Uber Valued at More Than $50B • Hacker News Board

Re: Uber Valued at More Than $50B

#61

Post by alkonaut » Fri, Jul 31, 2015, 8:19 PM UTC

untog wrote: post #53

alkonaut wrote: post #49

Earlier quoted context omitted.

What is their remaining market? Are there many countries/cities that still have easily disruptible taxi markets (e.g. "Medallions" or similar)?

4 hours ago: Uber invests $1 billion in Indian market http://money.cnn.com/2015/07/31/technology/uber-india-1-bill... Yeah, there are some big markets out there yet.

Yes, but a market being big doesn't mean there is a lot of low hanging fruit in that market. In a market with a regulated number of cabs it's easy to see how uber can find market share (like in NYC). In a market without medallions or similar, where there is already competition among taxi companies making margins slim, I don't see how Uber can be so disruptive. Having an app, dynamic pricing, and abusing the workforce should be obvious steps already taken by existing taxi companies in those markets!

Re: Uber Valued at More Than $50B

#62

Post by myth_buster » Fri, Jul 31, 2015, 8:19 PM UTC

fooballs wrote: post #46

Wonder when we'll see the first $1T startup valuation. Probably not too far away.

Inflation will have to play a significant role. Going by how currencies are based, $100B startup is a reality although a magnitude higher would put us in hyper-inflationary zone perhaps.

Re: Uber Valued at More Than $50B

#63

Post by paulgb » Fri, Jul 31, 2015, 8:20 PM UTC

pitnips wrote: post #48

paulgb wrote: post #14

Earlier quoted context omitted.

I remember following Groupon closely and feeling like Groupon was spending a bunch of money teaching people around the world how to use daily deals, only to have competitors come in make it a race to the bottom because the barriers to entry were so low. I feel like Uber is doing the same: spending a bunch of money teaching people how to hail a cab from their phone. When competitors like Lyft, Hailo, and Via enter the…

Groupon doesn't have a network effect. Uber has a VERY strong network effect. In fact, it has the type of network effect that can keep its advantage over competitors (see Facebook versus Google+).

I wouldn't call it network effect, it's just a market. They need riders and drivers, just like Groupon needed buyers and businesses, but the fact that my friends use Uber doesn't stop me from trying Via. My Via driver the other night was telling me about how he drives for Uber on weekends. The switching costs are very low for both the rider and driver.

Re: Uber Valued at More Than $50B

#64

Post by spiantino » Fri, Jul 31, 2015, 8:22 PM UTC

gdeglin wrote: post #28

Just one year ago, a NYU finance professor calculated Uber's risk-adjusted value to be 5.9 Billion. ( http://fivethirtyeight.com/features/uber-isnt-worth-17-billi... ). I wonder what he would say now...

His analysis used the size of the current taxi market as the ceiling for Uber's revenue. In San Francisco Uber is already generating 3x as much as the traditional taxi market was.

Re: Uber Valued at More Than $50B

#65

Post by [deleted] » Fri, Jul 31, 2015, 8:25 PM UTC

nemo44x wrote: post #59

xgarland wrote: post #51

It'll be worth even more in the coming years, which is not hard to fathom when you look at Uber as a logistics company rather than a taxi-replacement.

I agree. I know people who crunch data for Uber and some of things they're doing are really valuable. All these rides - pickups, dropoffs, times of day, routes, etc. And this is just the tip of the iceberg what they're doing. These kinds of basic projects inspire more complex analysis I'm sure. The information gathered will allow them to move into new phases of development. The cab hailing service is not the end game…

[deleted]

Re: Uber Valued at More Than $50B

#66

Post by myth_buster » Fri, Jul 31, 2015, 8:25 PM UTC

DannoHung wrote: post #10

This seems ridiculous.

I think there will be no shortage of private investors who want a piece of pie and would cough up monies to that end. It's similar to properties. Real estate in Kensington, London is valuable but the market is ever dynamic so investors don't go by the historic trends but rather short term trends when deciding the value of property.

Re: Uber Valued at More Than $50B

#67

Post by pitnips » Fri, Jul 31, 2015, 8:40 PM UTC

flexie wrote: post #56

pitnips wrote: post #48

Earlier quoted context omitted.

Groupon doesn't have a network effect. Uber has a VERY strong network effect. In fact, it has the type of network effect that can keep its advantage over competitors (see Facebook versus Google+).

What network effect? How does my friends using Uber force me to use Uber as well? I see it more like a toilet paper or shampoo thing: My friends might recommend Uber, but other friends would recommend Lyft, and others a local competitor. There is nothing that locks me in. We can disagree and I can live with them using Uber and me using some other service for years. Unlike Facebook, Uber is easily replaced. I can't co…

More users (i.e., your friends) drive higher service levels (more Uber drivers and quicker service times, which spirals). There is no "forcing," just as no one "forces" you to have a Facebook account.

If you want bad service (long wait times, high prices) then your argument makes sense. However, the more people that use Uber will lead to better service levels and lower prices. Drivers benefit by minimizing wait times and being able to depend on the money.

And if you went to London, you get the convenience of not having to download a local app. You simply use Uber (what you're used to, what you depend on, what you trust), and you have one less thing to worry about in your travels.

Re: Uber Valued at More Than $50B

#68

Post by pitnips » Fri, Jul 31, 2015, 8:45 PM UTC

paulgb wrote: post #63

pitnips wrote: post #48

Earlier quoted context omitted.

Groupon doesn't have a network effect. Uber has a VERY strong network effect. In fact, it has the type of network effect that can keep its advantage over competitors (see Facebook versus Google+).

I wouldn't call it network effect, it's just a market. They need riders and drivers, just like Groupon needed buyers and businesses, but the fact that my friends use Uber doesn't stop me from trying Via. My Via driver the other night was telling me about how he drives for Uber on weekends. The switching costs are very low for both the rider and driver.

But it is a network effect. The more people that use the service, the better that service will be. If only a few people used Uber, there would only be a few drivers. This would lead to high prices and poor service levels. The more people that use Uber, the more drivers there are, and the lower the price and better the service. That leads to consolidation to those services with a high number of users, and those services will be the only ones that survive, hence the network effect.

Re: Uber Valued at More Than $50B

#69

Post by curiousjorge » Fri, Jul 31, 2015, 9:14 PM UTC

I'd hate to be Uber right now. The early innovators always bear the full cost of discovery and paving the way for future entrants who will gladly waltz right in once Uber establishes itself in cities by lobbying and fighting regulation. The barrier to entry is not as high they make it seem and like Groupon, a focus on future potential earnings without facing realities, almost always ends up in favor of late market entrants. I recall Peter Thiel talking about this in more detail how you should never be the first at anything and that if you can't build a monopoly you will face the same fate that other first movers have met.

Re: Uber Valued at More Than $50B

#70

Post by curiousjorge » Fri, Jul 31, 2015, 9:20 PM UTC

henrikschroder wrote: post #60

paulgb wrote: post #14

Earlier quoted context omitted.

I remember following Groupon closely and feeling like Groupon was spending a bunch of money teaching people around the world how to use daily deals, only to have competitors come in make it a race to the bottom because the barriers to entry were so low. I feel like Uber is doing the same: spending a bunch of money teaching people how to hail a cab from their phone. When competitors like Lyft, Hailo, and Via enter the…

You also have existing taxi companies to compete against. Way before Uber was a thing, my preferred company in Stockholm had a simple hailing app, it was basically one button for "I want a cab, here, now". No tracking, no payments, nothing fancy, but still. These days, Taxi Stockholm has a hailing app that is on par with Uber's app, and I just can't see how Uber can compete with that. I can use Taxi Stockholm and get…

I think the Taxi companies are taking note and Uber is going to force them to innovate since they feel threatened. If they are able to do this, I think Uber will find themselves in serious trouble.