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First, they were gonna make the jump to be an autonomous robotaxi service, but that's going nowhere fast. Then they were going to be mobility service - cars, b

First, they were gonna make the jump to be an autonomous robotaxi service, but that's going nowhere fast. Then they were going to be mobility service - cars, bikes, scooters, everything would go through them. But no more. So what are they going to be now? Just milk their taxi service until Waymo, Tesla or whoever comes and wipes them off the market? Honestly, what are their long-term prospects? I've been staying away from Uber stock because they have a market cap of 50B. They're not going to be paying dividends, so what's going to make them be a 100-200B company?

gffrd 6y ago
This is what I want to know. Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc. I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices? It's just that you have to clear that point first, otherwise :pile of burning cash emoji:
- subsubzero 6y ago
  I think Uber is a lost cause, sorry to say but the food delivery business cannot be profitable for a majority of customers to where they will still pay for takeout. Their ATS service(self driving cars etc) was using stolen technology from waymo, now they are forced to using their own technologies they are way behind waymo, aurora, nuro, etc. Even ride hailing which is supposed to be their bread and butter is losing money, trying to up the ride costs and expect a huge drop in riders. Lastly Covid-19 joined the party, nobody wants to ride in a strangers car who could be infected (or visa-versa). This mindset of fear of the virus could take a year or so to subside, by then how much money will they have burnt?
  - rob_austin 6y ago
    The worst part is consumers have also lost because of uber. The promise of convenient, affordable transportation will not be delivered. Uber/Lyft rides will be more expensive than cab rides were because users have to support Uber's overhead.
    - sizzle 6y ago
      self driving cars are the answer, which are impervious to pandemics like coronavirus as an added bonus and will reduce the human death toll inflicted from motor-vehicle casualties at the hands of human drivers.
      - yabatopia 6y ago
        I'm not convinced that self driving cars are pandemic proof, on the contrary. Who's gonna desinfect the car seates and handles of an autonomous self driving car during a deadly pandemic? It's a lot safer to use your own car than a virus and bacteria ridden shared car used by God knows how many infected people. The customer isn't gonna clean it. So you need workers to clean and desinfect the car after every single ride. Even if you use robots, the cars must drive to the cleaning facility first, dramatically reducing their availability on the streets and profitability.
        wdb 6y ago
        Yes, I can't wait to buy a self driving car :)
  - valuearb 6y ago
    Ride hailing wasn’t losing money.
    - sceptical 6y ago
      Not only was it not losing money. It was actually quite profitable pre-covid.
- xnx 6y ago
  Even that monopoly-style strategy never made sense to me since the barrier to entry for a competitor to create a ride-coordination app is low (Lyft has made one, Google, certainly could) and the switching-cost to the end user is low (I have zero loyalty to Uber or Lyft).
- ghaff 6y ago
  >Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc. Though right now seems like a pretty good time to raise prices to the degree that they haven't already. I suspect that for some time to come those who can afford to do so will pay a significant premium to avoid public transit.
- Jommi 6y ago
  Why would you say they are underpriced?
- robbiep 6y ago
  For a long time ubers have been more expensive in sydney (which is known to be one of their most profitable markets) for many rides than taxis - there is an added convenience of Uber that taxis are only just catching up to (in terms of seeing where your ride is/wait time) but a fair percentage of the time I prefer taxis these days now - fixed price and the driver generally knows where he’s going instead of following a map and driving like a person who only got behind the wheel last week
- FabHK 6y ago
  > I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices? You forgot: drive sustainable incumbents out of business by undercutting them, even though you have higher actual cost, with VC subsidies.
Avshalom 6y ago
They were also going to be a global logistics/courier business.
dylan604 6y ago
The truth is now settling in that Uber was a dot bomb?
paulcole 6y ago
> First, they were gonna make the jump to be an autonomous robotaxi service Anyone who fell for this is a fool. Nobody could answer the question, “How is self-driving cheaper than exploiting human drivers like they are now?”
- ghaff 6y ago
  And, furthermore, assuming the availability of self-driving at the highest degree of difficulty--namely relatively dense cities.
- djannzjkzxn 6y ago
  The financial benefit seems pretty clear, conditional on self-driving tech working. The capital cost of the hardware would be amortized. Let’s say a driver costs $10/hour. If the self-driving car is active for 16 hours a day it saves you $58k a year in driver wages. Then over more years that number multiplies. It seems totally realistic for self driving tech to cost five figures per vehicle. With mass production the cost of hardware would go down like it always does. I also think it makes a lot of less driver-time-inefficient routes more viable, like driving someone from the city deep into the suburbs with little chance of a return fare. This grows the addressable market. There are also ethical, legal, and P.R. disadvantages to exploiting human drivers that seem to be getting more significant over time. Personally I’m not super optimistic about the near-term technical viability of self driving cars but it does seem to make Uber’s prospects look better to investors given some possible paths the future might take.
  - paulcole 6y ago
    So instead of paying a bunch of people $10/hour, Uber is going to pony up front for a huge number of vehicles and the staff it takes to maintain them? Or are scads of private owners going to hand over their car to Uber to run as AI-taxis for $10/hr?
    - djannzjkzxn 6y ago
      $10/hour is a rough estimate for the after expenses earnings for Uber drivers. The gross Uber pays is more like $16/hour so that’s the number to compare if you are going to look at Uber’s all-in cost to run a fleet. Using the 16 hours/day estimate it comes out to $93k a year of driver payments saved, which seems like it should easily pay for the purchase and maintenance of a car (especially if the car lasts multiple years). Uber has access to capital so they can handle the “up front” nature of the expense. Paying people to drive a car around all day is expensive and if Uber could avoid that they would have a better business.
opportune 6y ago
I've invested in uber so here's my take - If uber leaves growth mode and makes smarter investments in new services/markets, they can be profitable. They have positive margin on ridesharing in most markets. I believe uber eats could also earn money in the short term. And I want them to continue investing in last-mile delivery (which I believe they have canceled for now). Even though eats isn't earning a lot now, I believe that once all the money-burning food delivery startups go out of business and the market price for food delivery is no longer so depressed, it's a solid business Uber can make money on. I would prefer Uber just switch the business off in markets where it's impossible to turn a profit and just restart the networks/ecosystem once delivery prices normalize, but Uber is uniquely strong here because they are the only food delivery platform to also have a huge driver network they can easily tap into. Last mile delivery is also very synergistic with their business and IMO it's just something they need to spend time on getting right and building relationships with big partners. Once this, eats, and rideshare are all working well together you have a really synergestic business. I think if Uber can pass on the efficiency/demand gains from these three products working in tandem to drivers, they can also work towards building a stronger moat around their network. AV is the big unknown. However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch. Going from scratch is kind of risky, because it makes the whole venture dependent on the success of the vertical and requires good execution on getting people to actually use the service - it's much safer to simply sell the tech to automakers, rideshare, etc. since we know there is already demand for it there (I think there are also brand implications to Waymo/Google/Alphabet and Tesla that will make them hesitant to vertically integrate). Uber is of course also working on AV and in their case, they already have the messy business side of that vertical figured out, so I think their upside is a lot higher.
- latchkey 6y ago
  tl;dr: I've invested in uber so I'm going to give 4 paragraphs of bullish TA.
  - opportune 6y ago
    Well, I wouldn't have invested if I weren't bullish. Also this isn't TA: https://www.investopedia.com/terms/t/technicalanalysis.asp https://www.investopedia.com/terms/t/technicalanalysis.asp
Jommi 6y ago
They can still be the top level app for all of that. They just bought shares in Lime.
axguscbklp 6y ago
Here's what I don't get about the robotaxi stuff - did the company and the investors ever actually believe that the robotaxi stuff was even close to viable, or was it just a scam all along? To me it seems obvious that fully self-driving cars are almost certainly, at best, several decades away - and, if it turns out that fully self-driving technology really does require artificial general intelligence, it's quite plausible that humanity actually will never build fully self-driving cars. This isn't something that I've just realized recently - I've thought for several years now that full self-driving is almost certainly at best quite far away. How did it happen that thousands and thousands of rather smart people fell for the delusion that there was any realistic chance of implementing full self-driving any time soon? Of course it's not just Uber in question, it's also Tesla, Waymo, and so on.
- untog 6y ago
  > did the company and the investors ever actually believe that the robotaxi stuff was even close to viable IMO, absolutely. The hype for self driving cars a few years ago was massive. I forget who, but a prominent SV investor offered to make a bet with someone that self-driving taxis would be on the road in five years. There was plenty of it in HN, too. That's the investors. Did Travis think so too? The insane amounts of money they spent on acquisitions and developing the tech suggests yes: they were trying to be first to a huge potential market. But maybe he was doing all that to scam investors, who can tell.
  - epistasis 6y ago
    I think all the self-driving cars hysteria was just momentum from the hype of deep learning advances. I remember thinking about the idea of self driving cars within 10 years, "this seems crazy, but I guess I've been wrong before...". A few years later it seems even crazier. But I've also been wronger than that... There were (are?) people talking about Artificial General Intelligence being just around the corner, which is a sign of people buying way too much into the hype cycle.
    - api 6y ago
meritt 6y ago
> I've been staying away from Uber stock because they have a market cap of 50B Not defending Uber here in the slightest, but given your post history on Tesla, I find it amusing you think Uber's market cap is egregious
- jlbnjmn 6y ago
  Why is it amusing? Not the commenter you responded to, but am bullish on Tesla and bearish on Uber. I don't see the parallels between Uber, a taxi broker, and Tesla, a vertically integrated energy and automotive company. What is your perspective? Why is Uber worth $50B and Tesla overvalued?
  - meritt 6y ago
    > Why is it amusing? Because Uber's market cap is indeed egregious, but not nearly as inflated as Tesla. So it's amusing when people like yourself rationally find issue with Uber, but cannot find any flaw in the valuation of Tesla.
chrischen 6y ago
Did they actually announce that they were going to do autonomous robo-taxis? I always thought their R&D in self-driving was mostly defensive, and that it was random other people assuming they were going to be autonomous. It just seems their core product has always been their marketplace of drivers. Any investments in autonomous tech would have been behind Google anyways.
ashtonkem 6y ago
Scooters were just as dubious as their robo-taxi business. Bird has basically no path to profitability, there is no obvious reason why Uber would be able to turn a profit with scooters either, especially since Uber never had a deep operations bench.
someonehere 6y ago
Somewhere on reddit I saw an info graphic showing what parts of the US were dominated by food delivery businesses. Uber Eats was apparently the top delivery service in the Georgia region. I don’t recall them being anywhere else. I have this weird feeling with people ordering out food, Uber could easily shift to being a delivery service. 1) You keep your fit economy workers employed. 2) They have an app to tell them where to go from point a to point b for deliveries. 3) People are shipping more things across town and social distancing. Honestly for what I do for my job, I’d rather pay an Uber to pick up the equipment I need to ship out biweekly and take it to UPS to get boxed and shipped. Sort of a TaskRabbit for deliveries. The whole bad image Uber gets for drivers sexually assaulting passengers or even attacking passengers goes away.
- SyneRyder 6y ago
  Is Uber not already in the delivery business in the US? In Australia, Uber Eats grew 3x post Coronavirus, and they even landed contracts with our two biggest supermarket chains to fill the gaps in their home grocery delivery services. Both companies didn't have enough trucks or drivers to meet the surge in demand: https://thenewdaily.com.au/finance/consumer/2020/04/27/woolworths-uber-delivery-shopping/ https://thenewdaily.com.au/finance/consumer/2020/04/27/woolw... And three weeks ago, Uber Australia launched Uber Connect, a parcel delivery service. They're running a promotion for Mother's Day - since we're still meant to be distancing from the elderly, you can use Uber Connect to deliver a home-made package to your Mom same day, faster than the postal system (which has just about collapsed in Australia). https://www.uber.com/en-AU/newsroom/uberconnect-2/ https://www.uber.com/en-AU/newsroom/uberconnect-2/ So what you're suggesting Uber try has already happened in foreign markets - I'm surprised if Uber US hasn't already built that out there.

gffrd 6y ago

This is what I want to know. Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc. I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices? It's just that you have to clear that point first, otherwise :pile of burning cash emoji:

subsubzero 6y ago
I think Uber is a lost cause, sorry to say but the food delivery business cannot be profitable for a majority of customers to where they will still pay for takeout. Their ATS service(self driving cars etc) was using stolen technology from waymo, now they are forced to using their own technologies they are way behind waymo, aurora, nuro, etc. Even ride hailing which is supposed to be their bread and butter is losing money, trying to up the ride costs and expect a huge drop in riders. Lastly Covid-19 joined the party, nobody wants to ride in a strangers car who could be infected (or visa-versa). This mindset of fear of the virus could take a year or so to subside, by then how much money will they have burnt?
- rob_austin 6y ago
  The worst part is consumers have also lost because of uber. The promise of convenient, affordable transportation will not be delivered. Uber/Lyft rides will be more expensive than cab rides were because users have to support Uber's overhead.
  - sizzle 6y ago
    self driving cars are the answer, which are impervious to pandemics like coronavirus as an added bonus and will reduce the human death toll inflicted from motor-vehicle casualties at the hands of human drivers.
    - yabatopia 6y ago
      I'm not convinced that self driving cars are pandemic proof, on the contrary. Who's gonna desinfect the car seates and handles of an autonomous self driving car during a deadly pandemic? It's a lot safer to use your own car than a virus and bacteria ridden shared car used by God knows how many infected people. The customer isn't gonna clean it. So you need workers to clean and desinfect the car after every single ride. Even if you use robots, the cars must drive to the cleaning facility first, dramatically reducing their availability on the streets and profitability.
      - wdb 6y ago
        Yes, I can't wait to buy a self driving car :)
- valuearb 6y ago
  Ride hailing wasn’t losing money.
  - sceptical 6y ago
    Not only was it not losing money. It was actually quite profitable pre-covid.
xnx 6y ago
Even that monopoly-style strategy never made sense to me since the barrier to entry for a competitor to create a ride-coordination app is low (Lyft has made one, Google, certainly could) and the switching-cost to the end user is low (I have zero loyalty to Uber or Lyft).
ghaff 6y ago
>Ridesharing fares are obviously underpriced … and if they were raised 30% to make them sustainable, it becomes "not worth it" for a good chunk of people who use ridesharing as a supplement to car, bus, transit, etc. Though right now seems like a pretty good time to raise prices to the degree that they haven't already. I suspect that for some time to come those who can afford to do so will pay a significant premium to avoid public transit.
Jommi 6y ago
Why would you say they are underpriced?
robbiep 6y ago
For a long time ubers have been more expensive in sydney (which is known to be one of their most profitable markets) for many rides than taxis - there is an added convenience of Uber that taxis are only just catching up to (in terms of seeing where your ride is/wait time) but a fair percentage of the time I prefer taxis these days now - fixed price and the driver generally knows where he’s going instead of following a map and driving like a person who only got behind the wheel last week
FabHK 6y ago
> I assume the strategy is a long-play to have people + communities become wholly dependent on your services (they skip buying cars, skip learning to drive, transit fails to evolve further), then once they are, ratchet up the prices? You forgot: drive sustainable incumbents out of business by undercutting them, even though you have higher actual cost, with VC subsidies.

Avshalom 6y ago

They were also going to be a global logistics/courier business.

dylan604 6y ago

The truth is now settling in that Uber was a dot bomb?

paulcole 6y ago

> First, they were gonna make the jump to be an autonomous robotaxi service Anyone who fell for this is a fool. Nobody could answer the question, “How is self-driving cheaper than exploiting human drivers like they are now?”

ghaff 6y ago
And, furthermore, assuming the availability of self-driving at the highest degree of difficulty--namely relatively dense cities.
djannzjkzxn 6y ago
The financial benefit seems pretty clear, conditional on self-driving tech working. The capital cost of the hardware would be amortized. Let’s say a driver costs $10/hour. If the self-driving car is active for 16 hours a day it saves you $58k a year in driver wages. Then over more years that number multiplies. It seems totally realistic for self driving tech to cost five figures per vehicle. With mass production the cost of hardware would go down like it always does. I also think it makes a lot of less driver-time-inefficient routes more viable, like driving someone from the city deep into the suburbs with little chance of a return fare. This grows the addressable market. There are also ethical, legal, and P.R. disadvantages to exploiting human drivers that seem to be getting more significant over time. Personally I’m not super optimistic about the near-term technical viability of self driving cars but it does seem to make Uber’s prospects look better to investors given some possible paths the future might take.
- paulcole 6y ago
  So instead of paying a bunch of people $10/hour, Uber is going to pony up front for a huge number of vehicles and the staff it takes to maintain them? Or are scads of private owners going to hand over their car to Uber to run as AI-taxis for $10/hr?
  - djannzjkzxn 6y ago
    $10/hour is a rough estimate for the after expenses earnings for Uber drivers. The gross Uber pays is more like $16/hour so that’s the number to compare if you are going to look at Uber’s all-in cost to run a fleet. Using the 16 hours/day estimate it comes out to $93k a year of driver payments saved, which seems like it should easily pay for the purchase and maintenance of a car (especially if the car lasts multiple years). Uber has access to capital so they can handle the “up front” nature of the expense. Paying people to drive a car around all day is expensive and if Uber could avoid that they would have a better business.

opportune 6y ago

I've invested in uber so here's my take - If uber leaves growth mode and makes smarter investments in new services/markets, they can be profitable. They have positive margin on ridesharing in most markets. I believe uber eats could also earn money in the short term. And I want them to continue investing in last-mile delivery (which I believe they have canceled for now). Even though eats isn't earning a lot now, I believe that once all the money-burning food delivery startups go out of business and the market price for food delivery is no longer so depressed, it's a solid business Uber can make money on. I would prefer Uber just switch the business off in markets where it's impossible to turn a profit and just restart the networks/ecosystem once delivery prices normalize, but Uber is uniquely strong here because they are the only food delivery platform to also have a huge driver network they can easily tap into. Last mile delivery is also very synergistic with their business and IMO it's just something they need to spend time on getting right and building relationships with big partners. Once this, eats, and rideshare are all working well together you have a really synergestic business. I think if Uber can pass on the efficiency/demand gains from these three products working in tandem to drivers, they can also work towards building a stronger moat around their network. AV is the big unknown. However I find it much more plausible that Waymo and Tesla will vendor out the details of the rideshare service rather than build their own from scratch. Going from scratch is kind of risky, because it makes the whole venture dependent on the success of the vertical and requires good execution on getting people to actually use the service - it's much safer to simply sell the tech to automakers, rideshare, etc. since we know there is already demand for it there (I think there are also brand implications to Waymo/Google/Alphabet and Tesla that will make them hesitant to vertically integrate). Uber is of course also working on AV and in their case, they already have the messy business side of that vertical figured out, so I think their upside is a lot higher.

latchkey 6y ago
tl;dr: I've invested in uber so I'm going to give 4 paragraphs of bullish TA.
- opportune 6y ago
  Well, I wouldn't have invested if I weren't bullish. Also this isn't TA: https://www.investopedia.com/terms/t/technicalanalysis.asp https://www.investopedia.com/terms/t/technicalanalysis.asp

Jommi 6y ago

They can still be the top level app for all of that. They just bought shares in Lime.

axguscbklp 6y ago

Here's what I don't get about the robotaxi stuff - did the company and the investors ever actually believe that the robotaxi stuff was even close to viable, or was it just a scam all along? To me it seems obvious that fully self-driving cars are almost certainly, at best, several decades away - and, if it turns out that fully self-driving technology really does require artificial general intelligence, it's quite plausible that humanity actually will never build fully self-driving cars. This isn't something that I've just realized recently - I've thought for several years now that full self-driving is almost certainly at best quite far away. How did it happen that thousands and thousands of rather smart people fell for the delusion that there was any realistic chance of implementing full self-driving any time soon? Of course it's not just Uber in question, it's also Tesla, Waymo, and so on.

untog 6y ago
> did the company and the investors ever actually believe that the robotaxi stuff was even close to viable IMO, absolutely. The hype for self driving cars a few years ago was massive. I forget who, but a prominent SV investor offered to make a bet with someone that self-driving taxis would be on the road in five years. There was plenty of it in HN, too. That's the investors. Did Travis think so too? The insane amounts of money they spent on acquisitions and developing the tech suggests yes: they were trying to be first to a huge potential market. But maybe he was doing all that to scam investors, who can tell.
- epistasis 6y ago
  I think all the self-driving cars hysteria was just momentum from the hype of deep learning advances. I remember thinking about the idea of self driving cars within 10 years, "this seems crazy, but I guess I've been wrong before...". A few years later it seems even crazier. But I've also been wronger than that... There were (are?) people talking about Artificial General Intelligence being just around the corner, which is a sign of people buying way too much into the hype cycle.
  - api 6y ago

meritt 6y ago

> I've been staying away from Uber stock because they have a market cap of 50B Not defending Uber here in the slightest, but given your post history on Tesla, I find it amusing you think Uber's market cap is egregious

jlbnjmn 6y ago
Why is it amusing? Not the commenter you responded to, but am bullish on Tesla and bearish on Uber. I don't see the parallels between Uber, a taxi broker, and Tesla, a vertically integrated energy and automotive company. What is your perspective? Why is Uber worth $50B and Tesla overvalued?
- meritt 6y ago
  > Why is it amusing? Because Uber's market cap is indeed egregious, but not nearly as inflated as Tesla. So it's amusing when people like yourself rationally find issue with Uber, but cannot find any flaw in the valuation of Tesla.

chrischen 6y ago

Did they actually announce that they were going to do autonomous robo-taxis? I always thought their R&D in self-driving was mostly defensive, and that it was random other people assuming they were going to be autonomous. It just seems their core product has always been their marketplace of drivers. Any investments in autonomous tech would have been behind Google anyways.

ashtonkem 6y ago

Scooters were just as dubious as their robo-taxi business. Bird has basically no path to profitability, there is no obvious reason why Uber would be able to turn a profit with scooters either, especially since Uber never had a deep operations bench.

someonehere 6y ago

Somewhere on reddit I saw an info graphic showing what parts of the US were dominated by food delivery businesses. Uber Eats was apparently the top delivery service in the Georgia region. I don’t recall them being anywhere else. I have this weird feeling with people ordering out food, Uber could easily shift to being a delivery service. 1) You keep your fit economy workers employed. 2) They have an app to tell them where to go from point a to point b for deliveries. 3) People are shipping more things across town and social distancing. Honestly for what I do for my job, I’d rather pay an Uber to pick up the equipment I need to ship out biweekly and take it to UPS to get boxed and shipped. Sort of a TaskRabbit for deliveries. The whole bad image Uber gets for drivers sexually assaulting passengers or even attacking passengers goes away.

SyneRyder 6y ago
Is Uber not already in the delivery business in the US? In Australia, Uber Eats grew 3x post Coronavirus, and they even landed contracts with our two biggest supermarket chains to fill the gaps in their home grocery delivery services. Both companies didn't have enough trucks or drivers to meet the surge in demand: https://thenewdaily.com.au/finance/consumer/2020/04/27/woolworths-uber-delivery-shopping/ https://thenewdaily.com.au/finance/consumer/2020/04/27/woolw... And three weeks ago, Uber Australia launched Uber Connect, a parcel delivery service. They're running a promotion for Mother's Day - since we're still meant to be distancing from the elderly, you can use Uber Connect to deliver a home-made package to your Mom same day, faster than the postal system (which has just about collapsed in Australia). https://www.uber.com/en-AU/newsroom/uberconnect-2/ https://www.uber.com/en-AU/newsroom/uberconnect-2/ So what you're suggesting Uber try has already happened in foreign markets - I'm surprised if Uber US hasn't already built that out there.