Uber Bonds Term Sheet Reveals $470M in Operating Losses

You are overestimating the competitiveness of these markets. In many(perhaps most) parts of India, these operate as unions/ price cartels. The tuk-tuks in particularly ignore meter pricing, in most parts of India, and may resort to violence/harassment to protect themselves from competition. Also most taxis/tuk tuks are independent and do not belong to any company. As such, I imagine they don't enjoy the benefits of economies of scale, efficiencies, and technology that Uber can afford. The quality of service is very poor, which makes Uber something of a Godsend. All these are points on which Uber can and is currently exploiting to gain a foothold, although they face strong challenges.

Let's assume their strategy works and they win an effective monopoly. What's stopping a "new Uber" coming along, funded by a couple of billion in VC money, to attack Uber's monopoly position by offering the same service cheaper. If winning a market can be done by subsidising your offering with VC cash then someone else will come along and do it as soon as Uber push for higher prices.

While there's huge amounts of private equity money available Uber will never be able to raise prices, especially considering there are plenty of investors around who are unhappy about missing Uber's first few rounds.

We're losing a dollar on every unit, but we'll make it up in volume!

There was a comment thread earlier today about whether Uber is solving rich-people problems or common-people problems. I wonder the extent to which Uber's pricing is sustainable -- are they subsidizing uberX and uberPOOL pricing out of money they're raising, or are the debts just in the pursuit of growth to new cities? Or put another way, if they ceased all growth, froze prices, and laid off all engineering and marketing staff except for one person to keep up with mobile OS updates (but kept the staff to recruit drivers, deal with legal issues, etc.), would the company be profitable, or would it go bankrupt?

I certainly don't complain when I get subsidized lunches delivered to me on VC money, but when existing Uber cities are debating regularizing Uber's legal status or just fixing the inefficiencies / problems with the taxi industry that Uber capitalized on, I want to know if Uber's going to be around for the people of that city, at the same effective prices, in 20 years.

Having worked for financial traders I won't call them the very worst company in the world. But if my choices were working for them or quitting the industry, I wouldn't blink.

For me it's more the accumulation of awfulness. They started out as a scheme to time-share limos among young entitled dudebros. They entered the market with the black cars, exploiting a status-good dynamic. They've shifted all of the capital cost and risk of the taxi business to drivers, surely screwing many of them in the process. Their "we're too important to comply with mere laws" routine strikes me as arrogant horseshit. They've had assorted scandals, including inviting a bunch of journalists to an off-the-record dinner and then "joking" about plans to spend lots of money to destroy the career of a prominent journalist they didn't like. I've lost count of how many places have arrested or issued arrest warrants for their people.

Throughout all of this, they sing a song of "entrepreneurship" and "worker independence" while providing low-quality, low-stability jobs and making long-term plans to put every one of their drivers out of work. They couldn't give a shit about their workers, and are even willing to threaten their jobs (which aren't jobs, of course, but independent contractor positions) if they are politically active.

On top of all of that, I believe they're a great example of the shift back to a new gilded age, where the main function of the poor is to directly serve the wealthy. But instead of a Victorian model where employees are part of the household, in the Uber model we'll get paid only during the instants we are directly useful to somebody with money.

That's just some highlights off the top of my head; the list goes on. They may not be the very worst, but they have an awful lot of people rooting for their fall. I expect they won't go totally bust. But I am looking forward to a Groupon-style outcome once their investor-fueled growth becomes untenable.