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Uber Turns to Saudi Arabia for $3.5B Cash Infusion

nytimes.com

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Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#61

Post by SilasX »

CPLX wrote: post #49
SilasX wrote: post #44

Earlier quoted context omitted.

I haven't worked out the specific numbers, but $60 billion is reasonable if you expect Uber to become a global near-monopoly on hired ride services and related logistical services they're branching out into. Whether that scenario is reasonable, is itself an open question, of course.

It seems divorced from reality to me, though I claim no real special expertise. They seem to have no more ability to be a monopoly than any other logistics or transportation powerhouse. The market cap of UPS is ~$90bn, and FedEx ~$40bn. And those companies have a lot of real actual assets* and (arguably) much stronger network effects than a local taxi replacement company. It's not that it's so implausible it couldn't…

Wow, you're right, hadn't thought of that. When you account for the (large) risk of Uber not reaching that stage, that should put them at $20 billion optimistically.

In fairness, though, neither FedEx nor UPS count as a near-monopoly either, but the probability of a real one is correspondingly less probable anyway.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#63

Post by aetherson »

petra wrote: post #41
rexreed wrote: post #30

Earlier quoted context omitted.

In what way is the ride-share market any sort of monopoly when there's little barrier to entry. In fact, I see new entrants in this market all the time. Hardly any chance to be a real monopoly unless they can somehow carve their way to exclusivity in a market, which is never going to happen.

The ride-sharing market stops being a free-for-all once many people start to share a car and it's critical to find the most optimal route for them. Than having large masses of users become critical. The only thing i find curious - why is UBER/LYFT so slow in attacking the true sharing market ?

Because people don't actually want to share a cab with a stranger, and wait while that stranger is dropped off.

At least, that's my bet.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#64

Post by linkregister »

rock57 wrote: post #53

according e.g. to the stories linked below and many previous reports, Uber actively aims to reduce the number of cars on the road, and its efforts, especially Uber Pool will reduce the oil consumption and, as a result, oil prices... And now they get the largest investment yet from a party that is NOT interested in falling oil prices... What am I missing here? https://newsroom.uber.com/us-new-york/taking-1-million-car…

It seems smart for a sovereign wealth fund to try to diversify its holdings. Exxon and Chevron also invest in renewables, despite the fact that renewables potentially cannibalize oil sales.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#65

Post by kirykl »

tomcam wrote: post #42
rexreed wrote: post #30

Earlier quoted context omitted.

In what way is the ride-share market any sort of monopoly when there's little barrier to entry. In fact, I see new entrants in this market all the time. Hardly any chance to be a real monopoly unless they can somehow carve their way to exclusivity in a market, which is never going to happen.

Their long-term play is driverless cards--buy or lease fleet cars, then charge people a subscription to commute or use the cars a certain amount per month. The current business is building brand awareness and inertia.

I've seen this idea but can't understand it. By owning or leasing a fleet of driverless cars Uber only increases its operating costs

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#67

Post by seizethecheese »

gorkemyurt wrote: post #40
seizethecheese wrote: post #17

Earlier quoted context omitted.

Get out of your moral valley, get a better vantage on the moral topology around you. The USA executes people, true, but generally not political opponents. Saudi is an order of magnitude worse than the US government.

guess who is Saudi's biggest trade partner? https://en.wikipedia.org/wiki/Economy_of_Saudi_Arabia#List_o... or who actually sells them guns? https://en.wikipedia.org/wiki/Saudi_Arabian_Army

Your point that the US is complicit and that our hands are not clean is well taken. There is a moral topology, this isn't black and white.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#68

Post by koolba »

_audakel wrote: post #58
jessedhillon wrote: post #39

Earlier quoted context omitted.

> A solid business model doesn't require this sort of continuous cash infusion. Where is this assumption that this cash is required coming from? A very common use for investment is to accelerate plans which would otherwise unfold over long/impractical timelines. Another common use is to get ahead of competitors. I know much of HN is very eager to see all billion dollar valuations deflate so as to prove that extremely…

> much of HN is very eager to see all billion dollar valuations deflate where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :)

> where do you get this from? HN is news for the people building startups and I would imagine they like high valuations :)

Nah most of us are getting the popcorn ready.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#69

Post by gist »

CPLX wrote: post #49
SilasX wrote: post #44

Earlier quoted context omitted.

I haven't worked out the specific numbers, but $60 billion is reasonable if you expect Uber to become a global near-monopoly on hired ride services and related logistical services they're branching out into. Whether that scenario is reasonable, is itself an open question, of course.

It seems divorced from reality to me, though I claim no real special expertise. They seem to have no more ability to be a monopoly than any other logistics or transportation powerhouse. The market cap of UPS is ~$90bn, and FedEx ~$40bn. And those companies have a lot of real actual assets* and (arguably) much stronger network effects than a local taxi replacement company. It's not that it's so implausible it couldn't…

One thing I'd like to know (and I am sure someone has answered this somewhere) is the amount of people using Uber in their own town vs. people who travel and use Uber.

If in their own town, it seems entirely possible for a local strong competitor to offer a better product or service. For travelers that is less of a risk since you go with the brand you know (which traditionally has been a taxi cab).

In particular some markets are so large that it would be a juicy target to attack just the one geographic area regardless of whether you planned to compete elsewhere (NYC for example).

Now of course someone could argue that this could have happened to opentable and it hasn't. But that is a much harder thing to knock off with the tie in to reservation systems.

Re: Uber Turns to Saudi Arabia for $3.5B Cash Infusion

#70

Post by hnhire_me »

rock57 wrote: post #53

according e.g. to the stories linked below and many previous reports, Uber actively aims to reduce the number of cars on the road, and its efforts, especially Uber Pool will reduce the oil consumption and, as a result, oil prices... And now they get the largest investment yet from a party that is NOT interested in falling oil prices... What am I missing here? https://newsroom.uber.com/us-new-york/taking-1-million-car…

> And now they get the largest investment yet from a party that is NOT interested in falling oil prices...

Uber's impact will be the same whether they invest or not.

Saudia Arabia needs to diversify its holdings and sovereign funding sources as oil is a very narrow and volatile vertical upon which they currently hang their hat (and almost all of their funding).

Saudia Arabia is like an investment portfolio where 90% of its income comes from a single stock. They need to diversify and hedge.

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