Uber is the ubiquitous word for modern transport between 1 to 40kms in the western world. Ubering is a verb. Thats a whole lot of mindshare and Uber is a whole lot better than a taxi. Future demand for taxis will go up. Uber is the verb for the software layer in the middle of getting from a to b. Nobody can innovate enough in the space to displace Uber’s brand lead. Running a server is cheaper than paying a dispatche…
Hoovering is a verb, it didn't help them. Edit: Xeroxing.
So uber doesn’t have
Depreciating factories, Competing manufacturers, Supply chains Software R&D
And has expertise in establishing brand prescence and marketshare.
Uber = better taxi and demand for taxis will increase in future with or without driverless cars.
How easy is it for car manufacturers or software companies to build and displace what Uber has in operation in the transition to driverless cars? I think it’s difficult.
Uber seems to have deep experience how this market will play out and they are actually spending the money on r&d to see how it will play out and should be able to position the Uber brand which everyone in the Western world associates with taxi to clip the ticket on an increasing number of taxi rides in the future.
Google and Apple are possibly the biggest threats but they have a whole lot of anti-trust, privacy and motivation issues to overcome. Possibly Tesla has a automotive technology edge but unlikely and Tesla is constrained by its capital intensive business model.
From a net cash flow perspective, clipping tickets on taxi rides seems a profitable growth business while R&D into driverless car tech is a bottomless well but if your the largest taxi ticketer in the world it’s probably good to be at the edge of this field of knowledge.
At $26.00 a share uber needs to clip $1.00 per ride on 2.4 billion trips to get 12* earnings.
It did 10 billion rides/deliveries in 2018 and has 12 billion cash on hand presently.
It is a software business and owns the copyright to it’s software stack so should have lower operating costs than it’s smaller competitors licensing bits and pieces of their stack plus economies of scale plus one focus on getting people and things from a to b as easily as possible.
I hope it goes lower. At 26.00 - 7.00 for the cash on hand you are paying 19.00 for a verb that sells 6 tickets per day at $1.00 profit per ticket equals a 30% return on the core business which is being invested into R&D to secure brand prescence and network effects in emerging delivery technology.
That R&D can stop today and Uber will continue to print and clip the ticket for 10 billion rides per year now and for the forseeable future.
So it’s just a question of whether the current manager is a genius at deploying capital into the driverless r&d space and can get dominant market share of air taxi’s and delivery because the core of Uber (10 billion tickets per year) is a fantastic business and that definitely didn’t happen by accident and with antitrust regulations the uber app should become more profitable and dominant.
I hope it goes lower.