Uber is dank and lekker.
Why I don't believe in Uber's Success
351–360 of 413 posts
Re: Why I don't believe in Uber's Success
#352I live in Singapore and Uber is a little cheaper than the excellent cab services which operated here even before Uber. There is a big competitor to Uber here called Grab. I switched to Uber because their service is good, drivers are gracious and cars are nice and they give me good offers. Last year I took 300 Uber rides, never once taking the usual Comfort Delgro Cab because their drivers suck. If prices were the sam…
I live in India and Uber / Ola (Uber's domestic competitor) are a godsend! In India we have Autos(https://en.wikipedia.org/wiki/Auto_rickshaw) And the drivers were (are?) ill mannered, demand exorbitant fairs. But Uber changed that. Since the drivers know that the ratings matter, they are nicer. Yes, one in a while you still get a negative experience, but as a whole. it's whole lot better.
For most of the Indians, cars rides are expensive. But I wouldn't mind if the Autos operate the same way Uber for cars work. Ola is already offering Auto rides in the same manner.
Even though I own a car, I don't enjoy driving because of traffic conditions and use Uber and Ola just because I don't feel like driving on a particular day.
I desperately hope that the Uber model succeeds in India, going back to what it was before is too painful to think about.
Re: Why I don't believe in Uber's Success
#353I think one of the biggest points being missed here is that Uber may very well be an iceberg. Meaning moving people is literally just the tip, but to get to the rest you have to subsidize the hell out of moving people.
The fundamental problem with what Benjamin pointed out with the lack of benefits with network effects, only applies when you are thinking about moving people and only thinking about 1 singular network. Sure, you and I may only want to go from point A to B within my city.
I think the real value for Uber is when they have this huge network of constant activity between most points within any city/country, the value proposition to carry cargo goes through the roof.
Imagine being able to send a document (or a package) anywhere else within the city in 20 minutes.
Amazon is experimenting with Drones for quick delivery, but just imagine being able to purchase something on Amazon, Walmart, Target, and get it within 30 minutes from an Uber driver.
Their network effect looks different than most others, say Facebook, because the real value is a network effect of networks. i.e. they have highly concentrated networks within cities, and they have a high concentration of city-networks within states, and outward.
The clear value proposition there is one can easily move a package from your house through your network within your city, to another network in an adjacent city, and on and on to say the next state.
Right now, sure you can ship something 'overnight' via FedEx relatively long distances within the US but technically it's not REALLY overnight. Technically, you have to reach the FedEx store before some cut off time (say 12 noon), so that package can then be taken to their sorting facility and make it out on the flight that night.
Imagine if there is the a real-time network where at any moment any package can be placed on the network and be on the most efficient route to the destination immediately. That's obviously the holy grail, but no longer do you have packages sitting in sorting facilities and waiting on bulky planes to take off.
They may not have these plans, but I have no inside knowledge and that's one clear advantage I can see of having a network where something is always being delivered between almost any 2 points within the network.
I assume that all of these investors are not dumb and neither is Kalanick and his team, so I suspect there is a much larger logistics play than we can imagine.
Just like Tesla isn't just a car company, but is also both a commercial power (Southern California Edison) & oil company (Exxon) plus maybe an autonomous delivery fleet all in one, I assume Uber is something similar we just can't see it yet.
Re: Why I don't believe in Uber's Success
#354Earlier quoted context omitted.
In 2015, Amazon made $596,000,000 on revenues of $107,006,000,000, or a profit margin of 0.6%. In 2012 and 2014, it lost money. How long should investors wait to see a real profit? Should they expect revenue growth to continue indefinitely?
How much profit should they make? If there was a machine where you could insert a 20 dollar bill and it spit out the 20 and an additional 12 cents, would you not use that machine? How much would you pay to buy one?
Except that if you buy the Berkshire Hathaway machine you'll put in $20 and get back a dollar.
Re: Why I don't believe in Uber's Success
#355Earlier quoted context omitted.
I always understood "make money" as referring to profit, not revenue. A business with $1 trillion in revenue and $1 trillion in expenses makes no money.
"I have a trillion-dollar business: I take dollar bills from one person and give them directly to another and repeat that a trillion times a year."
Maybe there can be profit to be made from this business too with a bit of _delay_ in between receiving and giving. I'm trying here just to imagine this company.
I think it will work because of the scale.
I'm thinking:
I take dolar bills from one person, I keep them 10 days and then I give them to another one. And I repeat this for 1 trillion dollar value.
Even if the profit in 10 days is 0.1% then you will have 1 million dollar remaining to you. What I am trying to say is that it seems to be a value in being so big, because of how big numbers math works but also because people are impressed by it (think going to a bank asking for money)
Re: Why I don't believe in Uber's Success
#356I live in Singapore and Uber is a little cheaper than the excellent cab services which operated here even before Uber. There is a big competitor to Uber here called Grab. I switched to Uber because their service is good, drivers are gracious and cars are nice and they give me good offers. Last year I took 300 Uber rides, never once taking the usual Comfort Delgro Cab because their drivers suck. If prices were the sam…
I know Singapore has very high car taxes, but is 300+ rides really less expensive than owning a vehicle yourself?
300 rides x average of approx. $15 per ride = $4500.
Cars here require a certificate of entitlement that cost around $100k and only last for 10 years if im not mistaken. So if he continued taking 300 rides every year for 10 years it would still be half as expensive.
Re: Why I don't believe in Uber's Success
#357Earlier quoted context omitted.
I can believe that's their goal: I see little reason to believe they'll succeed in it, beyond making the market a bit bigger than the current taxi/minicab market. Just because they're very good at supplying an unlicensed minicab service (apparently subsidised by VC money in many areas) doesn't mean they can (i) run a minicab business at a profit so much more efficiently than every other minicab business in history th…
I just signed up for the 4 weeks of flat rate uber pool in NY. $89 and you can use Uber Pool as much as you want for free between 6am and 8pm inside Manhattan. Previously I would spend $117 in a monthly metrocard.
As the article explains, that $89 is heavily subsidized. If you had to pay $200 for that same monthly pass you would probably reconsider.
Re: Why I don't believe in Uber's Success
#358Sure there are lots of losing scenarios. But there are a couple of winning scenarios too, and one - becoming a natural monopoly in mobility services - is a very big win indeed. I assume that the high valuation partially reflects that very small but non-zero probability of success. Sure, the US government doesn't like monopolies, but shutting one down involves proving that consumers are being harmed.
Let's play out the monopoly scenario. Let's also assume that non-autonomous vehicles are banned. I can't imagine any future scenario where that's not true. So we have roads full of Uber vehicles and no other vehicles. The government will choose to get out of the road building and maintenance business. Uber will gladly step in and take on a 100 year lease on the entire road infrastructure. They'll build their own autonomous recharging stations. They'll build the robots that maintain the roads. They'll build the robots that build the robots. Now Uber has really lived up to its name.
So contemplate what an autonomous mobility monopoly would do for Uber's valuation.
Re: Why I don't believe in Uber's Success
#359Earlier quoted context omitted.
Technically you are correct, but you are just nitpicking. We understood exactly what he meant.
My point was the meta-search engine will eliminate the friction and eat the whole pie.
Just as they have, interestingly, in the airline industry. Most people go to kayak, hipmunk, skyscanner, monondo, etc. The existence of meta search engines are a hint that the service is a commodity and margins will be slim.
Re: Why I don't believe in Uber's Success
#360Earlier quoted context omitted.
JP Morgan Chase and Deutsche (not exactly the model for integrity) have recently opted not to work with Uber because of its lack of disclosure.[0] Besides, take another look at that table above: not a confidence-inspiring list. [0] https://www.bloomberg.com/news/articles/2016-11-07/banks-sai...
There's also several links to sites that already have the financial data from Uber. Either you believe that those leaked financial data is real, or you believe they are fake. If you believe the numbers and the scope of the loss, are you saying that they would have that data and allow that data to leak, but they wouldn't provide it to JP Morgan or DB?
There's financial data out there, but Uber won't provide official financial data to banks for their customers to scrutinize. That makes it hard to assume that everything is both on-the-level and healthy.
Edit: Anyway, what I believe is irrelevant. I don't have the option to invest (aside from getting a job there) or short.