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Uber Sets Valuation Record of $17B in New Funding

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

#31

Post by opendais »

muhfuhkuh wrote: post #30
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.

Amazon already has a PTTH service in progress and I'm pretty sure they can produce something that matches Uber for this purpose.

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

#34

Post by runako »

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…

A couple of points, without having closely looked at the Uber financing:

1) $11B is the estimate of the revenues of the US taxi & limo market. Uber aims to expand the size of that market, by drawing in people who otherwise would not have taken a taxi or limo.

2) Uber is global today, and can expand much faster than traditional T&L companies given its model. Global taxi & limo revenues are certainly higher than $11B.

3) Using $11B as the estimate of the US taxi & limo revenues, it is reasonable to assume that the market value of all US taxi & limo companies is larger than $11B. This assumption rests on the premise that if one owned all US taxi & limo services, one could generate ~$11B in cash annually. I don't know what revenue multiple is typical in this industry, but I'd be somewhat surprised to learn that it's <= 1. (Not to mention the monopoly licenses, brands, customer relationships, autos and other physical plant etc. that comes from owning these assets.)

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

#35

Post by mcintyre1994 »

Duhck wrote: post #15
ausjke wrote: post #5

how many people use taxi these days? and how often? $17B, it got to be crazy.

Well, in NYC alone there are 236 MILLION trips per year [1] Without reading that entire document, lets just say NYC is a $20bn+ market for the taxi industry... 1. http://www.nyc.gov/html/tlc/downloads/pdf/2014_taxicab_fact_...

Your market valuation puts the average fare in the region of $100, the linked document (page 10) says "The average yellow taxi fare in 2013 was $13.40" so I'm not so sure the market is $20bn, I'd guesstimate somewhere around $3-5bn for the vehicles they mention in the article.

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

#36

Post by lotsofpulp »

opendais wrote: post #21
ivanca wrote: post #11

Earlier quoted context omitted.

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…

It's a fantastic business model (low liability, high scalability), and if they can pull it off, it will be worth way more than $17B. That's the bet that these investors are making. Same thing with AirBnB (and many many other tech companies).

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

#37

Post by hershel »

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…

There's a difference between revenue and valuation. In this[1] example of taxi companies, valuation is 3x the revenue.

And the great potential of the company will show once they find a way to offer efficient shared transportation services at much lower prices, like [2]. If they do, they'll basically swim in money.

[1]not so great but a good start :http://www.mergernetwork.com/for-sale/nations-only-publicly-...

[2]https://news.ycombinator.com/item?id=7391885

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

#38

Post by 6cxs2hd6 »

Although I like using Uber as a customer:

> "Uber is creating 20,000 jobs per month, the company said in a blog post."

Really? "Jobs" as in W-2 forms and health benefits? Or independent contractors?

Not that the latter are necessarily bad, but they're fundamentally different. It is misleading to call them "jobs" in their blog headline, then switch to "partners" and "small business entrepreneurs" in the text.[1]

I understand that traditional taxi drivers don't have "jobs", either, and Uber might be a better client for a contractor than traditional taxi companies. But that's beside the point I'm talking about, which is unwelcome and deceptive PR spin.

[1]: http://blog.uber.com/uberimpact

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

#39

Post by fnbr »

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…

Assuming your figures are correct, $11bn in annual revenue allows for a much higher valuation than $17bn. One of the main methods of valuing a company is the "multiples" approach [1], which values the company at a multiple of it's annual revenue, with the multiple typically falling between 5-15.

A commonly used multiple is the price to earnings multiple of the entire industry, which is absurdly high for major tech companies- Google, for example, has a P/E ratio of ~30 [2], and Facebook has a P/E ratio of ~80 [3]. For non-tech companies, the average ratio is roughly 15.

So if we want to use the average P/E ratio, we can say that a very very very rough price for the entire Taxi/Limo market is $150bn.

[1] http://en.wikipedia.org/wiki/Valuation_using_multiples [2] http://ycharts.com/companies/GOOG/pe_ratio [3] http://ycharts.com/companies/FB/pe_ratio

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

#40

Post by selectodude »

ChrisBland wrote: post #20
ausjke wrote: post #5

how many people use taxi these days? and how often? $17B, it got to be crazy.

Hi - I'm one of the people that uses Uber and loves it. I live in a big city, Chicago, and guessing from your statement you don't live in a taxi city. Let me tell you why I love uber and hate taxis (or why I only take Uber Taxi). 1) I used to travel for work, and for me that meant getting a 5:45am cab ride from downtown Chicago to the airport. Now, I'm sure you're aware that Chicago is freezing during the winter mont…

Fellow Chicagoan here. Haven't hailed a taxi in over a year.
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