Uber seeking to buy self-driving cars: source • Hacker News Board

Re: Uber seeking to buy self-driving cars: source

#51

Post by hayksaakian » Fri, Mar 18, 2016, 5:31 PM UTC

adamt wrote: post #36

mmakunas wrote: post #6

Maybe I'm missing something but that number sounds hard to believe. An S-Class in the US is $100K. Even if a stripped down "utility" version was available at $50K that's $5B worth of cars. Yes, it's a "long term" order (i.e., not paid for and delivered at once), but that seems way beyond anything even Uber would do.

The deal is probably similar to the way an airline buys planes. E.g consider when Ryanair bought 200 737s for $22Bn [1] which is about the same in it's entire market cap. An order like this is probably: * For a delivery spread over 10+ years * The vehicles will almost certainly be leased/finance * Each vehicle will probably assume a 5+ year working life and have a residual of about perhaps 25% of list after 5 years g…

so they pay 800,000,000 per year for 5 years?

Re: Uber seeking to buy self-driving cars: source

#52

Post by encoderer » Fri, Mar 18, 2016, 5:32 PM UTC

The S-Class is an interesting choice. I'd wager that most people have never been in a car as nice as an S Class before -- no comparison really to the town car people associate today with Uber Black. The back seat has massage, heat and cool, individual entertainment options, power recline. Some of these things could be customized, but Mercedes isn't going to tarnish the reputation of their flagship sedan so Uber can have a more utilitarian taxi.

Re: Uber seeking to buy self-driving cars: source

#53

Post by bergie » Fri, Mar 18, 2016, 5:32 PM UTC

toomuchtodo wrote: post #21

spaceflunky wrote: post #18

At that kind of volume, would it make more sense to have MB develop a bespoke car for Uber? The S-Class is a great car, but I'm sure there are Uber-specific improvements that can be made. Why would you order some many of something 'off-the-shelf'?

I don't think you'd find any manufacturer who would tool up for a bespoke car. Uber either needs to buy an existing manufacturer with existing large scale capacity, or build out their own capacity. And we've seen with Tesla how much and long that capacity takes to build out for only 100K vehicles/year. Uber is capital chasing a potential treasure chest. Google, Tesla, GM/Lyft/Cruise are the real players it appears.

There are contract manufacturers also in the automobile industry. For example the Finnish Valmet Automotive has been building Porches, and is now doing some MB cars.

http://www.valmet-automotive.com/automotive/cms.nsf/pages/in...

Re: Uber seeking to buy self-driving cars: source

#54

Post by tdaltonc » Fri, Mar 18, 2016, 5:33 PM UTC

jdietrich wrote: post #24

mlrtime wrote: post #3

Mercedes/Audi/BMW taxis are common in Germany. This doesn't mean you'll be able to order your S class in NYC/SF any time soon.

My thoughts exactly. Uber are struggling to get a foothold in Europe because of regulation. I suspect the plan is to become a traditional taxi or limousine operator in these hostile markets, leasing cars to licensed taxi drivers. Using S class rather than the more common C class cars would fit with their existing Uber Black service.

Have they piloted this idea? Because 100,000 cars is big bet if they haven't established service-market fit.

Re: Uber seeking to buy self-driving cars: source

#55

Post by qaq » Fri, Mar 18, 2016, 5:33 PM UTC

That's huge order 100K is what they sell in a year. So if spread over 10 years this would mean they are buying 10% of S-class cars produced each year.

Re: Uber seeking to buy self-driving cars: source

#56

Post by jgrahamc » Fri, Mar 18, 2016, 5:33 PM UTC

encoderer wrote: post #52

The S-Class is an interesting choice. I'd wager that most people have never been in a car as nice as an S Class before -- no comparison really to the town car people associate today with Uber Black. The back seat has massage, heat and cool, individual entertainment options, power recline. Some of these things could be customized, but Mercedes isn't going to tarnish the reputation of their flagship sedan so Uber can h…

The S-Class is a very common model for a taxi in Germany.

Re: Uber seeking to buy self-driving cars: source

#57

Post by pikachu_is_cool » Fri, Mar 18, 2016, 5:33 PM UTC

adamt wrote: post #36

mmakunas wrote: post #6

Maybe I'm missing something but that number sounds hard to believe. An S-Class in the US is $100K. Even if a stripped down "utility" version was available at $50K that's $5B worth of cars. Yes, it's a "long term" order (i.e., not paid for and delivered at once), but that seems way beyond anything even Uber would do.

The deal is probably similar to the way an airline buys planes. E.g consider when Ryanair bought 200 737s for $22Bn [1] which is about the same in it's entire market cap. An order like this is probably: * For a delivery spread over 10+ years * The vehicles will almost certainly be leased/finance * Each vehicle will probably assume a 5+ year working life and have a residual of about perhaps 25% of list after 5 years g…

$40,000/car * 100,000 cars = $4B. that's only a 20% discount over the course of 5 years.

Re: Uber seeking to buy self-driving cars: source

#58

Post by encoderer » Fri, Mar 18, 2016, 5:34 PM UTC

jgrahamc wrote: post #56

encoderer wrote: post #52

The S-Class is an interesting choice. I'd wager that most people have never been in a car as nice as an S Class before -- no comparison really to the town car people associate today with Uber Black. The back seat has massage, heat and cool, individual entertainment options, power recline. Some of these things could be customized, but Mercedes isn't going to tarnish the reputation of their flagship sedan so Uber can h…

The S-Class is a very common model for a taxi in Germany.

In my experience, the E class is far, far more common.

Re: Uber seeking to buy self-driving cars: source

#59

Post by ams6110 » Fri, Mar 18, 2016, 5:35 PM UTC

At that quantity, an S class is the badge on the trunk, otherwise whatever Uber wants it to be. Likely the technology for automation, but maybe not all the luxury bells and whistles.

Re: Uber seeking to buy self-driving cars: source

#60

Post by logicallee » Fri, Mar 18, 2016, 5:35 PM UTC

lmm wrote: post #20

mmakunas wrote: post #6

Maybe I'm missing something but that number sounds hard to believe. An S-Class in the US is $100K. Even if a stripped down "utility" version was available at $50K that's $5B worth of cars. Yes, it's a "long term" order (i.e., not paid for and delivered at once), but that seems way beyond anything even Uber would do.

That's what, 1/9th of Uber's current valuation? And it's the heart of their business.

"it's the heart of their business" but the fact that it's a fundamentally alternative business model from anything they've taken a cent of revenue on is important to note.

It's like if airbnb bought $5B of Manhattan real estate. Yes, it's "the heart of their business" but also - wow.