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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

#291

Post by HappyTypist »

buzzdenver wrote: post #215
macspoofing wrote: post #140

Earlier quoted context omitted.

>Why the downvotes? I think it's your first sentence. You can't just throw that out there as if everybody knows what you're referring to. I certainly don't. I don't follow the company religiously, but I have no recollection of anything majorly evil done by Uber.

I' not the OP, but he could have referred to this: http://www.theverge.com/2014/8/26/6067663/this-is-ubers-play...

Which is out of context because Uber only started doing it after they caught Lyft bootstrapping that way.

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

#292

Post by sleepyhead »

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,…

Grab is doing the same here in Malaysia.

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

#293

Post by golergka »

CPLX wrote: post #49
SilasX wrote: post #44

Earlier quoted context omitted.

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…

You're talking about current market size, but world markets of such goods and services are growing, especially in developing countries.

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

#294

Post by AnAfrican »

pknerd wrote: post #267
Mendenhall wrote: post #190

Earlier quoted context omitted.

I dont think it will turn into a controversy at all, but a smart competitor versed in propaganda could easily hit that attack vector. "Ride with Uber and help raise money to suppress women!" "How do you feel as a Uber driver knowing board members dont think women should be able to drive and your actions help support that?"

SO if a woman does not drive she is suppressed? So far no woman was elected as a President either in US. Guess women are oppressed there?

not being allowed to do something is oppression.

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

#297

Post by pbreit »

adventured wrote: post #235
eru wrote: post #226

Earlier quoted context omitted.

Alphabet, Google's parent and briefly the most valuable company on the planet has a market cap of 510.2B USD right now. And no debt to speak of, I think. Normally you need to add the equity market cap and the debt to get the total financial structure of the company. (I just googled, and I think that sum is called the `enterprise value', if you subtract any cash holdings.) See http://arstechnica.com/apple/2011/08/does…

You're talking about one of the most successful companies in the history of business, in Google. Their speed to their present scale in terms of profit - from founding to now - is unprecedented. Add to that that they make most of their money from operating a hyper-margin software service in terms of costs (with nothing at all similar to Uber's drivers and regulatory problems), one that has been almost entirely unregul…

You can use a lot of superlatives to describe Uber's ascent. For starters, much faster revenue and valuation growth.

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

#298

Post by _jgdh »

ulrikrasmussen wrote: post #286
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,…

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

There isn't any incentive sadly. Uber drivers absolutely hate taking long trips for this reason. Considering the extreme traffic issues, it typically takes 13-14 hours of driving to complete 15 rides. If a single user wants to go to the airport (50km away from city centre in Bangalore), it becomes difficult to hit that quota no matter how hard they try. They can't cancel a trip to the airport either, because if they cancel more than one trip in a day they lose the 15-ride incentive. So if they get an airport ride and they're short on time to hit the incentive, they request the user to cancel.

The strategy I've seen in response to this incentive scheme is to work 4 14-hour days, ensuring that they hit the incentive no matter what. The money made off the actual ride is peanuts ($1/ride, maybe) so they absolutely need to finish 15 rides to get $75. Working 4 days a week, 16 days a month nets the driver $1200/month. Which is an incredible income by Indian standards considering most graduates from good colleges make a lot less.

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

#299

Post by DavidWanjiru »

waterhouse wrote: post #287
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.

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 t…

My sense of Uber has been a company using technology innovatively to provide a much better user experience, while using currently existing but idle resources (the cars and drivers that serve customers on Uber but otherwise don't for various reasons, reasons Uber has rendered irrelevant, hence the resistance they've seen). But if they need to subsidize their drivers or customers, what does that say about their value proposition? To me, it makes them just another company using mundane, old school tactics to outdo their competition. Medallions and subsidies are old school tactics. One keeps new players out. The other throws old players out. Neither has anything to do with the value you bring to the table.

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

#300

Post by perbu »

hkmurakami wrote: post #247
birken wrote: post #27

Earlier quoted context omitted.

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/

Did Uber accept any such preferences when taking investments? I thought only clueless entrepreneurs fell for such trickery.
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