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Uber confirms SoftBank has agreed to invest

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Re: Uber confirms SoftBank has agreed to invest

#91

Post by malandrew »

timewarrior wrote: post #34
rileymat2 wrote: post #33

If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

Autonomous cars also has a regional learning curve that benefits from having many human drivers on the road in many cities. For a purely autonomous company to enter a new market, they need to map it and there is a learning curve to building out maps sufficient to provide all the possible routes in a city. An autonomous network that can only do some routes and is useless for other routes, is going to have an expensive time scaling as they will have to put human drivers behind the wheel until they know they can operate safely in that new market.

A company with many existing human drivers can easily enlist those drivers with autonomous-car quality mapping kits. The drivers are all already driving all possible routes, so mapping a new market is much easier and cheaper. Furthermore, a mixture of autonomous cars for routes that autonomous cars can operate safely and human-driven cars for routes that are still being learned guarantees that the service is useful for any route a rideshare customer might want to take.

Lastly, you won't be able to operate a self-driving network without great ops. You need people to maintain the vehicles and provide customer service. Building out a great ops org is yet another massive learning curve for a purely autonomous company.

Re: Uber confirms SoftBank has agreed to invest

#92

Post by loceng »

elmar wrote: post #89
loceng wrote: post #78

Earlier quoted context omitted.

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. Is Tesla Preparing to Roll Out its Ride Sharing Program With the Model 3? http://www.thedrive.com/sheetmetal/13075/is-tesla-preparing-...

Of course they are preparing. Facial recognition, perhaps with voice confirmation - a good idea to have a built-in safety word or phrase so if stated then it silently triggers the authorities to intercept the vehicle - for beginning the vehicle/route to destination; the buttons in trunks should perhaps even notify authorities (?) if they are pressed while the vehicle is moving; it'd go badly for pranks amongst friends ... though hopefully the first occurrences of that will go into the news - would be good marketing anyway - might not be a good idea with further thought.

Edit re: safety word or phrase - It should also trigger recording of audio and video, perhaps they will record video and/or audio to make sure there's no shenanigans; as fun as it might be to have "fun" in a vehicle while getting driven somewhere autonomously, if it's shared then I think we as a society would opt to dissuade that behaviour...

Re: Uber confirms SoftBank has agreed to invest

#93

Post by malandrew »

timewarrior wrote: post #42
mandeepj wrote: post #41

Earlier quoted context omitted.

> Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? > Additionally you need people maintaining them. This is why I think Tesla is a bigger threat to Uber in long term. If you are not sure then refer to Tesla's plan 2 but Uber also have a counter plan - UberAir https://www.tesla.com/blog/master-plan-part-deux

I somehow feel that Autonomous drones would be easier to build than Autonomous cars. Benefits of Autonomous drones: 1. Do not need to deal other non autonomous devices while in flight. Cars needs to deal with human, other cars driven by humans. 2. Do not need to follow existing road traffic rules. 3. Lot of paths available. Cars are limited to existing roads. Drones can have a lot of flight paths. I understand that t…

> Do not need to deal other non autonomous devices while in flight.

They may also have to deal with hobbyist drones.

Re: Uber confirms SoftBank has agreed to invest

#94

Post by beager »

loceng wrote: post #78
nopinsight wrote: post #68

When I look at their runway and valuation going forward, IPO is the most probable path they will take. But it might imply some risks to the overall startup IPO scene in the future as well. Apparently Uber is bleeding about $2 billion a year and have only $6.6 billion in cash reserve. If this deal adds $1 billion more cash, then that would only last 4 years. Since full-scale self-driving cars launching across most maj…

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> IPO is good for Uber - not for society though, who will be the ones to capture the losses.

I agree with the sentiment, and it baffles me that public markets would consent to shouldering these losses, presumably by overpaying for Uber at and after IPO and riding it back down to sane levels.

Re: Uber confirms SoftBank has agreed to invest

#95

Post by typon »

timewarrior wrote: post #34
rileymat2 wrote: post #33

If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

Also Careem are strong competitors in South Asia and the Gulf

Re: Uber confirms SoftBank has agreed to invest

#96

Post by nemo3141 »

timewarrior wrote: post #60
konschubert wrote: post #55

Earlier quoted context omitted.

I think the crucial point here is really that uber's two-party networks are city-wide. Yet because Uber is operating globally, it's falsely being valued as an international two party network.

Bingo! There is no future where Uber is profitable and there isn't someone with deep pockets who wants to undercut them starting with their most profitable markets. Most riders don't have much customer loyalty, they just want the cheapest price. Drivers don't mind driving for multiple services. When a deep pocketed competitor launches with zero market share, they can compete with lower prices. If Uber responds too ea…

Amazon Flex has been around and growing. It's Uber but the drivers have packages instead of people. It will not be difficult for them launch Uber like services.

Re: Uber confirms SoftBank has agreed to invest

#97

Post by loceng »

beager wrote: post #94
loceng wrote: post #78

Earlier quoted context omitted.

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> IPO is good for Uber - not for society though, who will be the ones to capture the losses. I agree with the sentiment, and it baffles me that public markets would consent to shouldering these losses, presumably by overpaying for Uber at and after IPO and riding it back down to sane levels.

It's the controllers of large pools of money who simply make money off of transactions and who are separated from accountability, responsibility, or even caring about incomes who are making the bad decisions.

Re: Uber confirms SoftBank has agreed to invest

#98

Post by raiyu »

hatred wrote: post #27
raiyu wrote: post #8

Earlier quoted context omitted.

The $1B that is being invested at the $70B valuation is direct from the company and Softbank will be purchasing preferred shares like any other VC. These preferred shares have extra rights, things like liquidation preference, board seats, voting rights, etc. What specifically they will receive is unknown, but at the very least they will have a 1x liquidation preference on that $1B invested, which means if the company…

Thanks for the detailed explanation. I am wondering if its ever possible to board to later approve that those newly bought "common" stocks get converted to "preferred" i.e., have the same liquidation preference?

It is of course possible and just requires a board vote, but since the company doesn't receive the funds and have them, it wouldn't be a good idea.

So it's possible of course, but isn't done 99.99999% of the time.

Now if they were purchasing $1B in preferred and another $100MM in secondary maybe, but certainly not when the common shares amount is $9B would put the other existing investors in jeopardy for their own preferred shares providing their invested capital back should things go south.

Re: Uber confirms SoftBank has agreed to invest

#99

Post by marinman »

pfarnsworth wrote: post #43
rileymat2 wrote: post #36

Earlier quoted context omitted.

Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? Additionally you need people maintaining them.

Whoever solved self-driving cars could buy 10,000 cars per city. Let's say each car costs $100,000. That's $1B if paid upfront which is never the case, but let's assume. Now, each of those 10,000 cars could work 24x7. Assuming each ride is $10, and you can do 50 rides in a day (2 trips per hour on average over the entire day), that's $500 per day less electricity and maintenance. That's $5M/day with no employee costs…

While I'm bullish that self-driving will happen in our lifetimes, I think there are a lot of challenges that many are underestimating. This includes the actual technology—this is one of the most important and challenging technological breakthroughs of all time. It's going to take time and be very, very expensive to produce at scale (ie all-electric self-driving cars at $100K a piece).

Even putting that aside, I have questions about the business side of things. Demand for transportation has been pretty consistent with big lumps during the morning and evening commutes.

One of the beauties of Uber's existing business model is that it can theoretically spin up and down drivers as needed with Surge pricing. With a fleet of cars, it's not guaranteed that supply will perfectly match demand most of the time.

The counter to that, which I sort of buy, is that it will kind of be like broadband Internet. We don't even know what demand and opportunities self-driving cars will create. My hesitancy with fully embracing this is that broadband was an acceleration of something new whereas self-driving is a leap to an existing quantity of transportation. It will still change lots of things but it will take longer for things like where you choose to live to change.

Finally, my main hesitancy is the human aspect. For self-driving to make the impact that many want/believe, there's going to have to be a hard line in the regulatory sand where human-controlled cars are outlawed or limited. I don't see that happening in the United States for a long, long time.

Re: Uber confirms SoftBank has agreed to invest

#100

Post by TylerE »

rileymat2 wrote: post #36
timewarrior wrote: post #34

Earlier quoted context omitted.

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? Additionally you need people maintaining them.

Franchise!

Let some guy buy a couple of cars, clean them at the end of shift, etc.

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