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Neither, and New: Lessons from Uber and Vision Fund

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Re: Neither, and New: Lessons from Uber and Vision Fund

#41

Post by rossdavidh »

luckydata wrote: post #2

The whole beginning of the article is based on the assumption that Uber's story is played out. I don't think we can call that one yet, IMHO the market hasn't discovered what is Uber WORTH just yet.

I was thinking something similar, and it occurred to me, "what if the actual long-term value of Uber is less than $0?" If it's true that Softbank is still underwater on their Uber investment, then they have a big problem. If Uber (or a company like it) were trying to IPO in a post-WeWork environment, they would do considerably worse than they did, I think.

Re: Neither, and New: Lessons from Uber and Vision Fund

#42

Post by tempsy »

rossdavidh wrote: post #39
novok wrote: post #31

Earlier quoted context omitted.

But people don't use it more than a special gift card and loyalty program although, and it seem that starbucks does not have ambitions to be a general wallet. I'm guessing why starbucks promoted it heavily is to reduce card fees eating into their margins and all the other typical loyalty and gift card reasons. I'm not seeing rumblings anything close to something like grab pay coming from starbucks for example.

Exactly. The typical purchase size at Starbucks is small enough that the CC fees (which are something like 3%, but also have a minimum per-transaction cost which is something like $0.25) are problematic. If all that Starbucks gets out of it is that those people who use their wallet are paying about $0.20 more to Starbucks (and not the CC company) per purchase, that already is a win for them. Plus, many Starbucks cust…

In urban cities like SF people use Uber just as frequently. It isn't a once a week or once a month purchase. Point is Uber shares a lot of the same purchasing behavior as a Starbucks customer (low dollar, high frequency) and would stand to benefit from a similar wallet app. I believe Uber is also working with some cities to be the app to buy public transit tickets from, so there is some path forward to using an Uber wallet to buy other things.

And again, as I pointed out in my original comment, Starbucks is not just saving per coffee transaction fees - they are monetizing $1.6 billion worth of balances.

They even consider "old" balances that haven't been touched in a long time an asset vs liability (e.g. forgotten gift cards become free money).

Re: Neither, and New: Lessons from Uber and Vision Fund

#43

Post by harryh »

tempsy wrote: post #18

I think Uber missed the opportunity to be a more full fledged wallet (which is what Grab started a few years ago). They have a "cash" product now where you can load money, but it's too little too late IMO, and the incentive to load money vs use your cc is small (e.g. tiny discount). Starbucks is the obvious model here...IIRC they have one of the most success mobile payment apps in the country, even competing with App…

Starbucks' annual revenue is about 25 billion. Let's say they are making a (very generous!) 5% on that balance. That's 80 million dollars or about 0.3% of their annual revenue.

Starbucks doesn't run its payment app so they can make money on the float.

Re: Neither, and New: Lessons from Uber and Vision Fund

#44

Post by jccooper »

sp332 wrote: post #34
thrav wrote: post #22

Earlier quoted context omitted.

Have to transition taxis from meter to set-pricing first. The uncertainty of getting into a cab and agreeing to pay an unknown price is a big part of why I avoid them. I’ve been hit with a ridiculous price at the end of a ride enough to distrust the whole concept of giving them a blank check.

Some cities are better at this. https://www.chicago.gov/city/en/depts/bacp/supp_info/2012_pa...

That's a pretty standard taxi price structure. Open, but not clear. I have no idea based on that how much a trip will cost, even if somehow I managed to keep that whole table memorized.

Re: Neither, and New: Lessons from Uber and Vision Fund

#45

Post by etaioinshrdlu »

amelius wrote: post #14

What happens if people start ordering taxis from within Google Maps? And what if Google Maps adds more taxi services? What if Android starts integrating the function of ordering taxis that way? What would happen to Uber's value then? You can't "own" a market unless you also entirely own the way people access that market.

That actually happened. I booked Ubers and lyft from inside Maps a couple years ago.

Seems like that feature is just gone now...

Re: Neither, and New: Lessons from Uber and Vision Fund

#46

Post by JetSpiegel »

zwieback wrote: post #15

When I was in Singapore I used the "grab" app, which is super popular and has both regular taxis and uber-like drivers (and food and other stuff). What's different about Singapore and grab? Seems like a good model to me but it must involve heavy regulation to work.

Isn't Grab government-owned?

Re: Neither, and New: Lessons from Uber and Vision Fund

#47

Post by tempsy »

harryh wrote: post #43
tempsy wrote: post #18

I think Uber missed the opportunity to be a more full fledged wallet (which is what Grab started a few years ago). They have a "cash" product now where you can load money, but it's too little too late IMO, and the incentive to load money vs use your cc is small (e.g. tiny discount). Starbucks is the obvious model here...IIRC they have one of the most success mobile payment apps in the country, even competing with App…

Starbucks' annual revenue is about 25 billion. Let's say they are making a (very generous!) 5% on that balance. That's 80 million dollars or about 0.3% of their annual revenue. Starbucks doesn't run its payment app so they can make money on the float.

Uh why would you consider it revenue? It’s more like risk free profit. Meaning they keep some tiny amount of every cup of coffee sold, but 100% of interest earned.

And it’s important enough that they call it out in their earnings report. And the more interesting use case is that it’s a billion dollar 0% loan, not necessarily that they make interest off it sitting in a bank.

Re: Neither, and New: Lessons from Uber and Vision Fund

#48

Post by harryh »

tempsy wrote: post #47
harryh wrote: post #43

Earlier quoted context omitted.

Starbucks' annual revenue is about 25 billion. Let's say they are making a (very generous!) 5% on that balance. That's 80 million dollars or about 0.3% of their annual revenue. Starbucks doesn't run its payment app so they can make money on the float.

Uh why would you consider it revenue? It’s more like risk free profit. Meaning they keep some tiny amount of every cup of coffee sold, but 100% of interest earned. And it’s important enough that they call it out in their earnings report. And the more interesting use case is that it’s a billion dollar 0% loan, not necessarily that they make interest off it sitting in a bank.

And the more interesting use case is that it’s a billion dollar 0% loan

Maybe this would have been exciting a decade or two ago before interest rates dropped so far. Now Startbucks can issue all the debt it wants for...checks notes...about 2.3%.

Re: Neither, and New: Lessons from Uber and Vision Fund

#49

Post by muddi900 »

amelius wrote: post #14

What happens if people start ordering taxis from within Google Maps? And what if Google Maps adds more taxi services? What if Android starts integrating the function of ordering taxis that way? What would happen to Uber's value then? You can't "own" a market unless you also entirely own the way people access that market.

I have booked Ubers through Google Maps.

Re: Neither, and New: Lessons from Uber and Vision Fund

#50

Post by dragonwriter »

etaioinshrdlu wrote: post #45
amelius wrote: post #14

What happens if people start ordering taxis from within Google Maps? And what if Google Maps adds more taxi services? What if Android starts integrating the function of ordering taxis that way? What would happen to Uber's value then? You can't "own" a market unless you also entirely own the way people access that market.

That actually happened. I booked Ubers and lyft from inside Maps a couple years ago. Seems like that feature is just gone now...

If you search for directions, and select the mode of transport icon that looks like someone hailing a taxi, Uber and Lyft options are still displayed; the option hasn't been removed.
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