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Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

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Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#111

Post by wpietri »

sleepychu wrote: post #8
hatred wrote: post #5

Earlier quoted context omitted.

I couldn't understand the part about an employee and loosing my job. Are you saying that they won't be able to sell their equity even at a steep discount in 90 days? Even, if they incur a loss of ~30-40% over the current prevailing price; it would still be a fortune. They can easily do that to save on the tax or did you mean something else?

1) They're worried they'll be fired to make the IPO work. 2) They're worried the value of their options will drop out before they have the option to exercise them.

And I would add that in situations like this, employees should be very careful assuming that they'll get a price anything like what the most recent investors are getting.

Check out Table 2 here, down on page 45:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455

It uses Square as an example. The headline valuation price from their E round suggests that a share of stock was worth $15.46. But later investors can have all sorts of preferences. Common stock, though, is valued at $5.62.

As people who were here for the last bubble know, this is exacerbated when valuations dip. I know a number of people who worked their asses off for companies that got sold for hundreds of millions of dollars. But the employees saw nothing, because investors get paid first.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#112

Post by djsumdog »

StevePerkins wrote: post #16
albertgoeswoof wrote: post #6

It is strange that private investors are willing to fund my discounted travel.

I seriously don't understand the endgame here. Apparently, it WOULD BE possible to completely kill off the legacy taxi industry given 10 years or so of artificially subsidized pricing. So I understand the concept of disrupting a previous oligarchy, replacing it with a new monopoly, and then profiting through rent seeking. But where are the barriers to entry that would allow Uber to solidify as that new monopoly? Ther…

So the big question: Is Uber too big to fail? It looks like it will IPO at this point, it will keep finding more drivers and then cutting their wages .. it has a huge market. I refuse to use it, preferring the bus or Lyft when I absolutely have to ...

If Uber does go under within the next ten years, will we see a reemergence of people taking cabs and drivers getting paid better?

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#113

Post by ErikVandeWater »

Judgmentality wrote: post #44
__sha3d2 wrote: post #29

Earlier quoted context omitted.

> And to top it all off, the biggest thing driving their valuation recently, self driving cars, appears to be in serious jeopardy, can anyone make a credible case of Uber having self driving fleet in the next 5 years? Uber currently sends teams to major cities all over the world to build maps for self driving cars. They outfit cars in those cities with 6 figure camera rigs and enable 'passive collection', where maps…

And if those maps were built with illegally obtained lidar technology (or just if the judge thinks they might have been ), they become fruit of the poisonous tree.

I thought fruit of the poisonous tree was only relevant in evidence collection: https://en.wikipedia.org/wiki/Fruit_of_the_poisonous_tree

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#114

Post by __sha3d2 »

SyneRyder wrote: post #52
__sha3d2 wrote: post #29

Earlier quoted context omitted.

> And to top it all off, the biggest thing driving their valuation recently, self driving cars, appears to be in serious jeopardy, can anyone make a credible case of Uber having self driving fleet in the next 5 years? Uber currently sends teams to major cities all over the world to build maps for self driving cars. They outfit cars in those cities with 6 figure camera rigs and enable 'passive collection', where maps…

I wonder if one of those international cities is Perth, Australia? We had a news report today that Perth is launching trials of a self-driving on-demand taxi service in April 2018: http://www.zdnet.com/article/navya-bringing-driverless-vehic... (I realize the trials aren't Uber, but if our government is getting ready to allow self-driving taxis, I imagine Uber would want to be prepared & ready to launch ASAP.)

Perth was not the first AUS city ;)

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#115

Post by wpietri »

djsumdog wrote: post #96
wpietri wrote: post #87

Earlier quoted context omitted.

Even if they manage to kill their competition -- and I'm not expecting they will -- I don't understand what their endgame is. I don't see what their moat is. Ridesharing companies are not hard or expensive to start. They'll have a hard time extracting monopoly rents, and there isn't much of an economy of scale they can reap. And once autonomous cars become part of the picture, I think they're in an even worse positio…

> Ridesharing companies are not hard or expensive to start. There is a lot of work that goes into the infrastructure behind companies like Uber and Lyft. You need good engineers that build products that are reliable and well tested, to work 24/7. It is a hard problem. A lot of the smaller city taxi companies that have apps contract to larger vendors as well.

Sure. But compare with Flywheel, which has less than 50 employees and produces a perfectly adequate app. Infrastructure is also much easier at small scales. And as you point out, this is pretty easy to outsource. That means that that Uber's engineers are not making much of a mote.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#116

Post by madeofpalk »

ProAm wrote: post #81
JumpCrisscross wrote: post #10

Uber had $6.6bn on hand at the end of June [1]. That means they are down to $5.1bn. Absent cost-cutting, that implies a 9 to 12 month runway. Even if SoftBank injects $1bn, that could only mean a few months’ runway. A large fine in the Waymo case [2] could literally bankrupt them. [1] https://venturebeat.com/2017/08/23/uber-is-still-burning-cas... [2] https://mobile.nytimes.com/2017/11/29/business/waymo-uber-tr...

Honestly if they need to make money, they can lay off a ton of staff, and license their logistics software to a lot of companies. It wouldn't be what their game plan has been, definitely a severe pivot but they would be a money printing machine for years to come.

Also they could maybe stop literally giving away free money.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#117

Post by djsumdog »

AndyMcConachie wrote: post #23
StevePerkins wrote: post #16

Earlier quoted context omitted.

I seriously don't understand the endgame here. Apparently, it WOULD BE possible to completely kill off the legacy taxi industry given 10 years or so of artificially subsidized pricing. So I understand the concept of disrupting a previous oligarchy, replacing it with a new monopoly, and then profiting through rent seeking. But where are the barriers to entry that would allow Uber to solidify as that new monopoly? Ther…

Exactly. The only thing that keeps me coming back to Uber is their lower cost. And sometimes when $COMPANY is paying I don't even care about that. If I'm at a taxi stand why not take the taxi in front of me. In economic terms the switching cost for the consumer is low. Really low. I'm not locked in and Uber is not Amazon that is spending their runway on capital investment. They're spending their capital on paying dri…

> The best bet for Uber right now would be to close up shop, return the money to their investors, and cease business.

That's kinda funny. I'm sure you know it will never happen. We're talking about billions in countries all over the world. Get out of an Airport in London, Melbourne, Auckland, Atlanta, Vegas .. you can get an Uber.

That combined with their questionable ethical track record (which I don't think has really turned around since they symbolically hired Eric Holder's company to do damage control).

If Uber does fail, it will do it gloriously and colossally.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#118

Post by ams6110 »

wpietri wrote: post #102
njj023 wrote: post #76

Earlier quoted context omitted.

Every person who I know has left Uber this year is at some company HN would probably agree as "better" (FANGs as backup, startups if more adventurous). So unless you're in the handful caught in the crossfire of these issues, Uber is an extremely strong brand name on a resume.

Maybe. I've interviewed people eager to leave Uber and the name was mixed for us. I see it as an indicator of technical talent, but a culture risk for sure. Clearly a lot of people at Uber at least acquiesced in the face of unethical, abusive, or outright criminal behavior. That's not a character trait I'm excited about having on my teams.

You have to understand human nature though. Most people are more or less followers. They will do whatever a strong leader tells them to do--unless it's something clearly, blatantly wrong or illegal--and they will rationalize it.

If Uber had ethical leadership, there would be no worry about any of the technical talent, and they would be the very same people.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#119

Post by jethro_tell »

jdp23 wrote: post #93
jethro_tell wrote: post #59

Earlier quoted context omitted.

Probably, but can they successfully go public with that unsettled?

Can they successfully raise money at a huge valuation with that case unsettled, news that they (almost-certainly-illegally) hid a data breach, a potential class-action lawsuit about sexual assault by their drivers, a business model that shows no signs of breaking even, etc. etc. etc.? If so, they then probably think they can go public with all of that baggage.

That is only half of the equation though. They also have to open their books which may complicates some of those issues.

Re: Uber’s Losses Widen as SoftBank Launches Bid to Buy Shares

#120

Post by __sha3d2 »

Judgmentality wrote: post #44
__sha3d2 wrote: post #29

Earlier quoted context omitted.

> And to top it all off, the biggest thing driving their valuation recently, self driving cars, appears to be in serious jeopardy, can anyone make a credible case of Uber having self driving fleet in the next 5 years? Uber currently sends teams to major cities all over the world to build maps for self driving cars. They outfit cars in those cities with 6 figure camera rigs and enable 'passive collection', where maps…

And if those maps were built with illegally obtained lidar technology (or just if the judge thinks they might have been ), they become fruit of the poisonous tree.

I think the responder is correct that FOTPT is not applicable here, but I wonder if there is an analogous legal concept for the product of a stolen good.
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