Uber Sets Valuation Record of $17B in New Funding • Hacker News Board

Re: Uber Sets Valuation Record of $17B in New Funding

#21

Post by opendais » Fri, Jun 06, 2014, 5:39 PM UTC

ivanca wrote: post #11

opendais wrote: post #9

Earlier quoted context omitted.

http://www.washingtonpost.com/blogs/dr-gridlock/wp/2014/06/0... Given they are getting banned in entire markets, I think this evaluation is crazy. UPS, Fedex, etc already have software just as advanced for planning their routes. Uber isn't going to magically beat them somehow. Heck, part of why they lean on the USPS is there is some economics in delivery outside of big cities that create a situation where it makes no…

They are expanding pretty fast; have you heard of a (not so) far away country called Colombia? Well, they are already here; as they will be in all the nations that allow them to. Getting banned hurts them, but there is no universal ban in sight.

They are expanding on regulation arbitrage. Being able to bend and/or break the rules by using contractors.

http://bits.blogs.nytimes.com/2014/04/17/uber-faces-rebukes-...

"Oh lets operate in Paris and not pay the licensing fee for a taxi service." Etc.

They've been completely and/or partially banned by more markets, larger markets than the entire country of Colombia at this point.

It is the same thing as AirBNB. You build the software service and then hire out contractors who don't comply with local laws and rake in the money.

I don't see that as a good, sustainable service at an evaluation larger than the entire US taxi market in the US. http://www.ibisworld.com/industry/default.aspx?indid=1951

They are going to hit like AirBNB was and have to play by the same rules as everyone else which will squeeze their margins. :/

Maybe this speaks to my bias against people who bend reasonable rules for profit.

Also, many of the people who were looking into investing agreed with that: "The bidding for Uber was so heated that some venture capital and private equity investors bailed out after the valuation soared beyond $10 billion, according to people familiar with the situation, who asked not to be identified because the talks weren’t public."

Re: Uber Sets Valuation Record of $17B in New Funding

#22

Post by jasonbarone » Fri, Jun 06, 2014, 5:41 PM UTC

Here is some fun Uber-related stuff from Baltimore, MD:

UberX is cheaper than taxis for the short trips in/around the South Baltimore downtown area (by the sports stadiums). These are the quick trips jumping around the bar/restaurant areas.

An UberX is only $30-$40 from the Inner Harbor area to most metropolitan areas 20-25 minutes outside of Baltimore, which is a crazy good deal, especially if you split fares.

I've yet to see purge pricing or a lack of available cars on weekends in the major going out areas like Fells Point, Federal Hill and Canton.

I've seen "normal" people with Uber on their home screen.

I've heard quotes like this: "I spend so much money on Uber it's absurd." "I sold my car and use Uber." And "It's so convenient you can't NOT use it."

So in regards to Baltimore, MD, I agree with the top commenter. This a real business doing really well here from a user's perspective.

Re: Uber Sets Valuation Record of $17B in New Funding

#23

Post by untog » Fri, Jun 06, 2014, 5:42 PM UTC

austenallred wrote: post #4

The "this valuation is crazy" and "this proves a bubble" comments are filling up my Twitter feed and HN, but I couldn't disagree more. Call me crazy, but I think this valuation is completely fair. For a few reasons: Uber has serious revenue. They do more trips in San Francisco than taxis do. This isn't a pie-in-the-sky "there will be money there, I'm sure of it" thing. They bring in billions, and they're starting to…

They will be successful in San Francisco, of that I have no doubt. From what I understand the taxi market there is horribly broken, Uber saw a gap in the market and leapt at it.

The mistake, IMO, is assuming that they will be able to replicate that in other cities. In NYC you can get a taxi 90% of the time by holding your hand up in a street corner. At peak times that's more difficult, but that's also when Uber has surge pricing. They will hold their own and take over the premium market from various non-descript livery car companies - but only the premium market. They won't take over the taxi market as a whole. Much the same applies to London.

Also, much of their current success is based upon how heavily regulated and backwards taxi authorities are. For example, in NYC taxi drivers are not able to use phones or navigation aids, and hailing by smartphone is in its infancy. But that won't be the case forever.

So yes, they deserve a good valuation. But, to me, there are still a lot of questions about whether they will expand to fit this valuation.

Re: Uber Sets Valuation Record of $17B in New Funding

#24

Post by w1ntermute » Fri, Jun 06, 2014, 5:42 PM UTC

opendais wrote: post #9

austenallred wrote: post #4

The "this valuation is crazy" and "this proves a bubble" comments are filling up my Twitter feed and HN, but I couldn't disagree more. Call me crazy, but I think this valuation is completely fair. For a few reasons: Uber has serious revenue. They do more trips in San Francisco than taxis do. This isn't a pie-in-the-sky "there will be money there, I'm sure of it" thing. They bring in billions, and they're starting to…

http://www.washingtonpost.com/blogs/dr-gridlock/wp/2014/06/0... Given they are getting banned in entire markets, I think this evaluation is crazy. UPS, Fedex, etc already have software just as advanced for planning their routes. Uber isn't going to magically beat them somehow. Heck, part of why they lean on the USPS is there is some economics in delivery outside of big cities that create a situation where it makes no…

> Given they are getting banned in entire markets, I think this evaluation is crazy.

Well, I'm sure they will spend at least some of that $1.2b to bribe politicians into reversing those bans.

Re: Uber Sets Valuation Record of $17B in New Funding

#25

Post by mdemare » Fri, Jun 06, 2014, 5:42 PM UTC

quaunaut wrote: post #10

Prepending Edit: If you're reading this and have a lot more familiarity in how investments of this kind are made, and what kinds of things these investors are thinking, I really am making this post looking for education. I didn't finish college, and don't know a lot, but I'm trying. If you'd rather not stir the pot by talking here, my e-mail is in my profile. The one thing that makes me skeptical about this, is histo…

"From what I'm seeing, the entire US Taxi/Limo market is $11bn in value." That sounds incredibly low. That's twice the value of KING, and cabs are a lot bigger than Candy Crush.

Maybe you mean the market is $11bn/year in revenue (or even in profits)?

Re: Uber Sets Valuation Record of $17B in New Funding

#26

Post by MarkPNeyer » Fri, Jun 06, 2014, 5:42 PM UTC

austenallred wrote: post #4

The "this valuation is crazy" and "this proves a bubble" comments are filling up my Twitter feed and HN, but I couldn't disagree more. Call me crazy, but I think this valuation is completely fair. For a few reasons: Uber has serious revenue. They do more trips in San Francisco than taxis do. This isn't a pie-in-the-sky "there will be money there, I'm sure of it" thing. They bring in billions, and they're starting to…

i'm betting in a few years they'll have an API for motion.

i have this stuff here. it weighs this much, here's the shape. i want it over there by this time bound.

whether that motion is carried out by drivers in cars, drones, autonomous shipping vessels, nanobots, whatever. it's going to be huge.

Re: Uber Sets Valuation Record of $17B in New Funding

#27

Post by quaunaut » Fri, Jun 06, 2014, 5:43 PM UTC

mdemare wrote: post #25

quaunaut wrote: post #10

Prepending Edit: If you're reading this and have a lot more familiarity in how investments of this kind are made, and what kinds of things these investors are thinking, I really am making this post looking for education. I didn't finish college, and don't know a lot, but I'm trying. If you'd rather not stir the pot by talking here, my e-mail is in my profile. The one thing that makes me skeptical about this, is histo…

"From what I'm seeing, the entire US Taxi/Limo market is $11bn in value." That sounds incredibly low. That's twice the value of KING, and cabs are a lot bigger than Candy Crush. Maybe you mean the market is $11bn/year in revenue (or even in profits)?

Right, it's $11bn/year in revenue, averaged over 5 years. Is that not usually used in determining the value of a given market?

Re: Uber Sets Valuation Record of $17B in New Funding

#28

Post by RV86 » Fri, Jun 06, 2014, 5:43 PM UTC

quaunaut wrote: post #10

Prepending Edit: If you're reading this and have a lot more familiarity in how investments of this kind are made, and what kinds of things these investors are thinking, I really am making this post looking for education. I didn't finish college, and don't know a lot, but I'm trying. If you'd rather not stir the pot by talking here, my e-mail is in my profile. The one thing that makes me skeptical about this, is histo…

I could be wrong, but I think that's $11bn in revenue, not value. $17bn valuation for Uber makes a lot more sense with this lens -- they are rapidly accumulating a large share of that $11bn/year market.

Re: Uber Sets Valuation Record of $17B in New Funding

#29

Post by opendais » Fri, Jun 06, 2014, 5:46 PM UTC

w1ntermute wrote: post #24

opendais wrote: post #9

Earlier quoted context omitted.

http://www.washingtonpost.com/blogs/dr-gridlock/wp/2014/06/0... Given they are getting banned in entire markets, I think this evaluation is crazy. UPS, Fedex, etc already have software just as advanced for planning their routes. Uber isn't going to magically beat them somehow. Heck, part of why they lean on the USPS is there is some economics in delivery outside of big cities that create a situation where it makes no…

> Given they are getting banned in entire markets, I think this evaluation is crazy. Well, I'm sure they will spend at least some of that $1.2b to bribe politicians into reversing those bans.

I am sure they will be able to exert pressure from their investor community on the political community. I'm pretty sure $1.2 billion in VC money is as valuable than all of those VCs exerting political pressure to keep them in markets. ;)

I'm pretty sure there will be no bribes. :P

I think part of my issue is alot of the rules that their contractors bend/break are reasonable.

It is like my issue with AirBnb. There is a good reason for many of the 'short term' rental laws.

We aren't talking about the bullshit Tesla bans here, after all.

Re: Uber Sets Valuation Record of $17B in New Funding

#30

Post by muhfuhkuh » Fri, Jun 06, 2014, 5:46 PM UTC

austenallred wrote: post #4

The "this valuation is crazy" and "this proves a bubble" comments are filling up my Twitter feed and HN, but I couldn't disagree more. Call me crazy, but I think this valuation is completely fair. For a few reasons: Uber has serious revenue. They do more trips in San Francisco than taxis do. This isn't a pie-in-the-sky "there will be money there, I'm sure of it" thing. They bring in billions, and they're starting to…

>I imagine a world where you can get anything on demand in minutes, and in that scenario Uber is the taxi, UPS, FedEx, etc. at the same time.

And, with that, the feeling that Amazon.com will snap this company up for cash and stock is almost palpable. Forget drones, that's PR stuff for now. Uber is the real PTTH (product to the home) service.