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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

#101

Post by nilkn »

CPLX wrote: post #78
gist wrote: post #69

Earlier quoted context omitted.

One thing I'd like to know (and I am sure someone has answered this somewhere) is the amount of people using Uber in their own town vs. people who travel and use Uber. If in their own town, it seems entirely possible for a local strong competitor to offer a better product or service. For travelers that is less of a risk since you go with the brand you know (which traditionally has been a taxi cab). In particular some…

In my experience this is actually happening. For example many of my friends are now using Dial-7 to get to and from the airport these days for business trips. It's just more predictable than wondering if there will be surge pricing when you need to leave, they actually are slightly cheaper, and you know what you're going to get. Uber's user experience has a lot going for it but it's very, very far from flawless or un…

For getting to/from the airport in my own city, I still use the old limo driver that I was using before Uber took off. Literally the same guy, not just the same service/company. When friends or family members fly down to visit I sometimes book him for them as well.

It's about the same price as Uber (I voluntarily pay more because I tip him generously), but it's a 100% guaranteed fantastic experience. With Uber, you never know who your driver is going to be. I've had some pretty bad ones and some pretty unfriendly ones who made me or someone with me feel uncomfortable.

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

#102

Post by Fricken »

hencq wrote: post #90
CPLX wrote: post #57

Earlier quoted context omitted.

> The only thing that can ''take out'' Uber is widespread adoption of autonomous vehicles That's ridiculous. It's not even a little hard to imagine that they could be overtaken by a similar competitor such as Lyft given a plausible sequence of events. In fact it's basically a certainty that they would be if they ever abandoned competing based on price. Which defeats a hell of a lot of the point of paying to acquire a…

Agreed. They wouldn't even need to be overtaken. It seems that a lot of the valuation is based on the premise that this is a global winner takes all market. If it turns out that's not true and there is in fact space for multiple competitors then the valuation could turn out to be a lot less.

If Uber has a moat of any sort to protect itself from competition, I'm not seeing it.

Once Uber has executed a tactical blitzkreig in a new city and incited a pogrom against the cab drivers, and fought the legislative battles with resistant city councils; the door is open for any rideshare company to glide in on Uber's coatails and take advantage of all that costly trailblazing without paying a dime.

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

#103

Post by amyjess »

Animats wrote: post #48

Latest Uber worry: When the Tesla 3 comes out, Uber drivers clogging the fast-charging stations. "Free power for life" is a great deal when you're a cab.

There's already a problem with people who live near superchargers using them for everyday charging. Tesla has already been sending angry letters to owners who do this, reminding them that the superchargers are supposed to be only for people on long road trips. They can't actually threaten to cut off someone's supercharger access, because the purchase agreement for every Model S specifies irrevocable free access to superchargers for life, so all they can do is send letters and try to talk them out of abusing it.

And as somebody else linked in this thread, they're going to start charging new customers for access when the Model 3 comes out, which will either fix the problem or make Tesla a lot of money off it.

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

#104

Post by __derek__ »

koolba wrote: post #10
Retric wrote: post #6

Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model.

> Uber needing 3.5B is a huge negative sign IMO. Clearly something is broken with their business model. If someone is willing to give you $3.5 billion dollars I'd argue you've got a solid business model. Either that you're just really good at raising capital.

That "someone" in this case is a notoriously poor investor, so maybe scale back that optimism.

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

#105

Post by taxicabjesus »

downandout wrote: post #98
methehack wrote: post #82

I've always been a little confused about uber's capital needs. When I first heard about uber, the part I thought was super-clever was that you wouldn't _need_ lots of capital because all the drivers would have their own cars. Leveraging the latent capital of one side of the two-sided market was the genius of it. (Airbnb too) Same for the staffing -- hook up both sides of the market. No need to pay anyone out of your…

I believe that your assumption of insane driver subsidies is indeed the reason they are sucking down so much money. That is a problem, because the moment that people have to pay the actual costs of an Uber ride, they may go back to taxis or driving their own cars. The only strategy I can see with the absurd amounts they are raising is that they are trying to get enough money to sustain the subsidies until they kill a…

> The only strategy I can see with the absurd amounts of fundraising is that they are trying to get enough money to sustain the subsidies until they kill all existing competition, at which point they can raise their prices and people will have no choice but to pay them

The taxi company I drove for has contracts with many government agencies to transport poor & unfortunate people around. People have to get to their doctor (Arizona Medicaid) appointments, to the hospital, home from the hospital, foster kids transported to meetings with their parents, etc.

These fares pay better than Uber's non-surge fares.

/methinks "ride share" companies are run by founders suffering from delusions of grandeur. When they run out of venture capital, the realities of transporting people from place to place will reassert themselves.

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

#106

Post by amyjess »

aetherson wrote: post #63
petra wrote: post #41

Earlier quoted context omitted.

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 ?

Because people don't actually want to share a cab with a stranger, and wait while that stranger is dropped off. At least, that's my bet.

Yep. I've been creeped on by drivers before. Not many, but it's enough that I've taken to cancelling more rides than I would have in the past (generally: male driver I don't know + low rating + nighttime = cancel). Having to deal with sharing a car with not just one stranger, but two or more strangers? Nuh-uh. At least most drivers won't creep on me because they want to keep their jobs; fellow passengers, on the other hand, don't have that incentive.

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

#107

Post by CPLX »

ng12 wrote: post #96
cylinder wrote: post #87

Earlier quoted context omitted.

Exactly. They are burning cash to gain market share and will lose that share as soon as they stop. Not many barriers to these apps. Uber is going to implode.

Here's the thing -- ride sharing is the least interesting thing about Uber. Uber's expertise is on-demand logistics which is a totally new field at this scale. Ride sharing just happened to be an easy first step. Once they're able to move things around in real-time at a global scale the opportunities are massive.

People say this a lot, so I am not picking on you, but I don't get this argument at all. Amazon does it, so does Lasership and Seamless and Fedex and WalMart and a million other variations. I don't see any real reason Uber is more adept at adjacent non-core market verticals than any other top tier entrant.

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

#108

Post by martinald »

downandout wrote: post #98
methehack wrote: post #82

I've always been a little confused about uber's capital needs. When I first heard about uber, the part I thought was super-clever was that you wouldn't _need_ lots of capital because all the drivers would have their own cars. Leveraging the latent capital of one side of the two-sided market was the genius of it. (Airbnb too) Same for the staffing -- hook up both sides of the market. No need to pay anyone out of your…

I believe that your assumption of insane driver subsidies is indeed the reason they are sucking down so much money. That is a problem, because the moment that people have to pay the actual costs of an Uber ride, they may go back to taxis or driving their own cars. The only strategy I can see with the absurd amounts they are raising is that they are trying to get enough money to sustain the subsidies until they kill a…

But Standard Oil literally bought the refineries, railroad, long term contracts on crude.

That would be like Uber buying every road and every manufacturer.

I also don't think Uber's biggest competition is cars or taxis, I imagine it is public transport. The markets with the best scale (esp outside of US) have good public transit. People aren't going to go from paying a £10 uber to a £30 black taxi in London, they'll go back to getting the tube or the bus home after a night out.

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

#109

Post by maxerickson »

semi-extrinsic wrote: post #89
maxerickson wrote: post #54

Earlier quoted context omitted.

I was going to speculate that they will charge for access, but Googling to get the Supercharger name right lead here: http://arstechnica.com/cars/2016/06/no-free-superchargers-fo... Announced today, they will charge for access.

Wow, based on the access fee for the early lowest power Model S, along the lines of $2500, if not more? That's what, more than two years of fuel for an economic petrol car?

Sure, but it also carries a $15,000 premium over a car that at least matches it on various utility comparisons.

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

#110

Post by wsinks »

ng12 wrote: post #96
cylinder wrote: post #87

Earlier quoted context omitted.

Exactly. They are burning cash to gain market share and will lose that share as soon as they stop. Not many barriers to these apps. Uber is going to implode.

Here's the thing -- ride sharing is the least interesting thing about Uber. Uber's expertise is on-demand logistics which is a totally new field at this scale. Ride sharing just happened to be an easy first step. Once they're able to move things around in real-time at a global scale the opportunities are massive.

This is a great point. UberEATS and UberCats and put our stuff anywhere with an API? I'm starting to see the platform in action.
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