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Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

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Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#61

Post by pbreit »

toomuchtodo wrote: post #8
austenallred wrote: post #4

Wow. $40 Billion valuation, hiring 1 million people in the coming year, opening new sites at the rate of almost 1/day. Neither Travis Kalanick or any current senior execs sold any stock in the current round. Uber will either be the biggest boom or bust story there's been in quite some time. This will be fun to watch.

Have any of the released Uber decks show when profitability is expected and what their run rate is? Curious how long VC money can fund cheap rides for.

It could easily be profitable tomorrow if it scaled back growth. Gross revenue run rate is around $10b and net revenue $2b. And growing very rapidly. Riders pay for their rides so I have no idea what your VC reference means.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#63

Post by pbreit »

icebraining wrote: post #40
jcampbell1 wrote: post #21

Earlier quoted context omitted.

This business is a natural monopoly, which is exactly what the VCs understand. There won't be competition, because whoever has the most customers can offer the best prices to customers, and the most earnings to drivers. The winner can suffocate the competition. It's basic game theory, if I run an operation that does 10,000 rides a day, and my competitor does 5000 rides per day, I can tweak prices and wait times such…

By that logic, all businesses with economies of scale are "natural monopolies". That's nonsense, because it assumes that everything else (particularly income per ride and cost per ride) are the same, or at least that they can be the same at a whim. And in practice, we see smaller companies competing successfully with larger ones all the time.

There's a huge liquidity advantage, relatively unique to this market, that is difficult to compete against.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#64

Post by pbreit »

look_lookatme wrote: post #37
dr_ wrote: post #12

Earlier quoted context omitted.

The rides are not really cheap. At best, in nyc, uber x is advertised to be cheaper than a taxi but that is really not always the case.

UberX pricing feels comparable, on average, to Yellow/Green Cabs for me, in Brooklyn. Sometimes it might be more expensive, sometimes less, but it mostly around the same. I take Uber probably 5-8 times a week.

UberX is almost always less expensive than a taxi. Certain NYC trips might be an exception.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#65

Post by pbreit »

ryanhuff wrote: post #16
applecore wrote: post #2

It's a popular meme in tech journalism that Uber is "under attack" for its nefarious business practices, but how much has this sense pervaded outside the tech bubble?

Its bubbled up to the New York Times. Otherwise, if fails my "mom test", so its still a niche service IMO.

A trillion dollar niche!

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#66

Post by pbreit »

sz4kerto wrote: post #49
venomsnake wrote: post #13

That's almost 3 whatsapps. Congratulations to the team. Although lately I feel like Dr. Evil and his 1 million ransom when I see that kind of valuations thrown around.

Well, not exactly. Whatsapp has been sold for $19B, this is a _valuation_ of $40B. I think selling something for $19B is bigger than being valued at $40B and getting $1.2B in funding. Huge numbers though, I can't realistically appreciate these amounts.

With $2b in revenues vs ~$0, I'd put the Uber valuation in the bigger category.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#67

Post by Rainymood »

Scaling done right. It's kind of awesome seeing such a company blow up like this.

I think that a lot more competitors in the near future will enter the market (as Uber pretty much validated the market for them) but Uber will remain the biggest and baddest. Uber will probably become very big, then diversify in some way (just like Google did) and then Uber will be established. Maybe 'Ubering' will even become a word just like 'googling'... heh, funny. But hey, it's all speculation from this point imo.

Time will tell.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#68

Post by untog »

icebraining wrote: post #56
untog wrote: post #47

Earlier quoted context omitted.

As I said in the original post, by using VC cash to undercut competition and drive them out of business.

And others can't get VC cash, why?

VC cash isn't infinite, and the amount available today won't last indefinitely. And are many VCs really likely to invest in a new startup when Uber just got over a billion dollars of cash? You can be as innovative and disruptive as you want, you're still going to have an extremely hard time beating a company with $1.2bn in the bank.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#69

Post by mcintyre1994 »

pbreit wrote: post #53
DigitalSea wrote: post #26

Umbrellas at the ready, the mess is going to be big when this bubble eventually bursts. Sure, I see the value of services like Uber, but there are so many ridesharing services in the market offering a decent product, Lyft arguably has a better app. While I don't doubt its usefulness, I don't think Uber is worth $40b. Especially considering it was only valued at roughly $17b in the summer which was what, like 6 months…

Disagree with almost everything you've written. It's a winner-take-most/all, trillion plus dollar market. Investors getting in at $40b, besides having little downside due to preferences, will almost certainly make a reasonable return. Uber is already on track for $1b in revenue and continues to grow very rapidly. Governments have in fact shown no ability to stop Uber (only a very few instances in the entire world). P…

I can't think of anything that would stop governments destroying Uber - is there anything? They've already started getting banned in various places, and it's not hard to write laws to enforce a taxi monopoly.

They're doing well but I don't see anything that would stop government regulating them out of existence. They're no, say, Bitcoin in that regard for sure.

Re: Uber Confirms New $1.2B Funding Round, Looks to Asia for Expansion

#70

Post by big_astrocyte »

This figure might be wrong but the entire US taxi industry makes a revenue of $11 billion per year. Since US forms about 20% of the world's economy, we can assume the global taxi revenue to be $50 billion. Even if Uber takes in 20% from every ride, I can't imagine them possibly having more than $10 billion in revenue. Assuming Uber forms a 60% monopoly, they won't be making more than $6 billion in revenue. Kindly correct me if I'm completely off here.

One way for Uber to overcome this is to bet on the growth of the taxi industry in Asia. But, even in Asia, governments are pouring in massive investments into public infrastructure. When I visit New Delhi, I rarely end up in a cab because the public infrastructure isn't all that bad. Public transportation projects are coming up in even the smallest of Asian cities. If things go well, people won't need an Uber for most occasions because you'll have to wait 5 minutes for a bus/tube/{new disrupter}!

This is what might happen. Uber is going to have a massive IPO with a highly overvalued P/E (this is what the VCs are betting on). Then, after a few years, the market will realize that this world is finite, unlike their greed (have twitter's investors started realizing that?). What happens next is that everyone looses.

Uber deserves credit, just not this much!! There are other big problems the world must focus on. The short nearsightedness of humans is the biggest obstacle to our own growth.

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