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Google Ventures Puts $258M Into Uber, Its Largest Deal Ever

244 points by linux_devil 13y ago

qntmfred 13y ago
self-driving taxis, here we come
- yoshyosh 13y ago
  This is interesting because if we think, 100 years from now, on demand transportation could be the most efficient way to go. Now Lyft, Uber's biggest threat, has been winning market share by being the ride for the common man and focusing on community. If that is Lyft's biggest strength, what happens to Lyft when self driving taxis are the most obvious solution to transportation.
yapcguy 13y ago
> "The $258 million is a 86% chunk of Google Ventures’ $300 million dollar a year fund, and its unclear as to whether the firm will continue to make such sizable investments." So a towncar hire service, with an app, is worth over $3bn ? Really?! Maybe there's one or two other metropolitan cities in the US where the taxi service isn't up to scratch, but where is the growth going to come from? I doubt whether regulators and taxi unions in London, Tokyo or Hong Kong would sit idly by when some Silicon Valley kool-aid types come knocking.
- blueprint 13y ago
  Haven't you heard? They're doing helicopters now too.
- psbp 13y ago
  Now they have a quarter million more in leverage.
- garry 13y ago
  People spend $10B on taxis per year in the United States alone. Smartphone adoption is going to reach 100%. I think if you put those two together, you really can't pigeonhole this type of service as "just another Silicon Valley app."
  - deleted 13y ago
    [deleted]
  - samstave 13y ago
    * Build out the technology so that every existing cab service can license and whitelabel * Build out the service so that Uber is the central dispatch to any ride option based on price - also playing into the whitelabel/building of tech * Provide Uber a significant fund with which to seek M&As of existing taxi cos all over the place * Provide an investment sizeable enough to serve as national/global free PR for the service, investment * Provide an investment large enough to back a significant legal team that can take on any metro taxi service's bitching * Provide an investment large enough to lobby the hell out of local/national representation
- Me1000 13y ago
  Even when taxis are readily available I still prefer Uber. UberX is cheaper than a cab for many thing and it's much less hassle. I get in, the driver drives, then I get out... no fumbling with cash or swiping cards, signing things, and worrying about tips. In San Francisco I can even get a yellow taxi cab via Uber. Is it worth $3B? I don't know... but it's certainly not as insane as some other valley companies.
- jfoster 13y ago
  Combine it with Google's autonomous vehicle technology, and you can begin to envisage a future where the idea of owning your own car with ~5% utilization is viewed as ridiculous, or at least an unnecessary luxury.
  - potatolicious 13y ago
    That may be true, but we're at least a few years away from Google's autonomous vehicles being on the road, much less mass adoption. Even longer for vehicle ownership patterns in the US to change dramatically enough that an autonomous-car-hire service will eat the world. It may happen, but there is such an enormous gap of time between then and now that I wouldn't exactly be picking winners just yet.
    - jfoster 13y ago
      By the most optimistic timeframe, it sounds like Google might be ready as soon as 2.5 years from now. (based on this article: http://www.extremetech.com/extreme/147940-google-self-driving-cars-in-3-5-years-feds-not-so-fast http://www.extremetech.com/extreme/147940-google-self-drivin...) They might now be at the point where they have to pick a winner to start integrating. Their engineers have already been driving these things around for years. They probably already have a v1.0 release date in mind.
      - potatolicious 13y ago
        But why Uber? Uber isn't really a tech company, in the same way Amazon isn't really a tech company. The Secret Sauce(tm) behind Uber is logistics - in managing a highly fluid workforce, dispatching, etc. Not much of which transfers into this post-human-driver world. I like Uber, but I don't think Uber being Uber really confers a large advantage over new entrants when the autonomous cars become reality. It would seem to me that, when the time comes, any number of companies run by reasonably talented people with capital backing can start a car service. Uber's edge applies to their human-driver business.
        13y ago
- deleted 13y ago
  [deleted]
- jpalomaki 13y ago
  Maybe they are therefore taking this to markets where the taxi business is more open to competition and not so tightly regulated. I see great opportunities here as they are not limited to traditional taxi services. Once you have the infrastructure in place, you can for example start doing something that is between traditional taxi and tradinaional public transportation (in Finland there are trials running for this kind of system[1]). And once you have self driving cars, it would be interesting to evolve into car sharing scheme style of things [2], where can summon a car to your door with smart phone app. [1] https://kutsuplus.fi/tour https://kutsuplus.fi/tour [2] http://www.citycarclub.co.uk/ http://www.citycarclub.co.uk/
- csomar 13y ago
  I guess this has to do with Google self-driving cars. Maybe they are envisaging to replace taxi drivers in the future; and having a seat in Uber will definitively help them.
- hsuresh 13y ago
  That is the beauty of services that are easy to sell. Everything is fairly clear, it is "just" a matter of execution at scale - i know i am oversimplifying the execution bit, but most startups have trouble figuring out the product-market fit, and even if they do, often have markets that are small.
- kenshiro_o 13y ago
  That is some seriously high valuation given Uber's current (and even projected) numbers. But I understand what Google is trying to do. I would agree that the self driving car business will take a lot longer than we think even in places like Silicon Valley. Still it is a plausible future although I believe people will still like taking taxis. Disclaimer: I will be working for Hailo soon, the London start-up which is Uber's competitor. I believe both companies have their strengths and tackle different bands of the same market.
onedev 13y ago
You know what, Uber is awesome. Congrats to those guys and gals. I think Uber will evolve to become a service that even regular people can use, not just a speciality service for the relatively wealthy tech community (though it is necessary to start out as such; ala Tesla). I also think that taxis aren't the only thing that it will offer in the future. There is a wealth of potential for what they can do. They sometimes do fun one-off Ubers like Helecopters or Ice Cream Trucks which don't quite capture this potential but shows us that they realize that there's much more to experiment with and that they're not afraid to experiment. Imagine when we have self driving vehicles (which, incidentally Google is helping develop).
- dailyrorschach 13y ago
  I'd say that among people who take cabs, not necessarily wealthy, Uber is growing fantastically in some markets. Here in DC - almost everyone I know prefers and uses Uber now.
  - mattmcknight 13y ago
    Uber in DC is under attack from the government. "DCTC passed a new set of regulations which bans mid-sized, fuel-efficient vehicles from being hired, as well as places color restrictions on those cars." http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-commission-square-off-in-new-fight-92966.html http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-co...
    - dailyrorschach 13y ago
      I think Uber is pretty safe in DC. UberX is under attack in DC. The Limo/livery (black car and SUVs) businesses is now well protected by DC law and the definitions passed earlier this year. The DCTC rules will classify the UberX hybrid vehicles as Sedans and subject to the new rules. However, Uber has secured enough allies in the DC Council, including the DC Transportation CMTE Chair. I've watched this fight play out a few times now, and I think the worst case scenario is no UberX through the end of 2013 prior to the next set of DCTC rule-making or council intervention. Uber rightly gins everyone up in DC about these issues, but the truth is they've done a great job in this market attracting the right allies and have been consistently winning their battles.
alariccole 13y ago
This makes perfect sense, and if I had money to invest in this market, I would. Self-driving cars coupled with such an infrastructure means a very profitable business in the not-too-distant future. The highest cost for taxis is not the cars, nor the gas, but the drivers. Get rid of them, and it's all gravy. Something like this is most certainly the "mass" transit of the future. It would be lower cost, more convenient, and would actually pollute less than buses during non-peak times.
- garindra 13y ago
  >> The highest cost for taxis is not the cars, nor the gas, but the drivers. Do you have any source on this?
  - rescripting 13y ago
    It's almost self evident. Does a car cost > 30k a year? Does gas? Just like software engineering, the biggest cost in the taxi game is labour. Edit: Maybe I goofed, mattmcknight accurately points out that in many cities the taxi medallion is the most expensive part of the taxi equation. I'm not intimately familiar with Uber; do drivers still have to obtain medallions in their respective cities?
    - sliverstorm 13y ago
      On the subject of medallions, last I heard that was a point of contention. Uber has been operating without them, and taxi companies don't like that. You play by the rules and pay a huge lump sum to be allowed to operate, and then some guy comes along and undercuts you because HE doesn't have to pay that lump sum? You wouldn't like that either.
      - jdh 13y ago
        Medallions required to pick people up on the street. Über is classified as a limo -- pre booked, no curbside pickup. Los dint need medallions. However, the structure was created for old style limos: I.e. fat cat or prom kid books for hours, days in advance, not competitive with a taxi. One could reasonably argue booking an uber 1 minute before pickup for a ten minute ride is a lot more like a taxi than a limo.
psbp 13y ago
A big piece of google's continued growth is going to be in mobile commerce. Take offers, maps, search and self-driving cars and put them into an amalgamated new product. Google's future is an ecological approach.
greendata 13y ago
Regulation is the biggest obstacle with Uber. The Taxi services have the city regulators in their pockets. Google, with their influence and money, may help solve Uber's biggest issue.
- arsenerei 13y ago
  It looks likely to not be a problem in California shortly. http://techcrunch.com/2013/07/30/california-regulator-proposes-new-ride-sharing-rules-in-a-victory-for-uber-lyft-and-sidecar/ http://techcrunch.com/2013/07/30/california-regulator-propos...
  - gojomo 13y ago
    The federal FTC has also indicated it considers some of the state/local transport regulatory regimes anti-competitive, though it's not clear they have any legal authority to interfere with local determination.
mistercow 13y ago
I can't help but wonder if it might have been wise for them to wait until they had widespread approval and adoption of self-driving cars. Completely disrupting mass transit will threaten a very large number of people's bottom lines, and many of those people have the ability to make things difficult for Google. Not least among these are auto manufacturers.
- psbp 13y ago
  This is an angel investment. Google is bolstering Uber, not competing directly.
  - mistercow 13y ago
    Even so, I wonder if they might do better not to draw attention to the disaster that "easy car sharing (or similar concepts)" + "self-driving car" could be for car sales. Maybe I'm underestimating car companies in assuming that the haven't already anticipated this (although in that case, why aren't we seeing resistance), or maybe Google holds them in even lower esteem.
    - chromaton 13y ago
      My guess is that the car companies haven't figured this out. It takes two steps of reasoning: 1. Figuring out that self-driving cars are practical in the medium term and 2. Figuring out that widespread availability of self-driving cars means that people might not want to own their own.
      - mistercow 13y ago
        Here's hoping that they, like many others before them, flinch away from the mental pain of noticing that their business model is about to crumble until it's too late.
  - joshu 13y ago
    Venture investment.
clamprecht 13y ago
Wow, corrupt governments everywhere, kiss your corruption goodbye.
malandrew 13y ago
It would be awesome if they next look at Lit Motors or a similar safe 1-2 person pod. Lit Motors + Über + Self-driving cars is total win. Once you get rid of the driver all you really need are 1-2 seats for most black car service and taxi rides
benologist 13y ago
This year will be remembered as the first year TechCrunch failed to break any major stories.
- deleted 13y ago
  [deleted]
physcab 13y ago
Uber makes absurd amounts of money. I've had many conversations with drivers and they claim to be pulling in $35-$45 per hour after uber's 30% cut. I've talked to drivers who have quit their full time jobs and love it. Some have said that because the service is so convenient that people have started using it as a walking replacement, often opting to catch a cab for 5 blocks. Lastly, many companies have enterprise uber accounts and will happily pay their employee's $200 cab rides to the airport or even 45 minute drive home.
- graeme 13y ago
  I live in Montreal, so I"ve never been able to use Uber. What makes it different from a cab? In Montreal, cab to the airport costs $50. Cab arrives in about 1-2 minutes most locations, and drives you there as fast as taxis go. I don't doubt that Uber's great - this is a serious question. How much of a premium do people pay, and what are the main benefits in cities that already have developed taxi networks?
  - maxmcd 13y ago
    Mostly their logistical advancements. You can rate drivers, you can ask for a driver in advance, you can track the drivers location. They actively plot what parts of town have high traffic, and at what times. This in general leads to a significantly improved experience over cabs, or other drivers. They seem to be always there when you want them, the drivers are always nice and very knowledgeable, etc..
  - jhenkens 13y ago
    In many US cities, you can get UberX for about the price of a cab, Uber about 1.25-1.5 that. However, when you call a cab, it often takes 5-20 minutes, you have no idea who is picking you up, and often times they wont even show up if you aren't at a hotel. Uber you know exactly how long and who will be picking you up, and you can track them.
    - ovoxo 13y ago
      > "5-20 minutes" - Sure. That does depend on where you are though. > "You have no idea who is picking you up" - 99% of the time this is a moot point. > "Often times they wont even show up if you aren't at a hotel" - I've never encountered this in my entire life.
w3pm 13y ago
"Given the scale of the cash injection, the company might not have to raise another series round before going public, though a bridge round isn’t inconceivable." Why does a company need to raise so-much-money before going public? Isn't the whole point of "going public" to raise money?
- maxmcd 13y ago
  Wouldn't the logic instead be that when they wanted to raise money again that it would be at an IPO-level. Not that this round is necessarily driving them towards an IPO, except in the sense that it's leading them to be big enough for one.
- fpgeek 13y ago
  I'd say that the point of "going public" is to provide liquidity to existing shareholders (e.g. founders, employees, outside investors). There are other ways to raise money, if that's all you want.
  - backprojection 13y ago
    Sorry, I don't know anything about finance/business. What you say makes some sense to me, that going public lets initial investors cash out, if they so wish. But I'm still confused, why not sell public shares from the get-go. Is it that it's easier to make your case (for investment) to a VC than it is to Joe public?
    - deleted 13y ago
      [deleted]
    - mbreese 13y ago
      One reason is overhead. Being a publicly traded company involves lots of legal filings and paperwork ($$$). Typically, you want to stay private for as long as you can. For example, Facebook only went public when they were legally obligated to because they had reached the limit on private shareholders. (I'm not saying that was the only reason, but it was a factor in the timing)
flyinglizard 13y ago
This is an incredible move on Google's part. Uber can be seen as the physical arm of Google in meatspace; imagine having your flight information come up in Google Now with a button to summon an Uber car. I look into the future and I primarily see "Google".
- ngoel36 13y ago
  From my understanding, Google and Google Ventures are 100% independent.
  - cyanbane 13y ago
    Minus those 6 characters, of course. Those 6 characters mean a lot to everyone outside that bit of knowledge.
  - gojomo 13y ago
    I've seen alternate stories about GV which seem to want to have it both ways – some that imply an ability for GV to bring in Google staff/expertise to help investments, and others vaguely implying a more strict separation. This page... http://www.googleventures.com/investing http://www.googleventures.com/investing ...touts "Uparallelled Access to Google", and supposedly GV won its share in Uber's round with the help of direct lobbying from Larry Page. So GV may be ostensibly empowered to seek return without regard to Google's other objectives... but it doesn't appear there's a "Chinese Wall". If theoretically the GV partners wanted to do something Larry Page absolutely didn't want, I'm not sure I'd bet on the GV partners having their way.
  - canttestthis 13y ago
    Not 100% apparently. > “If a company comes in the door and it looks like something important for Google to acquire,” says Maris, “we will defer to Google’s corporate development department to take a look.” http://techcrunch.com/2009/04/04/the-google-ventures-cheat-sheet/ http://techcrunch.com/2009/04/04/the-google-ventures-cheat-s...
ovoxo 13y ago
So, you do all realize that this was an investment (of less than 10%) and not an acquisition right? Everyone here is talking about how this plays right into Google's plans - no. With their stake, Google does not have enough leverage to direct what direction Uber should be moving in.
lpolovets 13y ago
A lot of people are commenting about Uber + self-driving cars. What's the point of Uber if there are self-driving cars? Doesn't the existence of fully automated, driverless cars kill the value of Uber's driver network while equaling or surpassing Uber's no-hassle experience? I think what I'm saying is: if Google actually created a fleet of driverless cars, would anyone still use Uber?
- mandeepj 13y ago
  This can be written as another law of newton - if there are driver less cars it does not mean everyone will have driver less cars :-)
- siglesias 13y ago
  I think the idea is that you would not have to own, maintain, and park a car if you could summon one on a whim.
  - lpolovets 13y ago
    I definitely get the appeal and the value of that kind of future. It just feels like "driverless cars + simple Google-made reservation app" would send Uber's value down to zero. So if driverless fleets of cars are the future that Google is aiming for, then why invest in Uber? What does Uber currently have that would still be valuable in that future?
    - siglesias 13y ago
      Probably the operational expertise in efficiently getting cars to pick up and drop off people at arbitrary points throughout a city. They're building that expertise right now with human drivers.
      - acchow 13y ago
        Organizing human operators and delegating machines are expertise that have almost zero in common.
NN88 13y ago
Basically Uber-driverless cars?
jasonmoo 13y ago
Step one: buy car service Step two: replace drivers with computers Step three: profit, optimize traffic patterns from within the swarm, decrease accidents, increase fuel efficiency, etc.
logn 13y ago
Will a web-bot be able to automatically order self-driving cars to pick up robots so they can peaceably assemble outside Utah data centers?
perfmode 13y ago
For those who find this new baffling: Uber operates in the following cities: 1 AMSTERDAM 2 ATLANTA 3 BALTIMORE 4 BERLIN 5 BOSTON 6 CHICAGO 7 DALLAS 8 DENVER 9 DETROIT 10 HAMPTONS 11 HONOLULU 12 INDIANAPOLIS 13 JOHANNESBURG 14 LONDON 15 LOS ANGELES 16 LYON 17 MELBOURNE 18 MEXICO CITY 19 MILAN 20 MINNEAPOLIS 21 MUNICH 22 NEW YORK CITY 23 ORANGE COUNTY 24 PARIS 25 PHILADELPHIA 26 PHOENIX 27 PROVIDENCE 28 ROME 29 SACRAMENTO 30 SAN DIEGO 31 SAN FRANCISCO 32 SEATTLE 33 SEOUL 34 SHANGHAI 35 SINGAPORE 36 STOCKHOLM 37 SYDNEY 38 TAIPEI 39 TORONTO 40 WASHINGTON D.C. 41 ZURICH
- gwynp 13y ago
  I had a look at their careers page - that list will be expanding quite a bit soon.
jfornear 13y ago
Guber http://imgur.com/Klr7cHY http://imgur.com/Klr7cHY
revorad 13y ago
Travis Kalanick is the definition of relentless - http://www.youtube.com/watch?v=2QrX5jsiico http://www.youtube.com/watch?v=2QrX5jsiico
cwilson 13y ago
Is it not weird that Google Ventures also invested in Sidecar? Isn't that a conflict of interest?
- fsckin 13y ago
  Sounds like they're betting on two horses in the race.
- robk 13y ago
  Or just a long-term bet against individual/personal car ownership.
fsckin 13y ago
Should have been 256M for a nice round number.
mason240 13y ago
Looking at the Uber website, they refer the the Twin Cities as Minneapolis, even though their service area includes St Paul and Minneapolis. That's a deal killer for me.
arbuge 13y ago
Aside: the quality of comments on Techcrunch seems to have really deteriorated with their current comment system.
unz 13y ago
This is kind of silly. If Google launched it's own uber with the google brand on it, it would easily trump uber. Developing the the uber software would cost way way less than $250 million. These large companies are throwing a lot of money away on stupid acquisitions. (It makes sense in social networking, but not with something like uber which isn't a network effects company).
dcpdx 13y ago
Love Uber. After using it for over a year, just had my first negative experience this past weekend in SF when the UberX driver had no clue how to get from SOMA to Ocean Beach. I left negative feedback and in a few hours got a response from one of their customer experience folks apologizing for the poor service and refunding my money for the trip. Service like that is why I'll always choose Uber over alternatives like Lyft, Sidecar, etc.
cheez0r 13y ago
Anyone else see Google lining up Uber to get bought, so that they can consolidate Uber with their self-driving car to provide an on-demand taxi service?
candybar 13y ago
I'm surprised not to see anyone mention this but a large taxi service for Google can become a huge competitive advantage if it can be intelligently used to gather real-time traffic/street-view/etc data.
subdane 13y ago
Live in New York, think Uber is both more expensive and less convenient than just hailing a cab and I never use it. They seem to want to skim money from cabbies. I was also particularly appalled by their jacking up their prices during Hurricane Sandy. Their one killer feature - being able to see your car's arrival status on your phone, will be a commodity soon enough. Company won't exist in 5 years.
deegles 13y ago
The current business models of transportation startups like Uber, Lyft, Sidecar and Car2Go are merely a stepping stone to something much greater. It's only a matter of time before self-driving car technology is developed enough to be deployed widely. It seems clear to me that Google's investment in Uber is their way to guarantee access to a large fleet of vehicles and an established brand. The next 10-15 years are going to be very interesting :)
kailuowang 13y ago
uber + Tesla + driverless = an environment friendly transportation system as convenient as if you have a private car and driver and as cheap as public bus.

244 points by linux_devil 13y ago

qntmfred 13y ago

self-driving taxis, here we come

yoshyosh 13y ago
This is interesting because if we think, 100 years from now, on demand transportation could be the most efficient way to go. Now Lyft, Uber's biggest threat, has been winning market share by being the ride for the common man and focusing on community. If that is Lyft's biggest strength, what happens to Lyft when self driving taxis are the most obvious solution to transportation.

yapcguy 13y ago

> "The $258 million is a 86% chunk of Google Ventures’ $300 million dollar a year fund, and its unclear as to whether the firm will continue to make such sizable investments." So a towncar hire service, with an app, is worth over $3bn ? Really?! Maybe there's one or two other metropolitan cities in the US where the taxi service isn't up to scratch, but where is the growth going to come from? I doubt whether regulators and taxi unions in London, Tokyo or Hong Kong would sit idly by when some Silicon Valley kool-aid types come knocking.

blueprint 13y ago
Haven't you heard? They're doing helicopters now too.
psbp 13y ago
Now they have a quarter million more in leverage.
garry 13y ago
People spend $10B on taxis per year in the United States alone. Smartphone adoption is going to reach 100%. I think if you put those two together, you really can't pigeonhole this type of service as "just another Silicon Valley app."
- deleted 13y ago
  [deleted]
- samstave 13y ago
  * Build out the technology so that every existing cab service can license and whitelabel * Build out the service so that Uber is the central dispatch to any ride option based on price - also playing into the whitelabel/building of tech * Provide Uber a significant fund with which to seek M&As of existing taxi cos all over the place * Provide an investment sizeable enough to serve as national/global free PR for the service, investment * Provide an investment large enough to back a significant legal team that can take on any metro taxi service's bitching * Provide an investment large enough to lobby the hell out of local/national representation
Me1000 13y ago
Even when taxis are readily available I still prefer Uber. UberX is cheaper than a cab for many thing and it's much less hassle. I get in, the driver drives, then I get out... no fumbling with cash or swiping cards, signing things, and worrying about tips. In San Francisco I can even get a yellow taxi cab via Uber. Is it worth $3B? I don't know... but it's certainly not as insane as some other valley companies.
jfoster 13y ago
Combine it with Google's autonomous vehicle technology, and you can begin to envisage a future where the idea of owning your own car with ~5% utilization is viewed as ridiculous, or at least an unnecessary luxury.
- potatolicious 13y ago
  That may be true, but we're at least a few years away from Google's autonomous vehicles being on the road, much less mass adoption. Even longer for vehicle ownership patterns in the US to change dramatically enough that an autonomous-car-hire service will eat the world. It may happen, but there is such an enormous gap of time between then and now that I wouldn't exactly be picking winners just yet.
  - jfoster 13y ago
    By the most optimistic timeframe, it sounds like Google might be ready as soon as 2.5 years from now. (based on this article: http://www.extremetech.com/extreme/147940-google-self-driving-cars-in-3-5-years-feds-not-so-fast http://www.extremetech.com/extreme/147940-google-self-drivin...) They might now be at the point where they have to pick a winner to start integrating. Their engineers have already been driving these things around for years. They probably already have a v1.0 release date in mind.
    - potatolicious 13y ago
      But why Uber? Uber isn't really a tech company, in the same way Amazon isn't really a tech company. The Secret Sauce(tm) behind Uber is logistics - in managing a highly fluid workforce, dispatching, etc. Not much of which transfers into this post-human-driver world. I like Uber, but I don't think Uber being Uber really confers a large advantage over new entrants when the autonomous cars become reality. It would seem to me that, when the time comes, any number of companies run by reasonably talented people with capital backing can start a car service. Uber's edge applies to their human-driver business.
      - 13y ago
deleted 13y ago
[deleted]
jpalomaki 13y ago
Maybe they are therefore taking this to markets where the taxi business is more open to competition and not so tightly regulated. I see great opportunities here as they are not limited to traditional taxi services. Once you have the infrastructure in place, you can for example start doing something that is between traditional taxi and tradinaional public transportation (in Finland there are trials running for this kind of system[1]). And once you have self driving cars, it would be interesting to evolve into car sharing scheme style of things [2], where can summon a car to your door with smart phone app. [1] https://kutsuplus.fi/tour https://kutsuplus.fi/tour [2] http://www.citycarclub.co.uk/ http://www.citycarclub.co.uk/
csomar 13y ago
I guess this has to do with Google self-driving cars. Maybe they are envisaging to replace taxi drivers in the future; and having a seat in Uber will definitively help them.
hsuresh 13y ago
That is the beauty of services that are easy to sell. Everything is fairly clear, it is "just" a matter of execution at scale - i know i am oversimplifying the execution bit, but most startups have trouble figuring out the product-market fit, and even if they do, often have markets that are small.
kenshiro_o 13y ago
That is some seriously high valuation given Uber's current (and even projected) numbers. But I understand what Google is trying to do. I would agree that the self driving car business will take a lot longer than we think even in places like Silicon Valley. Still it is a plausible future although I believe people will still like taking taxis. Disclaimer: I will be working for Hailo soon, the London start-up which is Uber's competitor. I believe both companies have their strengths and tackle different bands of the same market.

onedev 13y ago

You know what, Uber is awesome. Congrats to those guys and gals. I think Uber will evolve to become a service that even regular people can use, not just a speciality service for the relatively wealthy tech community (though it is necessary to start out as such; ala Tesla). I also think that taxis aren't the only thing that it will offer in the future. There is a wealth of potential for what they can do. They sometimes do fun one-off Ubers like Helecopters or Ice Cream Trucks which don't quite capture this potential but shows us that they realize that there's much more to experiment with and that they're not afraid to experiment. Imagine when we have self driving vehicles (which, incidentally Google is helping develop).

dailyrorschach 13y ago
I'd say that among people who take cabs, not necessarily wealthy, Uber is growing fantastically in some markets. Here in DC - almost everyone I know prefers and uses Uber now.
- mattmcknight 13y ago
  Uber in DC is under attack from the government. "DCTC passed a new set of regulations which bans mid-sized, fuel-efficient vehicles from being hired, as well as places color restrictions on those cars." http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-commission-square-off-in-new-fight-92966.html http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-co...
  - dailyrorschach 13y ago
    I think Uber is pretty safe in DC. UberX is under attack in DC. The Limo/livery (black car and SUVs) businesses is now well protected by DC law and the definitions passed earlier this year. The DCTC rules will classify the UberX hybrid vehicles as Sedans and subject to the new rules. However, Uber has secured enough allies in the DC Council, including the DC Transportation CMTE Chair. I've watched this fight play out a few times now, and I think the worst case scenario is no UberX through the end of 2013 prior to the next set of DCTC rule-making or council intervention. Uber rightly gins everyone up in DC about these issues, but the truth is they've done a great job in this market attracting the right allies and have been consistently winning their battles.

alariccole 13y ago

This makes perfect sense, and if I had money to invest in this market, I would. Self-driving cars coupled with such an infrastructure means a very profitable business in the not-too-distant future. The highest cost for taxis is not the cars, nor the gas, but the drivers. Get rid of them, and it's all gravy. Something like this is most certainly the "mass" transit of the future. It would be lower cost, more convenient, and would actually pollute less than buses during non-peak times.

garindra 13y ago
>> The highest cost for taxis is not the cars, nor the gas, but the drivers. Do you have any source on this?
- rescripting 13y ago
  It's almost self evident. Does a car cost > 30k a year? Does gas? Just like software engineering, the biggest cost in the taxi game is labour. Edit: Maybe I goofed, mattmcknight accurately points out that in many cities the taxi medallion is the most expensive part of the taxi equation. I'm not intimately familiar with Uber; do drivers still have to obtain medallions in their respective cities?
  - sliverstorm 13y ago
    On the subject of medallions, last I heard that was a point of contention. Uber has been operating without them, and taxi companies don't like that. You play by the rules and pay a huge lump sum to be allowed to operate, and then some guy comes along and undercuts you because HE doesn't have to pay that lump sum? You wouldn't like that either.
    - jdh 13y ago
      Medallions required to pick people up on the street. Über is classified as a limo -- pre booked, no curbside pickup. Los dint need medallions. However, the structure was created for old style limos: I.e. fat cat or prom kid books for hours, days in advance, not competitive with a taxi. One could reasonably argue booking an uber 1 minute before pickup for a ten minute ride is a lot more like a taxi than a limo.

psbp 13y ago

A big piece of google's continued growth is going to be in mobile commerce. Take offers, maps, search and self-driving cars and put them into an amalgamated new product. Google's future is an ecological approach.

greendata 13y ago

Regulation is the biggest obstacle with Uber. The Taxi services have the city regulators in their pockets. Google, with their influence and money, may help solve Uber's biggest issue.

arsenerei 13y ago
It looks likely to not be a problem in California shortly. http://techcrunch.com/2013/07/30/california-regulator-proposes-new-ride-sharing-rules-in-a-victory-for-uber-lyft-and-sidecar/ http://techcrunch.com/2013/07/30/california-regulator-propos...
- gojomo 13y ago
  The federal FTC has also indicated it considers some of the state/local transport regulatory regimes anti-competitive, though it's not clear they have any legal authority to interfere with local determination.

mistercow 13y ago

I can't help but wonder if it might have been wise for them to wait until they had widespread approval and adoption of self-driving cars. Completely disrupting mass transit will threaten a very large number of people's bottom lines, and many of those people have the ability to make things difficult for Google. Not least among these are auto manufacturers.

psbp 13y ago
This is an angel investment. Google is bolstering Uber, not competing directly.
- mistercow 13y ago
  Even so, I wonder if they might do better not to draw attention to the disaster that "easy car sharing (or similar concepts)" + "self-driving car" could be for car sales. Maybe I'm underestimating car companies in assuming that the haven't already anticipated this (although in that case, why aren't we seeing resistance), or maybe Google holds them in even lower esteem.
  - chromaton 13y ago
    My guess is that the car companies haven't figured this out. It takes two steps of reasoning: 1. Figuring out that self-driving cars are practical in the medium term and 2. Figuring out that widespread availability of self-driving cars means that people might not want to own their own.
    - mistercow 13y ago
      Here's hoping that they, like many others before them, flinch away from the mental pain of noticing that their business model is about to crumble until it's too late.
- joshu 13y ago
  Venture investment.

clamprecht 13y ago

Wow, corrupt governments everywhere, kiss your corruption goodbye.

malandrew 13y ago

It would be awesome if they next look at Lit Motors or a similar safe 1-2 person pod. Lit Motors + Über + Self-driving cars is total win. Once you get rid of the driver all you really need are 1-2 seats for most black car service and taxi rides

benologist 13y ago

This year will be remembered as the first year TechCrunch failed to break any major stories.

deleted 13y ago
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physcab 13y ago

Uber makes absurd amounts of money. I've had many conversations with drivers and they claim to be pulling in $35-$45 per hour after uber's 30% cut. I've talked to drivers who have quit their full time jobs and love it. Some have said that because the service is so convenient that people have started using it as a walking replacement, often opting to catch a cab for 5 blocks. Lastly, many companies have enterprise uber accounts and will happily pay their employee's $200 cab rides to the airport or even 45 minute drive home.

graeme 13y ago
I live in Montreal, so I"ve never been able to use Uber. What makes it different from a cab? In Montreal, cab to the airport costs $50. Cab arrives in about 1-2 minutes most locations, and drives you there as fast as taxis go. I don't doubt that Uber's great - this is a serious question. How much of a premium do people pay, and what are the main benefits in cities that already have developed taxi networks?
- maxmcd 13y ago
  Mostly their logistical advancements. You can rate drivers, you can ask for a driver in advance, you can track the drivers location. They actively plot what parts of town have high traffic, and at what times. This in general leads to a significantly improved experience over cabs, or other drivers. They seem to be always there when you want them, the drivers are always nice and very knowledgeable, etc..
- jhenkens 13y ago
  In many US cities, you can get UberX for about the price of a cab, Uber about 1.25-1.5 that. However, when you call a cab, it often takes 5-20 minutes, you have no idea who is picking you up, and often times they wont even show up if you aren't at a hotel. Uber you know exactly how long and who will be picking you up, and you can track them.
  - ovoxo 13y ago
    > "5-20 minutes" - Sure. That does depend on where you are though. > "You have no idea who is picking you up" - 99% of the time this is a moot point. > "Often times they wont even show up if you aren't at a hotel" - I've never encountered this in my entire life.

w3pm 13y ago

"Given the scale of the cash injection, the company might not have to raise another series round before going public, though a bridge round isn’t inconceivable." Why does a company need to raise so-much-money before going public? Isn't the whole point of "going public" to raise money?

maxmcd 13y ago
Wouldn't the logic instead be that when they wanted to raise money again that it would be at an IPO-level. Not that this round is necessarily driving them towards an IPO, except in the sense that it's leading them to be big enough for one.
fpgeek 13y ago
I'd say that the point of "going public" is to provide liquidity to existing shareholders (e.g. founders, employees, outside investors). There are other ways to raise money, if that's all you want.
- backprojection 13y ago
  Sorry, I don't know anything about finance/business. What you say makes some sense to me, that going public lets initial investors cash out, if they so wish. But I'm still confused, why not sell public shares from the get-go. Is it that it's easier to make your case (for investment) to a VC than it is to Joe public?
  - deleted 13y ago
    [deleted]
  - mbreese 13y ago
    One reason is overhead. Being a publicly traded company involves lots of legal filings and paperwork ($$$). Typically, you want to stay private for as long as you can. For example, Facebook only went public when they were legally obligated to because they had reached the limit on private shareholders. (I'm not saying that was the only reason, but it was a factor in the timing)

flyinglizard 13y ago

This is an incredible move on Google's part. Uber can be seen as the physical arm of Google in meatspace; imagine having your flight information come up in Google Now with a button to summon an Uber car. I look into the future and I primarily see "Google".

ngoel36 13y ago
From my understanding, Google and Google Ventures are 100% independent.
- cyanbane 13y ago
  Minus those 6 characters, of course. Those 6 characters mean a lot to everyone outside that bit of knowledge.
- gojomo 13y ago
  I've seen alternate stories about GV which seem to want to have it both ways – some that imply an ability for GV to bring in Google staff/expertise to help investments, and others vaguely implying a more strict separation. This page... http://www.googleventures.com/investing http://www.googleventures.com/investing ...touts "Uparallelled Access to Google", and supposedly GV won its share in Uber's round with the help of direct lobbying from Larry Page. So GV may be ostensibly empowered to seek return without regard to Google's other objectives... but it doesn't appear there's a "Chinese Wall". If theoretically the GV partners wanted to do something Larry Page absolutely didn't want, I'm not sure I'd bet on the GV partners having their way.
- canttestthis 13y ago
  Not 100% apparently. > “If a company comes in the door and it looks like something important for Google to acquire,” says Maris, “we will defer to Google’s corporate development department to take a look.” http://techcrunch.com/2009/04/04/the-google-ventures-cheat-sheet/ http://techcrunch.com/2009/04/04/the-google-ventures-cheat-s...

ovoxo 13y ago

So, you do all realize that this was an investment (of less than 10%) and not an acquisition right? Everyone here is talking about how this plays right into Google's plans - no. With their stake, Google does not have enough leverage to direct what direction Uber should be moving in.

lpolovets 13y ago

A lot of people are commenting about Uber + self-driving cars. What's the point of Uber if there are self-driving cars? Doesn't the existence of fully automated, driverless cars kill the value of Uber's driver network while equaling or surpassing Uber's no-hassle experience? I think what I'm saying is: if Google actually created a fleet of driverless cars, would anyone still use Uber?

mandeepj 13y ago
This can be written as another law of newton - if there are driver less cars it does not mean everyone will have driver less cars :-)
siglesias 13y ago
I think the idea is that you would not have to own, maintain, and park a car if you could summon one on a whim.
- lpolovets 13y ago
  I definitely get the appeal and the value of that kind of future. It just feels like "driverless cars + simple Google-made reservation app" would send Uber's value down to zero. So if driverless fleets of cars are the future that Google is aiming for, then why invest in Uber? What does Uber currently have that would still be valuable in that future?
  - siglesias 13y ago
    Probably the operational expertise in efficiently getting cars to pick up and drop off people at arbitrary points throughout a city. They're building that expertise right now with human drivers.
    - acchow 13y ago
      Organizing human operators and delegating machines are expertise that have almost zero in common.

NN88 13y ago

Basically Uber-driverless cars?

jasonmoo 13y ago

Step one: buy car service Step two: replace drivers with computers Step three: profit, optimize traffic patterns from within the swarm, decrease accidents, increase fuel efficiency, etc.

logn 13y ago

Will a web-bot be able to automatically order self-driving cars to pick up robots so they can peaceably assemble outside Utah data centers?

perfmode 13y ago

For those who find this new baffling: Uber operates in the following cities: 1 AMSTERDAM 2 ATLANTA 3 BALTIMORE 4 BERLIN 5 BOSTON 6 CHICAGO 7 DALLAS 8 DENVER 9 DETROIT 10 HAMPTONS 11 HONOLULU 12 INDIANAPOLIS 13 JOHANNESBURG 14 LONDON 15 LOS ANGELES 16 LYON 17 MELBOURNE 18 MEXICO CITY 19 MILAN 20 MINNEAPOLIS 21 MUNICH 22 NEW YORK CITY 23 ORANGE COUNTY 24 PARIS 25 PHILADELPHIA 26 PHOENIX 27 PROVIDENCE 28 ROME 29 SACRAMENTO 30 SAN DIEGO 31 SAN FRANCISCO 32 SEATTLE 33 SEOUL 34 SHANGHAI 35 SINGAPORE 36 STOCKHOLM 37 SYDNEY 38 TAIPEI 39 TORONTO 40 WASHINGTON D.C. 41 ZURICH

gwynp 13y ago
I had a look at their careers page - that list will be expanding quite a bit soon.

jfornear 13y ago

Guber http://imgur.com/Klr7cHY http://imgur.com/Klr7cHY

revorad 13y ago

Travis Kalanick is the definition of relentless - http://www.youtube.com/watch?v=2QrX5jsiico http://www.youtube.com/watch?v=2QrX5jsiico

cwilson 13y ago

Is it not weird that Google Ventures also invested in Sidecar? Isn't that a conflict of interest?

fsckin 13y ago
Sounds like they're betting on two horses in the race.
robk 13y ago
Or just a long-term bet against individual/personal car ownership.

fsckin 13y ago

Should have been 256M for a nice round number.

mason240 13y ago

Looking at the Uber website, they refer the the Twin Cities as Minneapolis, even though their service area includes St Paul and Minneapolis. That's a deal killer for me.

arbuge 13y ago

Aside: the quality of comments on Techcrunch seems to have really deteriorated with their current comment system.

unz 13y ago

This is kind of silly. If Google launched it's own uber with the google brand on it, it would easily trump uber. Developing the the uber software would cost way way less than $250 million. These large companies are throwing a lot of money away on stupid acquisitions. (It makes sense in social networking, but not with something like uber which isn't a network effects company).

dcpdx 13y ago

Love Uber. After using it for over a year, just had my first negative experience this past weekend in SF when the UberX driver had no clue how to get from SOMA to Ocean Beach. I left negative feedback and in a few hours got a response from one of their customer experience folks apologizing for the poor service and refunding my money for the trip. Service like that is why I'll always choose Uber over alternatives like Lyft, Sidecar, etc.

cheez0r 13y ago

Anyone else see Google lining up Uber to get bought, so that they can consolidate Uber with their self-driving car to provide an on-demand taxi service?

candybar 13y ago

I'm surprised not to see anyone mention this but a large taxi service for Google can become a huge competitive advantage if it can be intelligently used to gather real-time traffic/street-view/etc data.

subdane 13y ago

Live in New York, think Uber is both more expensive and less convenient than just hailing a cab and I never use it. They seem to want to skim money from cabbies. I was also particularly appalled by their jacking up their prices during Hurricane Sandy. Their one killer feature - being able to see your car's arrival status on your phone, will be a commodity soon enough. Company won't exist in 5 years.

deegles 13y ago

The current business models of transportation startups like Uber, Lyft, Sidecar and Car2Go are merely a stepping stone to something much greater. It's only a matter of time before self-driving car technology is developed enough to be deployed widely. It seems clear to me that Google's investment in Uber is their way to guarantee access to a large fleet of vehicles and an established brand. The next 10-15 years are going to be very interesting :)

kailuowang 13y ago

uber + Tesla + driverless = an environment friendly transportation system as convenient as if you have a private car and driver and as cheap as public bus.