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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

#121

Post by phil21 »

encoderer wrote: post #16
Instacartlove wrote: post #6

Earlier quoted context omitted.

"They've nailed the difficult math behind the logistics issues - basically a scaled version of the traveling salesman problem." This is so much bullshit it makes my eyes hurt. They "talk" about this a lot but it's not even related dude! Read some books.

It's not strictly "traveling salesman" but it is a real and challenging logistical problem. I've chatted w/ some Uber engineers about this and the story I was told is that originally they were using Google Maps estimates. But the data is really important to capacity planning and giving travel time estimates within their app. And it was often very wrong. They even had a number -- something like "if you multiply google…

Has anyone ever actually used the travel time estimates in their app?

I've taken hundreds of rides, and I don't think I've even once looked.

I find it to be a completely pointless part of the whole product - I already know roughly how far away something is, and how bad traffic may be. When I call an Uber, I simply look at the surrounding map and see where the cars are to get a decent estimate. The one they give is usually off by quite a bit, depending on who accepts the hail.

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

#122

Post by dmerrick »

skeper wrote: post #66

Serious question to those who have used uber: how safe is it? what makes it better than getting a ride off of craigslist?

It's pretty safe, although their insurance policies are smaller than that of licenses cabs (think $10k vs $100k). Drivers undergo background checks and are rated after every ride. Uber does not tolerate drivers who get less than 4 stars.

What makes it better than Craigslist is the convenience. Take out your smartphone, drop a pin on your location, and get a ride within minutes. Plus, you don't need to worry about payment, it all happens behind the scenes via your Uber account.

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

#123

Post by blazespin »

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…

Unless Uber plans on building self driving cars, why would you imagine that Google (or whoever) will hand that business over to them? Whoever owns the Self Driving Car tech will be the winner there.

Not some company with a website.

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

#124

Post by phil21 »

tootie wrote: post #78
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 on-demand-transportation market is enormous" Yeah, but it's such an easy problem to solve. I already had a few car services on speed dial so this wasn't really a big problem to begin with. All they did was centralize and market it. I live in NYC which is probably the #1 taxi market in the world and have rarely heard someone having trouble calling for a cab.

You live in NYC. That's just not indicative of the market as a whole though. I live in Minneapolis, where calling a cab is pretty much a worthless exercise. Uber has revolutionized the way I both commute to the airport (I can actually rely on it showing up within 30 minutes, a called cab may or may not show up at all) and how I can go out on the town at night. Previously my options were driving, or possibly a pre-arranged (as in 24 hours notice) black car.

I also spend a lot of time in Chicago, and there I do agree - the cab infrastructure works pretty well. I still use Uber, as it's far more convenient and reliable than calling a random cab company and waiting around for it to possibly show up (or waiting outside in the cold spending 30 seconds to 10 minutes flagging one down). Even in Chicago you get a 30% failure rate on radio dispatches.

It might be an easy problem to solve, but Uber is the first to realistically turn it into a useful service in many markets.

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

#125

Post by gphil »

adventured wrote: post #76

By comparison, the taxi & limo industry does $11 billion in sales across the entire US market. For Uber to ever justify just this funding round, they'll probably need to become roughly the size of 1/3 the entire taxi business in terms of sales (assuming $3.x billion in sales and $600x million in profit off that base, and assuming a reasonable 20 to 30 pe ratio over time). I'm guessing Uber is betting on selling custo…

Yeah, I was going to bring this up also. Obviously there are international markets as well, and the mere existence of Uber could in itself grow the size of this industry. However, if they are expected to become Google or Facebook-sized they're going to have to tap into some other verticals.

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

#126

Post by bane »

DanBC wrote: post #73
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...

The London black cab has a meter that prices the journey. Other taxis in London do not have a price meter. Uber needs to obey the regulatory rules of the industry. Either they don't have a pricing meter (and thus journey price is agreed before hand) or they do have a price meter and all Uber drivers are regulated like any other black cab driver. They can't ignore laws just because those laws are inconvenient to them.

Between Uber and AirBnB, and the large valuations they're getting despite being in flagrant violation of various local ordinances, it seems to be a gamble that they'll be able to lobby their way out of the problem, or expand into territories with no such legal framework.

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

#127

Post by encoderer »

phil21 wrote: post #121
encoderer wrote: post #16

Earlier quoted context omitted.

It's not strictly "traveling salesman" but it is a real and challenging logistical problem. I've chatted w/ some Uber engineers about this and the story I was told is that originally they were using Google Maps estimates. But the data is really important to capacity planning and giving travel time estimates within their app. And it was often very wrong. They even had a number -- something like "if you multiply google…

Has anyone ever actually used the travel time estimates in their app? I've taken hundreds of rides, and I don't think I've even once looked. I find it to be a completely pointless part of the whole product - I already know roughly how far away something is, and how bad traffic may be. When I call an Uber, I simply look at the surrounding map and see where the cars are to get a decent estimate. The one they give is us…

Yes, every time I open the app and it tells me how long it will take an Uber to arrive at my location.

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

#128

Post by quanpod »

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…

I live in Seattle and Uber is my preferred method of on-demand transportation, except for maybe rides to the airport where I might call a towncar service. It's cheaper than taking a Yellow Cab if you use UberX, and since I don't care about having a nicer ride, it works out great. No more waiting 30 minutes on Friday/Saturday nights and it's a huge improvement for after major events (even though surge pricing does sometimes lead me to select alternate means).

I'd really be interested to see how their revenue breaks down between larger cities with urban cores (SF, Seattle) and other areas that are more spread out (LA, etc.)

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

#129

Post by _delirium »

phil21 wrote: post #116
_delirium wrote: post #67

Earlier quoted context omitted.

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 t…

Not sure how that app works - but basically I don't have to deal with payment information (e.g. I don't need to carry cash), and I don't have to worry about tipping. Both important to me, and I'd at least assume a few others. I absolutely hate the stress of having to deal with some angry cabbie and 5 minutes of BS because I dare use a credit card vs. pay cash.

Never heard of tipping for cabs. I don't think that's common in Europe. Some of the apps do let you pay via the app, though that is probably a minority feature still.

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

#130

Post by phil21 »

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…

Also use Uber in Chicago (and now many other cities during travel, woo!) and I don't really have much else to add.

I can't stress how important the airport thing is. Radio dispatch by cab is the most unreliable horrible mechanism ever. It almost may as well not exist, because a cab might show up in 5 minutes, it might show up in 15, or it might show up never. Impossible to rely on. Due to Uber being reliable I've taken more car rides than usual to O'hare on days when I'm running late, or otherwise don't want to deal with the Blue Line or waiting outside for a cab.

Basically, cab companies did this to themselves by being horrible at customer service and not giving a shit. They are up there with Comcast in the "giving a fuck" department. Ever call to complain that your cab didn't show up? Ha!

And if you think this is great for a well-served city like Chicago, it's utterly game changing for under-served cities like Minneapolis. I now can actually take a ride to the airport instead of driving and spending $250 parking my car for a week. Why? Because I can depend on the Uber showing up when they say it's going to. Cabs, I'd have to give at least a 2 hour buffer in case the first 2 I call never show up.

Basically if this puts the cab companies out of business, it couldn't have happened to better people and I won't shed a single tear. Good riddance.

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