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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

#151

Post by loeg »

macspoofing wrote: post #132
martinald wrote: post #108

Earlier quoted context omitted.

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…

I don't know about London, but in my area an UberX ride is 4-5x the price of a bus ticket (~10km). This only gets worse as the distance grows. Public transit is not Uber's competition and it'll never replace mass transit.

You can split an Uber 4 ways but you can't split a bus fare. So if you go out with a few friends it becomes much more reasonable for short trips. If Uber gets more expensive, some people will go back to public transit.

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

#152

Post by baddox »

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…

> 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.

It depends what you mean by "actual costs," but I would suspect that Uber's will still be lower than cabs' under any reasonable definition.

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

#153

Post by macspoofing »

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.

>ride sharing is the least interesting thing about Uber

That's the only interesting thing about Uber. Sure they have delusions of grandeur and they certainly have no qualms about putting out glossy marketing material extolling how they will change humanity, but today they are a taxi company.

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

#154

Post by nugget »

semi-extrinsic wrote: post #76
nugget wrote: post #38

Earlier quoted context omitted.

The only thing that can ''take out'' Uber is widespread adoption of autonomous vehicles, whereupon ride sharing becomes a physical-capital intensive business (cars) rather than the current human-capital intensive business (drivers/their driver network). Autonomous vehicles (and the infrastructure to support them) significantly reduce the amazing network efforts that Uber has enjoyed to date. An investment into Uber a…

There is also a definite risk that legislation will hit them hard. I'd say that's much bigger than the risk posed by autonomous cars.

I agree but I think it's more along the lines of ''we will tax you'' than ''we will shut you down''. Once the Gov starts to make money from you then you've turned them into a business partner with a vested interest in keeping you alive (see Airbnb).

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

#155

Post by intrasight »

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…

They hired away almost half of CMUs robotics department. That's gotta be expensive. They are building (in the city no less) an autonomous driving test track/facility. That's also gotta be expensive. Human drivers are just a brief stepping-stone.

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

#157

Post by zeckalpha »

dharmon wrote: post #115
ng12 wrote: post #96

Earlier quoted context omitted.

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 the oft-repeated argument in favor of Uber ("they're a logistics company!"), and to be honest, it's quite hand-wavey. Why is the expertise they have built up in car-hailing directly applicable to other logistics problems, and what advantage will they have going in that creates a barrier to entry for newcomers? I think there is one answer to this for Uber, and its the same strategy Amazon stumbled into: have y…

Amazon's profit center is AWS?

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

#158

Post by macspoofing »

loeg wrote: post #151
macspoofing wrote: post #132

Earlier quoted context omitted.

I don't know about London, but in my area an UberX ride is 4-5x the price of a bus ticket (~10km). This only gets worse as the distance grows. Public transit is not Uber's competition and it'll never replace mass transit.

You can split an Uber 4 ways but you can't split a bus fare. So if you go out with a few friends it becomes much more reasonable for short trips. If Uber gets more expensive, some people will go back to public transit.

>You can split an Uber 4 ways but you can't split a bus fare.

Like a taxi?

Uber will never come close to moving the sheer numbers that public transit does. You can't do it, not enough road to fit all those cars. Especially in downtown cores.

So Uber competes with public transit as much as taxis compete with public transit.

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

#159

Post by macspoofing »

CPLX wrote: post #107
ng12 wrote: post #96

Earlier quoted context omitted.

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.

That's a great point. To add to it, as Uber grows, it'll take on weight and inertia and become as rigid, bloated and inflexible as other successful Fortune 500 companies. They'll have departments, and department heads who want good quarterly numbers and will not want to rock the boat too much. They'll have shareholders who'll want a good return and not expensive moonshots. And I mean that all in a good way. There's nothing wrong with that. WalMart didn't miss out by not building a search engine 10 years ago. It's not what they know.

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

#160

Post by zippergz »

martinald wrote: post #108
downandout wrote: post #98

Earlier quoted context omitted.

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…

Sample size of one, but I haven't used public transit in probably close to 10 years, and I use Uber all the time. I definitely would not turn to public transit if Uber shut down. I'm sure it depends on the city and the quality of its transit offerings.
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