Earlier quoted context omitted.
Even if they pull all of that off, which I'm suspicious of, I don't see what justifies the valuation. The only way it made sense to me is if Uber achieved the same sort of dominance that Google has in search or Facebook in social networking. But Uber's market share is declining [1], and I just don't see a moat that allows them to be able to extract monopoly/monopsony rents. Just the other day a friend caught an Uber…
Think about it. Ridesharing currently only accounts for approximately 0.1% of all miles driven? And you don't see the upside for this market?
I see some upside, although probably less than you. Even if the market ends up being large, though, that only matters if a) they have a large share of it, and b) competition doesn't drive margins to approximately zero.
Facebook and Google are worth a zillion dollars because there is little competitive pressure. GM's market cap is less than 1/10th of Google's because they face stiff competition. Or compare with airlines. The top 3 airlines by revenue bring in circa $120bn per year versus Google's $90bn. But the market cap of those airlines is only $70bn combined versus $729bn for Google.
I think airlines are good comparison for the pseudo-taxi market. Barrier to entry isn't huge, and lots of well funded people like to play in the space. That means that consumer price competition is cutthroat; profit margins and market caps thus stay low.
But Uber's in a worse position than an airline. A 777 or an A380 costs upwards of $300 million, and you need more than one of them to be a plausible airline. For pseudo-taxis, though, you just need some software (likely available via white label), a few drivers in one city, and a bit of local marketing muscle. It costs 3-4 orders of magnitude less to start a 1-city Uber competitor than a regional airline.
And there are an awful lot of people who want a slice of the future transportation pie, including every single car manufacturer (who can have custom cars at cost), every car rental company (which combined have 2m cars and 20k locations, a number of major tech companies (certainly Google, possibly Apple and Amazon, surely others), and possibly anybody with a strong brand (e.g., perhaps Virgin, GE, Ikea, LVMH).
So no, I don't think Uber's valuation was justified. Neither does Softbank, obviously, or anybody else with the money to buy in. But I think it will go lower still.