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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

#281

Post by Arnt »

mandeepj wrote: post #257
discardorama wrote: post #196

Earlier quoted context omitted.

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

> it removes the incentive for the driver to dick around and do a TSP around the city to drive up the fare With GPS, drivers can't do this.

Ask the customer, "you want the shortest route, right?" and wait for yes. Now you have explicit permission to drive anything that's arguably the shortest route. So you pick one that passes the largest number of traffic lights and watch the meter tick as you wait in front of each traffic light.

Padding by 300% is a challenge, but a bit isn't.

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

#282

Post by em3rgent0rdr »

froo wrote: post #258
woah wrote: post #224

Earlier quoted context omitted.

What advantage will such a system have?

Probably none. By having an open system, prices will invariably get pushed down (better for end users) which will deincentivize drivers (worse for end users) There may be some equilibrium somewhere, but I don't believe it will be in the users best interest having to wait for cars. Just my thoughts. I'm probably wrong.

By having an open system, since there is no longer a corporate middleman entity which takes a cut off a profit, and since anyone can compete, therefore prices will get pushed down. But just like any other perfectly-competitive system (https://en.wikipedia.org/wiki/Perfect_competition), the price in equilibrium will approach the marginal cost when marginal cost equals marginal revenue, not get pushed down indefinitely. I guess that would approximately equal to the market price of uneducated labor willing to drive plus the cost of the car+gas usage, insurance, etc. So price won't drop lower than what is needed to get people to actually drive the cars.

Now of course, maybe also need to be concerned about autonomous cars using this p2p app, in which case just need to pay a slave robot with the minimal energy it requires to drive.

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

#283

Post by encoderer »

DavidWanjiru wrote: post #260
discardorama wrote: post #196

Earlier quoted context omitted.

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidize some part of the equation strikes me as underhanded, as opposed to purely being innovatively disruptive.

No it's called priming a two sided market. Do you think supply and demand grow in harmonious lockstep?

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

#285

Post by brohee »

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.

The scale at which Uber operate is laughably small compared to real logistic companies like Maersk...

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

#286

Post by ulrikrasmussen »

discardorama wrote: post #196
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…

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

Surely the length of the ride must also be a factor? Otherwise, the drivers would lose incentive to take on long rides.

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

#287

Post by waterhouse »

DavidWanjiru wrote: post #260
discardorama wrote: post #196

Earlier quoted context omitted.

> So where's all this cash going? Is the driver side being subsidized to a ridiculous degree still (this is, actually, my guess)? I was in India recently. The driver said that when Uber started out, they'd give each driver Rs. 60K/mo (about $1000/mo) just to sign in for 10 hours/day, even if they did not give a single ride. Now, Uber pays by the number of rides and not a portion of the actual fares. So, for example,…

If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidize some part of the equation strikes me as underhanded, as opposed to purely being innovatively disruptive.

philosophically similar to the medallion racket

This comparison strikes me as bizarre. The medallion racket is lobbying politicians to use the force of the law to prevent competitors from doing business. What discordorama describes is paying people money to install and sign into your app. This is... either a poorly designed incentive system that was then fixed, or a clever campaign that gets a lot of future drivers through the earliest hoops and puts them in a position where it's easy to incentivize them to start driving. (Clever to the extent that that works.)

I can't see why you think there's a similarity, other than that you think they're both underhanded, and that they're both done by companies providing taxi-like services.

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

#288

Post by chillydawg »

encoderer wrote: post #283
DavidWanjiru wrote: post #260

Earlier quoted context omitted.

If Uber, at first anyway, pay drivers regardless of rides made, then aren't such tactics philosophically similar to the medallion racket in America? To subsidize some part of the equation strikes me as underhanded, as opposed to purely being innovatively disruptive.

No it's called priming a two sided market. Do you think supply and demand grow in harmonious lockstep?

They do if you don't mind waiting 30 years, but the Valley wants billions tomorrow.

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

#289

Post by brohee »

tim333 wrote: post #120
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…

>plausible scenario Uber becomes the cab of choice for 2.5bn people, the rough number who have cell phones. Value those at $50 each and you have a $125bn valuation for the floatation. Not sure it'll happen but that's probably the kind of thing the investors are thinking.

Google Play Store says between 50 and 100M installations...
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