Uber Turns to Saudi Arabia for $3.5B Cash Infusion • Hacker News Board

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

#241

Post by big_youth » Thu, Jun 02, 2016, 4:35 AM UTC

eru wrote: post #220

Fricken wrote: post #102

Earlier quoted context omitted.

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.

Cynically: that's why Uber doesn't want to win that kind of war. They want to get in, and then work with the locals to establish some `sensible regulation'. Regulation that just happens to be cumbersome enough to deter new small-scale entrants.

This is not true in Austin. The city passed a fingerprint and registration requirement and uber and lyft both left the following weekend. Smaller competitors are growing fast. I miss the nice apps and cheap prices but the alternatives are ok.

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

#242

Post by aetherson » Thu, Jun 02, 2016, 4:35 AM UTC

jsemrau wrote: post #118

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.

Good point. However, it is a huge operational risk to rely on on-demand hires for logistics. In addition, ride-sharing works because humans are moved with a given market price given by the taxi network. In logistics you compete not only against UPS and FedEx but with Amazon as well. And *mostly free shipping is hard to get cheaper.

Also, you know, Amazon are not idiots. They aren't like, "Hey, you know what would be fun? Being bent over a barrel on last-mile shipping so that our profits can go to justify Uber's insane stock price."

Amazon is investigating Uber-like delivery options [1]. If they decide that there's anything there (and I'm not totally convinced that there is), they'll build the service themselves and not pay Uber for the privilege. And if the service works well for themselves, you can bet they'll open it up to other people to use for a price, as they have for all of their internal infrastructure projects.

[1] Source for this claim: I worked at Flywheel, an Uber competitor. Amazon had a program to have our drivers deliver packages, and got fairly close to acquiring us, before deciding they would rather not. This was a few years ago at this point, information is not current, and I have no idea about the present state of Flywheel, as I do not work there any more.

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

#243

Post by tobltobs » Thu, Jun 02, 2016, 4:38 AM UTC

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.

When there is no common understanding for what is right or wrong, what gives then somebody the right to cut of other people heads for some wrong doing. There can't be any crimes following your logic.

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

#244

Post by hyperbovine » Thu, Jun 02, 2016, 4:44 AM UTC

cylinder wrote: post #87

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…

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.

> Not many barriers to these apps.

Two words: network effect. More drivers means more users. More users attracts more drivers. This is precisely why we have eBay and Craigslist despite them both offering, by modern standards, objectively terrible user experiences. Suffice it to say I am extremely bullish on Uber, Airbnb, etc. sticking around for a whole.

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

#245

Post by vonklaus » Thu, Jun 02, 2016, 4:45 AM UTC

eru wrote: post #218

vonklaus wrote: post #188

Earlier quoted context omitted.

my thought for the last couple years has been they are an information arbitrage/market maker probably similar to AMZN. I also have to imagine they are working on a self driving car. On top of engineering spend they are basically at war with every single place they move into and refuse to go public. They can't continue to be just ride sharing when self-driving cars come out, so they need to capture that market (or som…

> On top of engineering spend they are basically at war with every single place they move into [...] You mean with every single jurisdiction they move into? (Customers and drivers seem reasonably happy. At least they are not at war.)

Correct, city, state and to some extent federal law. As well as various international companies and the international regional equivalents

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

#246

Post by hkmurakami » Thu, Jun 02, 2016, 4:45 AM UTC

toomuchtodo wrote: post #227

alttab wrote: post #183

Earlier quoted context omitted.

I got some blood testing machines I'd love to sell you.

While driving home this evening listening to NPR's Marketplace, Kai Ryssdal specifically mentioned that Forbes removed Elizabeth Holems from their list of richest self-made women. Her stake in Theranos is now valued at $0 [1]. Capitalism giveth, and capitalism taketh away. [1] https://news.fastcompany.com/elizabeth-holmess-net-worth-is-...

It's hard to believe that she didn't take some money off the table during the frothy fundraising years of yesteryear.

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

#247

Post by hkmurakami » Thu, Jun 02, 2016, 4:53 AM UTC

birken wrote: post #27

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…

As long as the valuation of the company is going up more than the dilution, the value of existing shares goes up. In an early stage company that might mean raising a Series A where the valuation of the company goes up 100% and shares are diluted by 35%. Value still going up. For an ultra late stage company like Uber that means ~5% dilution in this round and the total value of the company might go up 10-20%. The value…

You aren't taking into account multiple liquidation preferences, ratchets, and profit guarantees on a downround IPO that are in the term sheets for this round.

Warning of such "dirty term sheets" is Benchmark's Bill Gurley. http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/

http://abovethecrowd.com/2016/04/21/on-the-road-to-recap/

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

#248

Post by eru » Thu, Jun 02, 2016, 4:58 AM UTC

big_youth wrote: post #241

eru wrote: post #220

Earlier quoted context omitted.

Cynically: that's why Uber doesn't want to win that kind of war. They want to get in, and then work with the locals to establish some `sensible regulation'. Regulation that just happens to be cumbersome enough to deter new small-scale entrants.

This is not true in Austin. The city passed a fingerprint and registration requirement and uber and lyft both left the following weekend. Smaller competitors are growing fast. I miss the nice apps and cheap prices but the alternatives are ok.

Oh, I didn't say it always works (or even that it works most of the time.) Just that it's an obvious strategy for Uber to pursue.

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

#249

Post by amasad » Thu, Jun 02, 2016, 5:02 AM UTC

refulgentis wrote: post #217

wavefunction wrote: post #211

Earlier quoted context omitted.

They just fund radical wahhabi madrassas all over Asia and the Middle East and provide support to terrorist groups like ISIS and Al Quaeda, no biggie...

Nonsequitor. The crown itself has no interest in spreading Wahhabism, but they do have an interest in keeping Wahhabis happy to avoid religion turning into an enemy of the state, or even worse, the state itself.

It's very well-known and documented the co-evolution of Wahhabism and Al Saud. Maybe now they're cutting back and distancing themselves but the damage has been done.

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

#250

Post by dgacmu » Thu, Jun 02, 2016, 5:11 AM UTC

morgante wrote: post #219

nilkn wrote: post #214

Earlier quoted context omitted.

They do. A "limo" is just a towncar. It's no different from something like UberBlack. Go to any major airport and you'll see a bunch of them lined up waiting for passengers nearby the taxis. I started using this service before Uber because taxis were extraordinarily unreliable and this service was always spot on. And as time has went on I see no reason to switch to Uber for this particular well-defined and scheduled-…

I think you view of the world is rather skewed if you think "normal" people take a town car to the airport. Even as a well-paid software engineer, I never use UberBlack—only UberX.

It's very location-dependent. In Pittsburgh, a taxi to the airport can be $55, and a towncar service $75. More importantly, you can make a reservation for the towncar in advance, and know that they'll be there, instead of playing 6am taxi roulette, which often does not work well. A lot of the faculty at CMU use towncar services for that reason.

Pittsburgh's monopoly taxi service from yellow cab is remarkably terrible, though, so this may not generalize. They're famous for simply not bothering to show up after you call them.