That's interesting. SoftBank invested a similar amount into their rivals Grab to head up against Uber.
https://techcrunch.com/2017/07/23/grab-raises-2b-from-didi-c...
Uber confirms SoftBank has agreed to invest
31–40 of 105 posts
Re: Uber confirms SoftBank has agreed to invest
#32Re: Uber confirms SoftBank has agreed to invest
#33If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone?
I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?
Re: Uber confirms SoftBank has agreed to invest
#34If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa.
Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem.
Anyone who has solved self driving, has near unlimited scale on the driver side. Their cars can autonomously be present to respond to peak demand - e.g having thousands of cars at Burning Man.
In the autonomous car world, Uber has no place if it doesn't have that tech. There is almost no reason for the company which has self driving tech to license it to Uber, when they are easily run it themselves. The only value Uber has right now is because it has crossed the critical mass on the two party network. And some people thought they could solve self driving cars.
OTOH, a global two party network (e.g Airbnb) is exponentially tougher than a city level two party network. Which is why Airbnb has almost no competition (except some local players in China), while Uber has competition everywhere. In fact, Uber has already lost and conceded a few major markets (China, Russia).
Can Uber - even sustain what they already have. I have my doubts and theories, but that's for another day.
Re: Uber confirms SoftBank has agreed to invest
#35Can anyone explain why $1B is being invested at a $70B valuation, while existing share holdings are being purchased at a lower/to be determined valuation?
Preferred shares can have a combination of
* liquidation preferences
* various wratchet provisions in case of a liquidity event yielding a lower ROI than anticipated
* pro rata rights
* dividend accrual
* board seats
Common shares have none of that.
Re: Uber confirms SoftBank has agreed to invest
#36If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…
Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber?
Additionally you need people maintaining them.
Re: Uber confirms SoftBank has agreed to invest
#37If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…
> e.g having thousands of cars at Burning Man.
Sounds like a great way to piss off the organizers of Burning Man and get a bunch of damaged vehicles. The desert itself is very damaging to car paint, nevermind how Uber operating there would be the antithesis of the purpose of Burning Man.
Re: Uber confirms SoftBank has agreed to invest
#38Earlier quoted context omitted.
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…
Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? Additionally you need people maintaining them.
My understanding is that in a reasonably stable state, an autonomous car would run on battery, charge itself and cost 40k. If a car has a life time of 5 years and electricity costs 4k/yr + 2k maintenance (lower for electric cars), we are looking at operational cost of 14k/yr per vehicle.
Right now an Uber driver who is probably online 60 hours a week, needs to support a car priced around 25k (amortized over 5 years), gas (which is more expensive than electricity), maintenance and 50k-70k/yr driver income. Assuming lower end we are looking at 5k car + 10k fuel + 5k maintenance + 50k driver income. So cost to support a driving car is 70k/yr for lower hours of operation.
So we are looking at a 5x cost and lesser hours of operation with human driving vs autonomous driving.
These are off the napkin numbers so please don't take them literally. It is meant to highlight that driver income is the biggest factor.
Whoever has self driving tech, they can start undercutting Uber with the most profitable markets (NYC, SF, Boston, LA etc) and expand from there.
I feel that we are at least 5-8 years away from main stream self driving. But I could be wrong.
Re: Uber confirms SoftBank has agreed to invest
#39Earlier quoted context omitted.
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…
Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? Additionally you need people maintaining them.
The credit line needed for such a venture would be quite large, I doubt Uber could get such a credit line any time soon.
Re: Uber confirms SoftBank has agreed to invest
#40Earlier quoted context omitted.
Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…
> e.g having thousands of cars at Burning Man. Sounds like a great way to piss off the organizers of Burning Man and get a bunch of damaged vehicles. The desert itself is very damaging to car paint, nevermind how Uber operating there would be the antithesis of the purpose of Burning Man.
That was just an example. Don't take it literally :)