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Uber Turns to Saudi Arabia for $3.5B Cash Infusion

nytimes.com

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Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#41

Post by petra »

rexreed wrote: post #30
kinkdr wrote: post #15

Earlier quoted context omitted.

In my simplistic mind, their business model is to spend a lot of money today in order to create a monopoly tomorrow.

In what way is the ride-share market any sort of monopoly when there's little barrier to entry. In fact, I see new entrants in this market all the time. Hardly any chance to be a real monopoly unless they can somehow carve their way to exclusivity in a market, which is never going to happen.

The ride-sharing market stops being a free-for-all once many people start to share a car and it's critical to find the most optimal route for them. Than having large masses of users become critical.

The only thing i find curious - why is UBER/LYFT so slow in attacking the true sharing market ?

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#42

Post by tomcam »

rexreed wrote: post #30
kinkdr wrote: post #15

Earlier quoted context omitted.

In my simplistic mind, their business model is to spend a lot of money today in order to create a monopoly tomorrow.

In what way is the ride-share market any sort of monopoly when there's little barrier to entry. In fact, I see new entrants in this market all the time. Hardly any chance to be a real monopoly unless they can somehow carve their way to exclusivity in a market, which is never going to happen.

Their long-term play is driverless cards--buy or lease fleet cars, then charge people a subscription to commute or use the cars a certain amount per month. The current business is building brand awareness and inertia.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#43

Post by jd3 »

godembodied wrote: post #32

So what if they execute people for what they think are crimes? Who are you to judge what people should or should not do? What you label as evil someone will label as good. There is no absolute evil/good, as you're trying to portray it. It only your opinion vs. their opinion.

While this is somewhat true, it's a somewhat ridiculous argument to bring up when talking about saudi arabia. I think the west has come to the general consensus that women have rights, and that people should not be beheaded in the streets for denouncing their state religious authority. This hermeneutical matter-of-interpretation crap is no defense for the crimes against humanity that saudi arabia commits regularly.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#44

Post by SilasX »

CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

I haven't worked out the specific numbers, but $60 billion is reasonable if you expect Uber to become a global near-monopoly on hired ride services and related logistical services they're branching out into. Whether that scenario is reasonable, is itself an open question, of course.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#45

Post by mikeyouse »

patmcguire wrote: post #33
supster wrote: post #24

Earlier quoted context omitted.

Except in Uber's case where they are famous for keeping tight control on secondary sales. http://fortune.com/2014/06/20/uber-plays-hardball-with-early...

I can't find the link because the huge media churn makes it impossible to find anything that isn't the most recent story, but didn't they ban Chris Sacca from the Uber office for hanging around and buying secondary shares from people? I think the lockdown happened after that.

You're probably thinking of Sacca and Twitter:

http://techcrunch.com/2011/02/27/jp-morgan-twitter-chris-sac...

He may have done the same for Uber, but I haven't heard anything about that at all.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#46

Post by dharmon »

slg wrote: post #8

Putting aside whatever you think about Saudi Arabia or its government, it is inarguable that this move will be highly controversial. It makes me wonder why Uber pulled the trigger on this knowing there will be a backlash. Wouldn't it have to be because of pricing? I wonder if the leadership of Uber simply didn't want to see any dip in the valuation and Saudi Arabia was the only one out there willing to meet that pric…

First, public backlash has not stopped Uber from doing things before.

Second, all the smart money is either sitting it out and/or can't invest at these levels, and Saudi money in a tech startup is definitely dumb money.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#49

Post by CPLX »

SilasX wrote: post #44
CPLX wrote: post #5

Sincere question, can someone explain to me a plausible scenario at this point by which early investors actually receive a payout even slightly commensurate with their supposedly incredible investment? For example, how can someone in the seed round genuinely be able to cash out given the unbelievable amount of dilution that has taken place. What are the plausible scenarios where this occurs? EDIT: Specifically asking…

I haven't worked out the specific numbers, but $60 billion is reasonable if you expect Uber to become a global near-monopoly on hired ride services and related logistical services they're branching out into. Whether that scenario is reasonable, is itself an open question, of course.

It seems divorced from reality to me, though I claim no real special expertise. They seem to have no more ability to be a monopoly than any other logistics or transportation powerhouse. The market cap of UPS is ~$90bn, and FedEx ~$40bn. And those companies have a lot of real actual assets* and (arguably) much stronger network effects than a local taxi replacement company.

It's not that it's so implausible it couldn't happen, it just seems to insert some very serious risk for a large swath of the equity holders, and makes me wonder why the company is so keen to assume that risk.

[* UPS has over $40bn worth of stuff like airplanes, trucks, land, and buildings on their books.]

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#50

Post by ng12 »

godembodied wrote: post #32

So what if they execute people for what they think are crimes? Who are you to judge what people should or should not do? What you label as evil someone will label as good. There is no absolute evil/good, as you're trying to portray it. It only your opinion vs. their opinion.

So where's the line? I'm reading your argument as we shouldn't even try to prevent or even address injustice in other countries as they presumably have some method of justifying it.
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