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Neither, and New: Lessons from Uber and Vision Fund

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Re: Neither, and New: Lessons from Uber and Vision Fund

#11

Post by paxys »

rdlecler1 wrote: post #6

He’s forgetting that Uber’s goal is to be a driverless platform in which case they’d capture significant portions of the drivers margin. Now a software company. On Vision Fund, he seems to think that there is only one viable VC model. I happen to disagree. Warren Buffet made a lot of money investing in boring companies, and now technology is spilling into ancient markets to transform them. Seems like those companies…

> Uber’s goal is to be a driverless platform

Everyone keeps using this argument but I don't buy it. Uber itself hasn't once stated that this is their goal, not even to shareholders. When the company was founded in 2008 self driving cars weren't on anyone's radar. And it ignores the fact that if/when self driving cars become viable the entire "ridesharing" landscape will be instantly changed, and Uber will not have any inherent advantages over Google, Cruise, all the auto manufacturers and any other one of the 50+ companies currently in that space. Rather than connect riders and drivers they would have to buy and maintain vehicles in every city in the world.

Uber is currently, at best, keeping the self driving option open by putting some research dollars into it. The fact that they are betting the future of their company on it is just online speculation.

Re: Neither, and New: Lessons from Uber and Vision Fund

#13

Post by human20190310 »

yuy910616 wrote: post #8

This is a great article but I doubt many people will actually make it to the second half...where everything is tied together.

I found it incomprehensible from the start.

EDIT: The first five sentences invoke Uber, the author's previous article, the Wall Street Journal, Gurley, Damodaran, and two different dubious valuations.

Re: Neither, and New: Lessons from Uber and Vision Fund

#14

Post by amelius »

What happens if people start ordering taxis from within Google Maps? And what if Google Maps adds more taxi services? What if Android starts integrating the function of ordering taxis that way? What would happen to Uber's value then?

You can't "own" a market unless you also entirely own the way people access that market.

Re: Neither, and New: Lessons from Uber and Vision Fund

#15

Post by zwieback »

When I was in Singapore I used the "grab" app, which is super popular and has both regular taxis and uber-like drivers (and food and other stuff).

What's different about Singapore and grab? Seems like a good model to me but it must involve heavy regulation to work.

Re: Neither, and New: Lessons from Uber and Vision Fund

#16

Post by zwieback »

amelius wrote: post #14

What happens if people start ordering taxis from within Google Maps? And what if Google Maps adds more taxi services? What if Android starts integrating the function of ordering taxis that way? What would happen to Uber's value then? You can't "own" a market unless you also entirely own the way people access that market.

Since I already use Maps for so many things I would definitely use it for taxis if the rates were comparable. As long as Uber is somewhat cheaper it's not that hard to open their app.

Re: Neither, and New: Lessons from Uber and Vision Fund

#18

Post by tempsy »

I think Uber missed the opportunity to be a more full fledged wallet (which is what Grab started a few years ago). They have a "cash" product now where you can load money, but it's too little too late IMO, and the incentive to load money vs use your cc is small (e.g. tiny discount).

Starbucks is the obvious model here...IIRC they have one of the most success mobile payment apps in the country, even competing with Apple Pay despite being relevant to them alone. They have something like $1.6 billion in balances, which they can monetize (free loan + interest).

Re: Neither, and New: Lessons from Uber and Vision Fund

#19

Post by tmh79 »

onlyrealcuzzo wrote: post #5
luckydata wrote: post #2

The whole beginning of the article is based on the assumption that Uber's story is played out. I don't think we can call that one yet, IMHO the market hasn't discovered what is Uber WORTH just yet.

When does the market discover what something is worth? I only know of two main lines of thinking: 1) that the market is more or less a random walk, and prices are approximately random. 2) that the market is efficient and the price at all times accurately reflects all available information. So Uber is either priced accurately (forever) or randomly (forever). I'm not familiar with a third line of thinking that it's ran…

The idea is that ridesharing is still early on in the monetization/profitability/growth curve. Right now, its possible to value online advertising companies (google, fb, linkedin before acquisition etc) based on some multiples of revenue and growth. What those multiples are fairly well agreed upon and relatively static. The argument above is that the multiples are not well defined in the rideshare sector, and its hard to find a stable valuation for these companies based on that. As uber and lyft turn profitable-ish in the next 6 - 8 quarters and focus on revenue growth as opposed to purely gross bookings growth as well as stemming losses, the multiples these companies are valued on are going to change a lot.

Re: Neither, and New: Lessons from Uber and Vision Fund

#20

Post by tmh79 »

Despegar wrote: post #10
rdlecler1 wrote: post #6

He’s forgetting that Uber’s goal is to be a driverless platform in which case they’d capture significant portions of the drivers margin. Now a software company. On Vision Fund, he seems to think that there is only one viable VC model. I happen to disagree. Warren Buffet made a lot of money investing in boring companies, and now technology is spilling into ancient markets to transform them. Seems like those companies…

I don't understand how people think self-driving is Uber's solution. Right now drivers are a variable cost. Is Uber going to buy or lease fleets of self-driving cars (that will depreciate and need to be replaced)? That seems like a CapEx heavy business and it's not clear it's a better one from what they have right now, which is only possible because it's a giant labor law hack at scale.

uber will likely be the demand aggregator for self driving fleets, as well as own a medium sized self driving fleet, similar to how amazon is a demand aggregator for online retail, as well as maintaining its own physical products for high profit/targetable areas.
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