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What people fail to take into account is the self-driving car future where Uber takes 100% of the profits (since there is no driver). It will start taking a chu

What people fail to take into account is the self-driving car future where Uber takes 100% of the profits (since there is no driver). It will start taking a chunk of the people driving themselves market as well when Uber becomes more convenient and cheaper (removing the human allows them to be more competitive with every day driving). To get to this point however does require it to start operating its own fleet (unless small regional companies form to manage the fleet and just loan out their self driving cars to uber). Either way Uber is in a good position. If it manages its own fleet, it can better negotiate the price of each car than any individual can. It will also have more data than anyone else on how those vehicles operate and can then buy it's own insurance for its entire fleet, cutting costs there. If the alternative occurs, then Uber will own the buy side of the market and have most of the leverage relative to local companies that manage their own fleet. There are a lot of ways things can pan out, but being the most tech focused of these companies with the best engineers of any of these types of companies, puts it in the best position to own the self-driving car future. The only company better positioned is probably google.

CPLX 12y ago
This doesn't entirely make sense to me. One of the absolutely beautiful things about the more successful "sharing economy" companies is the degree to which they've been able to provide a highly capital intensive product/service (room accommodations, auto transportation) without having the associated capital costs and risks. The cost of capital acquisition and debt service is a massive barrier to rapid growth and thus multiples/valuation. If a main attribute of Uber is that they run a taxi fleet and its workforce while offloading the expense of owning and maintaining one -- much like Airbnb is a lodging chain that doesn't have to bankroll any real estate -- then that's kind of the point of the model. The idea that changing that fundamental business advantage is the "real" goal seems unpersuasive to me. People who drive cars are likely to be more efficient economically than a self-driving computer for decades at least, if not longer.
gitah 12y ago
What's preventing another competitor from buying self-driving cars themselves and pushing the margins on automated taxis down to a commodity product? Anything that you need to pay for has a chink in the network effect armor. All a competitor needs to do is price cheaper and all your users will flock to them. Tech companies survive on fat margins, but I think this industry is heading the other way.

CPLX 12y ago

This doesn't entirely make sense to me. One of the absolutely beautiful things about the more successful "sharing economy" companies is the degree to which they've been able to provide a highly capital intensive product/service (room accommodations, auto transportation) without having the associated capital costs and risks. The cost of capital acquisition and debt service is a massive barrier to rapid growth and thus multiples/valuation. If a main attribute of Uber is that they run a taxi fleet and its workforce while offloading the expense of owning and maintaining one -- much like Airbnb is a lodging chain that doesn't have to bankroll any real estate -- then that's kind of the point of the model. The idea that changing that fundamental business advantage is the "real" goal seems unpersuasive to me. People who drive cars are likely to be more efficient economically than a self-driving computer for decades at least, if not longer.

gitah 12y ago

What's preventing another competitor from buying self-driving cars themselves and pushing the margins on automated taxis down to a commodity product? Anything that you need to pay for has a chink in the network effect armor. All a competitor needs to do is price cheaper and all your users will flock to them. Tech companies survive on fat margins, but I think this industry is heading the other way.