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SoftBank Succeeds in Tender Offer for Large Stake in Uber

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Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#31

Post by shubhamjain »

msoad wrote: post #5

A few observations: Softbank has stakes in Didi, Didi has stakes in Uber, Uber has stakes in Didi, with this Softbank got stakes in Uber. Uber is mostly successful in North America and Southern Americas. Didi is obviously successful in China and will expand to Southern Americas soon. Europe is not an important market for these companies. Too much regulations and good public transportation won't allow them to thrive.…

This makes sense. I don't think Uber would survive without scaling down its ambitions. Sooner or later, they have to exit unprofitable cities and leave those markets for smaller players. Uber isn't in the same league of business as Google is. It can't scale without bringing range of issues while profitability still remaining out of sight.

If that holds true, Softbank has managed to have a stake in every major app-based-taxi company of the future.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#32

Post by pedrosorio »

wpietri wrote: post #29
discordianfish wrote: post #13

Earlier quoted context omitted.

Maybe I’m alone but my initial reaction was: “oh 30% doesn’t sound that bad”.

It's really bad for anybody who has options. The last time Uber's valuation was this low was 2 1/2 years ago. I don't know how Uber did employee equity, but if it was options with a valuation based on the numbers we're seeing in public, then somebody who joined 2 years ago would just have had their equity stake drop to $0. And in some sense it's negative, in that even if the valuation goes up modestly, their stake is…

Uber has been making offers in RSUs for more than 2 years: https://www.reddit.com/r/cscareerquestions/comments/3u5asj/u...

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#33

Post by wpietri »

valuearb wrote: post #20
QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

Uber should easily be profitable without driverless cars. Uber's cost to book rides is pennies, its share of ride revenues is dollars. It's likely profitable or close in north america now. The naked capitalism analysis was childishly biased, completely done without access to the necessary detail of their financials. Uber under Kalanick poured massive amounts of money into accelerating international market expansion a…

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 in a strange city. The driver, who drove for multiple providers, encouraged her to use Lyft instead. And Lyft is hardly the only competitor; starting a pseudo-taxi provider is just not hard. So I think Uber won't be profitable for long even in the driverful car market. And when driverless cars come along, the amount of possible well-funded competitors (BMW, GM, Ford, Virgin, Enterprise, Google, etc, etc) means it's unlikely to get better.

[1] https://www.recode.net/2017/8/31/16227670/uber-lyft-market-s...

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#34

Post by rpmcmurphy »

If you want a forecast of how ridesharing companies will settle out, tear the route map out of an inflight magazine. There is no global airline, but many regional airlines that provide international connectivity to other regional airlines.

It makes sense that each major region will have 2 or 3 dominant operators including local taxis. In the long term, a local operator will have advantages due to better local knowledge, government relations, etc.

Roaming agreements will take the equivalent of Star Alliance, and primarily of value for international travelers. Most users will interact with their preferred local operator. Note this has been tried already, but failed due to parties not trusting each other, but will probably be tried again once territories are more nailed down.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#36

Post by hinkley »

In Japan, company struggles are first blamed on the management chain. Not the employees, not bad luck. The people in charge. If new management can’t sort things out then it must be they workers.

This also appear to apply to subsidiaries in other countries. Given the way Uber has been going, next year is going to get interesting. Given Uber’s struggles, if SoftBank follows the playbook, they won’t touch anything for a full fiscal year. If things don’t improve, expect to see multiple executive heads roll in the second fiscal year, all on the same day. In the third if profits haven’t improved, expect a layoff of regular employees to make the numbers work.

After that, depending on how aggressive they have to get, there could be a whole other set of reasons not to want to work at Uber...

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#37

Post by kurthr »

gst wrote: post #17
alextheparrot wrote: post #10

Earlier quoted context omitted.

This seems kinda odd, because one of the main plus points for me is that Uber worked somewhat internationally. I use Lyft only, but that was a key differentiator for me actually. As a more interesting question, is there any difference between saying SoftBank is competing with Uber and that SoftBank has hedged against an Uber investment? I feel like the latter may be more the framing of these investments.

Same here. In the States I mostly use Lyft, but internationally it's easier to just use the Uber app instead of first figuring out which other options are available. In many cases installing the local apps doesn't even work because they are limited to their own local app stores. One of the next steps for those companies is probably to get roaming agreements with each other: When I'm in a country where, e.g., Uber doe…

The problem with Uber/Didi in China is that the driver will Always call to discuss your pickup location in Mandarin, which can be difficult enough face-face.

The further complication is that Didi only accepts patent through a China bank account. As a result, you usually need a local friend to book your ride, even if you pay cash.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#38

Post by icecreameasier »

joncrane wrote: post #27
QAPereo wrote: post #2

Does anyone really think that Uber has enough runway, or could ever get enough, to last until the necessary level of automation is developed? SoftBank though, between this and their incredibly favorable, conditional loan to Theranos really has an eye for distressed assets! If someone does have a vision for a successful Uber, I’d love to hear it, not to try and pick it apart, just to understand what’s happening.

Do you see Lyft exceeding Uber's success?

Impossible, Overall Uber's network effect is strong, also Uber has a lot of strategic move like Eats, Freight and ATG. I feel Eats and Freight will be huge in near term and ATG is invaluable in long term.

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#39

Post by valuearb »

wpietri wrote: post #33
valuearb wrote: post #20

Earlier quoted context omitted.

Uber should easily be profitable without driverless cars. Uber's cost to book rides is pennies, its share of ride revenues is dollars. It's likely profitable or close in north america now. The naked capitalism analysis was childishly biased, completely done without access to the necessary detail of their financials. Uber under Kalanick poured massive amounts of money into accelerating international market expansion a…

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…

Yea, I'm not justifying the valuation at all, just the business model

Re: SoftBank Succeeds in Tender Offer for Large Stake in Uber

#40

Post by rtx »

msoad wrote: post #14
seanmcdirmid wrote: post #8

Earlier quoted context omitted.

But Uber isn’t limited to the USA and Canada. At least, not like how Didi is limited to china: https://www.uber.com/country-list/ https://en.m.wikipedia.org/wiki/Uber_(company)#Legal_status_...

Yes, but scale of countries like Bahrain doesn't make a dent. Also, in each of those countries Uber has a competition that is usually more successful than Uber. That's not true in Brazil and Mexico and that's why Didi is rushing there!

Uber has around 50% market share in India. That alone is the third biggest market in the future.
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