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Uber Sets Valuation Record of $17B in New Funding

bloomberg.com

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

#61

Post by conistonwater »

ChuckMcM wrote: post #45

This is an interesting valuation[1]. It shows that a workable replacement for an established service business (one suffering from large regulatory capture) is considered so significant from the perspective of these bankers. It also suggests that AirBnB could do really well if they went back to the well (not that I recommend it, money drags you down). But more importantly this looks like an investment in a public comp…

You are being very optimistic. For example, as the article says:

> Kalanick added that Uber would continue to experiment “aggressively” with lowering prices, in an attempt to boost demand and increase the number of trips drivers can make each hour.

Valuing the company at 80 times the 2013 revenues (http://techcrunch.com/2013/12/04/leaked-uber-numbers-which-w...) is a little bit mad.

> I also agree the bubble hysteria is nonsense, whose money is at risk here? the .01% so don't sweat it.

Markets exist to allocate capital efficiently. Even if the capital belongs to people you don't like, you can still argue that misallocating it is bad.

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

#62

Post by bradleyjg »

theIV wrote: post #43
untog wrote: post #23

Earlier quoted context omitted.

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 s…

You can get a cab in Manhattan, and maybe Brooklyn, 90% of the time. But, if you head to the Bronx (where I live), it's considerably more difficult. I can't really speak for Queens or Staten Island. Up until the beginning of the year, 90% of the time you'll be hailing a gypsy cab. The only time you'd get a yellow when leaving the BX was at shift change which is around 5pm/5am for a lot of them. Not that there's anyth…

The thing is that uber is priced such that it is only attractive to people who live where it's not needed, i.e. Manhattan below 96th street, parts of western Brooklyn, and one or two hot spots elsewhere.

Even cabs (green and yellow use the same fare structure) are priced way out of line with what the gypsy cabs were negotiating in many parts of the outer boros. UberX is another 30+% again on top of that.

It looks to me like uber's biggest market in NYC is not people who live in outer boros and would otherwise have hailed a green or gypsy cab but people who would otherwise have taken a pre-arranged black car because hailing a cab is for the proles. That market isn't nothing, but it's far from the whole thing.

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

#63

Post by dcre »

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…

In addition to expanding the taxi market, Uber also has great potential to expand into other transportation and logistics markets. Who is going to direct the fleets of driverless trucks hitting the road in the 2020s?

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

#64

Post by Pxtl »

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…

The problem, though, is that much of Uber's success comes not from massive innovation, but just doing an end-run-around the regulatory capture of the taxi industry. In places where the taxi market is more competitive, Uber doesn't offer as much value or find as much success.

Uber has made some impressive achievements, but ultimately their big success was in figuring out how to run a taxi-like service without paying for taxi medallions.

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

#65

Post by caublestone »

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…

Before 2012 (when I started using Uber), I took a cab (outside of NYC) maybe 5 times in a year. Today, I take an uber 5 times a week. This is anecdotal but I am sure that's the market growth investors are looking at.

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

#67

Post by _delirium »

untog wrote: post #23
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 s…

The mistake, IMO, is assuming that they will be able to replicate that in other cities.

One reason is that a good part of their claimed novelty is being able to hail a cab via mobile-phone app (as well as get pricing and such), which is not actually novel in many markets. In much of Europe the existing taxi companies have that feature and it works just fine; it's not too hard to add it as an incremental improvement to the traditional radio taxi. I used the app from 'AAA Taxi' a bunch in Prague last week, and I don't see what Uber would offer above the existing functionality.

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

#68

Post by colmvp »

untog wrote: post #23
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 s…

Even finding a cab in NYC is a pain in the ass. If you're in Manhattan, cab drivers can deliberately discriminate against you if you want to travel to Brooklyn or Queens. The number of times I've had it happen to me makes me have zero sympathy about the idea of Lyft or Uber owning the NYC market. On top of that, Queens and Brooklyn are big, so it's improbable to flag a cab outside of very specific neighbourhoods.

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

#69

Post by monkeyprojects »

untog wrote: post #60
tomblomfield wrote: post #49

Earlier quoted context omitted.

Uber is 30-40% cheaper than London cabs. Uber has rattled the cab-drivers so much that they're staging a protest next week to try to pressure cab regulators into blocking Uber's expansion. http://www.theguardian.com/uk-news/2014/may/30/will-uber-kil...

Yes, Uber is cheaper - until it isn't, when it implements surge pricing. It's a very different model, which makes direct comparisons tricky. The price of a London cab is regulated. Maybe that price is wrong. Uber can take advantage of it, but do you think the London taxi industry is really going to sit back and watch its market disappear without even trying to change price? And the cab driver protests are more rooted…

While they may have spent a long time learning 'The Knowledge' that was in the days before Sat Nav.

Like many other things The Knowledge has been superseded by a computer.

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

#70

Post by fizx »

ChuckMcM wrote: post #45

This is an interesting valuation[1]. It shows that a workable replacement for an established service business (one suffering from large regulatory capture) is considered so significant from the perspective of these bankers. It also suggests that AirBnB could do really well if they went back to the well (not that I recommend it, money drags you down). But more importantly this looks like an investment in a public comp…

Preferred still has downside protection. What's that worth over common right now? 10%?
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