131–140 of 256 posts
Earlier quoted context omitted.
I doubt that there's a single full-time employee (in the US) that only costs them 50k/year. Total overhead costs are a lot higher than the employee's salary. I have no idea what the distribution of salaries look like, so this doesn't necessarily invalidate your point.
rule of thumb is 3x your salary is your cost to employer
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Have you seen software developed by the government? Outside of things like NSA spying, military things, etc, it's generally terrible, I doubt there are many governments that could pull this off
> Outside of things like... military things, etc "Aside from the most impressive engineered systems known to man kind, the government can't do anything right"
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The idea is to drag the entire ride hailing industry underwater long enough to drown out competitors, and the trick is to do this without drowning themselves in the process. This is the nature of "predatory" pricing. There is something to be said for volume and if a couple competitors die in the process then Uber's volume can only go up. Unfortunately their competitors have found a variety of ways to keep from being…
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…
However, you are right to bring up autonomous cars. I always thought it amusing that Kalanick et al were so anxious to bet the house on autonomous cars, when in fact, they are the company's greatest existential threat long-term. Once those cars are readily available and street-legal, there's nothing stopping Enterprise or Avis or the automakers themselves from becoming overnight competitors.
And once drivers are taken out of the picture, ride prices will plummet. Margins will also thin because of the likely extreme competitiveness of this market. I would not want to be an Uber investor that's for sure. In theory, the "winner" will be whoever scales the most (i.e. has the most capital to put into their fleet) and has the most effective marketing. In practice, prices may be close enough that people will rent car X because they like brand/model Y better.
If I were on Uber's board, I would advise against trying to win that war which they will lose once/if the automakers get in on it, and instead get creative about how to conquer the market in a more niche way.
Someone is going to have to program self-driving ambulances :)
Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…
I generally agree with this, however if Softbank easily fills their tender offer I wonder if it puts a crimp in the IPO plans. Lets say that Softbank's tender is filled with a bunch of executives and Kalnick contributing their shares to get a payoff (shades of Groupon's last raise before going public). What does that look like to potential investors on the roadshow? How much bump will they need to be 'promised' befor…
Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…
A third worry: Uber's brand on your resume. At every turn there just seems like increasingly shady stuff coming out of there: covering up data breaches, covering up IP theft, etc.
Frontline devs or middle management? Honestly they're some of the best talent in the valley esp if they joined in 2014 when Uber was the top destination ($19B valuation timeframe)
What's to stop Uber from slowing the burn via an increase in base prices? People would still use Uber as long as it's A) more convenient than other transportation B) better quality rides than cabs and C) just a little cheaper than cabs. There are surely other forms of revenue they can spin up too, but this seems to be pretty straightforward, especially in markets where they have already decimated local taxi firms.
Increased competition. Lyft is burning through money at an unprecedented rate to catch up with Uber given that they smell blood this year and investors ala Google are willing to subsidize the burn. At some point, this has to stop but 2017 does not seem to be the year. Source: Lyft pushes back profitability after increased burn - https://techcrunch.com/2017/11/14/unpacking-lyfts-projected-...
Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…
Option exercise price is 409A price, not the preferred price per share.
These two things make it highly unlikely that any option holder is truly under water.
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.
Earlier quoted context omitted.
If Uber had to, they could flip the profit switch. They haven’t chosen to because they’re reinvesting in growth, but if it was an existential question they could survive in the short term.
Reinvesting for growth is a terrible euphemism for subsiding taxi fares. When they flip the switch they become more expensive that a regular mini-cab. Customers will leave in droves, drivers will leave in droves. There s no loyalty to a middleman.
Uber may or may not be subsidizing fares, but they’re also spending tons of money on engineering and product development, both on their existing product and in an attempt to develop self-driving cars. That’s growth.
Better source, and one that the article references: https://www.bloomberg.com/news/articles/2017-11-29/uber-s-th... At this point, two things are clear to me: 1) Uber will IPO, there's just oo much money and influence behind it to stop that. 2) I'd be really worried if I was an employee about my options and also about my job. Employee's now ahve two large worries hanging over their heads..... What about my job and wh…
What happens to stock which isn't part of the IPO? Ie, all the stock owned by employees, investors, etc? Does it become instantly tradeable? I would imagine that considering the long road, a lot of people are really ready to sell. There are lots of owners that will have achieved 50X or more return, even at a low market cap. Former employees with option strike prices @ £20m, early investors that got in @ £150m.... Tha…
Share price does often drop when the lock-up expires, but usually not as much as you'd expect--the number of restricted shares to be release and resulting liquidity effects of that expiration are well know and disclosed in public filings. So this mostly gets baked into pricing well in advance.