. There's some degree of food being subject to a fad boom/bust cycle. And as a customer, having access to a constantly rotating set of restaurants, as opposed to a much more static set of brick-and-mortar restaurants in your neighborhood -- maybe you're more likely to engage more with the whatever food delivery app CloudKitchen might eventually make, for it's continuing novelty in dining options.

kristianc 7y ago

I'm curious where you see the Apple-like margins at a business like Uber.

H8crilA 7y ago
They need to reach scale, margins will appear then /s
pbreit 7y ago
The 35% of the fare that Uber keeps has very little marginal expenses associated with it. Lyft’s contribution margin is over 50%.
georgeplusplus 7y ago
I don’t understand how people don’t get this. Taxi companies are profitable and they have employees, a fleet, garages. Uber is not profitable and does the same job as a taxi company. Doesn’t something seem wrong here? The reason drivers love Lyft is they pay more. They ph more because Lyft takes a bigger loss than Uber to stay competitive. That business model won’t last so Uber will outlast Lyft and then finally be on the road to profitability once the stupid Lyft price war ends. I’m baffled by people who think Uber cant make money. there’s no logic at all in that thought process. They also ignore the huge rnd cost uber is footing for self driving tech. I’m confident The sell off has nothing to do with kalanick spiting Uber and everything to do with him wanting to divest his interests so he can work on his other project
- jedberg 7y ago
  > Taxi companies are profitable and they have employees, a fleet, garages. They’re only profitable because of regulatory capture. The government gives them a monopoly and limits supply. If they offered unlimited medallions, taxis would lose money too.
  - georgeplusplus 7y ago
    Even against a government backed cab monopoly, Uber still has more market share in key markets like NYC. That’s kinda my point why the bear narrative doesn’t hold up.

admn2 7y ago

I thought about this too. Genuine question: how does him totally exiting his Uber positions add credence to this theory?

fossuser 7y ago
He expects things at Uber to get worse while he’s not there - if he comes back he can enter again at a lower price point.
kick 7y ago
After getting ousted from Apple, Jobs sold all of his Apple stock. After re-joining Apple, Jobs sold all of his Apple stock to play mind-tricks on the board (successfully, I might add).
- fastball 7y ago
  How did he sell all of his stock twice? When did he re-purchase?
  - kick 7y ago
    He didn't re-purchase. They bought NeXT and paid primarily in stock.

Ozzie_osman 7y ago

He reportedly did say something to that effect (he called it "Steve Jobs-ing it"): https://www.businessinsider.com/uber-ex-ceo-travis-kalanick-steve-jobs-ing-search-replacement-report-2017-7 https://www.businessinsider.com/uber-ex-ceo-travis-kalanick-... EDIT: abbreviation

lostlogin 7y ago
You’ve abbreviated it one too far. "Steve Jobs-ing it". Good find.

ping_pong 7y ago

Why would he go back into Uber when he exited with billions? It's obvious he doesn't have control over the company anymore, so he sold his stake and is moving on. It's the smart thing to do at this point, he has extracted as much as he possibly could, and instead of betting on the current management, he sold his stake and is betting on himself a second time through Cloud Kitchens, which is actually a good idea.

fossuser 7y ago
Why did Steve Jobs go back to Apple? Partly because NeXt was failing, but it was more than that. I suspect there’s a lot of similarity there with Travis, but in his case he may be in a better position.

joeblau 7y ago

I was saying this to my friend about 18 months ago. This process seems very similar to what happened with Steve Jobs. 1. founder starts company 2. board replaces abrasive founder with operator 3. founder fully exits company (except for 1 share) 4. founder starts new company 5. original founder company nears bankruptcy 6. founder executes reverse take over of original company 7. founder revitalizes original company At the time, we were at step 2 with Dara becoming the CEO, now we're at step 4.

yesplorer 7y ago
Why did you need this code formatting to make your point? Now mobile users will have to scroll right to left to read your content. I doubt if that's the correct usage of this particular formatting style.
- periya 7y ago
  Loads fine on mobile.
  - georgeplusplus 7y ago
    I am on iPhone and it does not for me
    - dzhiurgis 7y ago
      Rotate your phone
- grogenaut 7y ago
  Is it their fault that code doesn't lay out well on mobile? Or hn? Is a forum poster responsible for the responsive design of their post on a site they don't control? Do you test your posts so they work well on my Nokia?
  - fossuser 7y ago
    If it isn’t code, don’t use the code formatter.

DonHopkins 7y ago

I can't decide which messiah complex requires more hubris: a Christ complex, or a Jobs complex. https://en.wikipedia.org/wiki/Messiah_complex https://en.wikipedia.org/wiki/Messiah_complex