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Uber confirms SoftBank has agreed to invest

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Re: Uber confirms SoftBank has agreed to invest

#81

Post by usrusr »

konschubert wrote: post #55
timewarrior wrote: post #34

Earlier quoted context omitted.

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

I think the crucial point here is really that uber's two-party networks are city-wide. Yet because Uber is operating globally, it's falsely being valued as an international two party network.

The rider network is somewhat global. In any larger city, Uber could probably sustain a minimum viable driver network just from international visitors. This does have value.

But this value is also impossible to defend against the combination of more local networks aggregated by some global directory specialist who follows a low cost/low commission/high volume strategy.

Re: Uber confirms SoftBank has agreed to invest

#82

Post by kogepathic »

loceng wrote: post #78
nopinsight wrote: post #68

When I look at their runway and valuation going forward, IPO is the most probable path they will take. But it might imply some risks to the overall startup IPO scene in the future as well. Apparently Uber is bleeding about $2 billion a year and have only $6.6 billion in cash reserve. If this deal adds $1 billion more cash, then that would only last 4 years. Since full-scale self-driving cars launching across most maj…

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> How many vehicles could Tesla create AT COST spending the $2B / year that Uber is burning?

While I don't disagree, I think the major question here is "how many vehicles can Tesla create" given their difficulties in scaling Model 3 production.

Tesla could have the best self-driving tech, but if it is exclusive to their cars and they can't manufacture them fast enough, someone else will build their own fleet and win all the market share.

Unfortunately I see Tesla's hurdle being manufacturing volume, and that's a lot harder to solve quickly than fitting sensors to existing cars.

Re: Uber confirms SoftBank has agreed to invest

#83

Post by nickserv »

timewarrior wrote: post #42
mandeepj wrote: post #41

Earlier quoted context omitted.

> Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? > Additionally you need people maintaining them. This is why I think Tesla is a bigger threat to Uber in long term. If you are not sure then refer to Tesla's plan 2 but Uber also have a counter plan - UberAir https://www.tesla.com/blog/master-plan-part-deux

I somehow feel that Autonomous drones would be easier to build than Autonomous cars. Benefits of Autonomous drones: 1. Do not need to deal other non autonomous devices while in flight. Cars needs to deal with human, other cars driven by humans. 2. Do not need to follow existing road traffic rules. 3. Lot of paths available. Cars are limited to existing roads. Drones can have a lot of flight paths. I understand that t…

> Do not need to deal other non autonomous devices while in flight.

In a decent-sized city, there will be low-flying helicopters for police, fire and medical emergencies. Admittedly, this is much less common than for autonomous cars, but any slight problem could easily become catastrophic (no such thing as a fender bender in mid-air).

> Do not need to follow existing road traffic rules.

But do need to follow existing air traffic rules. New regulation would also certainly be drafted (one would hope anyway).

> Lot of paths available.

Maybe, again depends on regulation. Commercial airplanes do have certain "lanes" they are supposed to stay in, and are not allowed over certain areas.

Re: Uber confirms SoftBank has agreed to invest

#84

Post by yeukhon »

ttul wrote: post #45
yeukhon wrote: post #24

Earlier quoted context omitted.

They might spin off the autonomous program into another company to raise fund, prior to IPO, perhaps, just a thought. I think that's a better option financially.

There is no future for Uber without automated cars. Think of it this way: as soon as someone else has an automated fleet, Uber is finished unless it has its own. This is an existential requirement.

You are missing the point. If spinoff, Uber is the parent company. Spinoff is not to remove the new company entirely, just financially and operationally. It's only telling the world "our main company - the one in IPO, will strengthen core business so we burn less money, while our research team is working in the new spinoff company." That's how I would run my company. YMMV. When UberAuto is ready, Uber can merge or have Auto license back. This should be seen as a wise move for the new Uber, given it is burning so much money in the core business already.

Re: Uber confirms SoftBank has agreed to invest

#85

Post by usrusr »

rileymat2 wrote: post #36
timewarrior wrote: post #34

Earlier quoted context omitted.

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

Wouldn’t Running your own cars would mean incredible capital costs and marketing costs to get people to switch from uber? Additionally you need people maintaining them.

Marketing would be negligible because Uber has already created that market: "that other app where there is no driver begging for tips like on Uber" would not need much help selling itself (assuming uber would be phasing out drivers incrementally, while a robotic competitor would start 100% driverless).

As for capital costs: I would expect competitors to have a much easier time raising capital for their fleet than Uber, where all new investors have to to share their stake with several billions (!) of pre-selfdriving investment. Not every competitor will be drowned in investment, (there is an infinite number of ways to share off investors) but one or two will be enough to cause serious trouble for uber.

Re: Uber confirms SoftBank has agreed to invest

#86

Post by loceng »

kogepathic wrote: post #82
loceng wrote: post #78

Earlier quoted context omitted.

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> How many vehicles could Tesla create AT COST spending the $2B / year that Uber is burning? While I don't disagree, I think the major question here is "how many vehicles can Tesla create" given their difficulties in scaling Model 3 production. Tesla could have the best self-driving tech, but if it is exclusive to their cars and they can't manufacture them fast enough, someone else will build their own fleet and win…

They're a new automotive manufacturing company - being a few months off estimated production for Model 3 isn't a big deal. It's surprisingly good in hindsight.

Their current capacity capability at the factory is 500,000 vehicles annually. I suspect once they launch the Semi and get 500k+ pre-orders of it, they'll be able to get a loan to build or acquire another factory.

As Elon has mentioned many times, designing the automation is magnitudes harder than designing the vehicle itself. They're on an exponential growth path and it's going to be amazing once they're pumping out millions of vehicles annually.

Re: Uber confirms SoftBank has agreed to invest

#87

Post by [deleted] »

timewarrior wrote: post #34
rileymat2 wrote: post #33

If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

[deleted]

Re: Uber confirms SoftBank has agreed to invest

#88

Post by jellicle »

timewarrior wrote: post #34
rileymat2 wrote: post #33

If Uber was only a world wide Taxi company with virtually no capital costs, wouldn’t this be incredibly profitable alone? I am not clear on the impetus everyone sees for Uber creating self driving cars. If developed by another company, can’t they just add them to the service? Do they really want to be responsible for that capital?

Uber is valuable only because it has solved a two party network problem at a city level. You need drivers and you need riders. If you don't have any drivers riders won't come and vice versa. Two party networks are much more difficult to solve than one party network problems. Because with two party networks you have a chicken and egg problem. Anyone who has solved self driving, has near unlimited scale on the driver s…

But in fact UBer has cleared the way for any other taxi company. Uber's drivers can all (within one single day) download the app of any new company, and switch to driving for them without a hiccup. Uber's riders can all (within one single day) download the app of of any new company, and switch to hailing them without a hiccup.

There's no barrier to entry at all.

Re: Uber confirms SoftBank has agreed to invest

#89

Post by elmar »

loceng wrote: post #78
nopinsight wrote: post #68

When I look at their runway and valuation going forward, IPO is the most probable path they will take. But it might imply some risks to the overall startup IPO scene in the future as well. Apparently Uber is bleeding about $2 billion a year and have only $6.6 billion in cash reserve. If this deal adds $1 billion more cash, then that would only last 4 years. Since full-scale self-driving cars launching across most maj…

IPO is good for Uber - not for society though, who will be the ones to capture the losses. Also, Tesla often is brought up in this competition - usually mentioned between Uber and Lyft and Chinese companies - however Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of. How many vehicles could Tesla create AT COST sp…

> Tesla is positioned to dominate here. I wouldn't doubt that they're working on the apps internally to create the shared vehicle system that Elon speaks of.

Is Tesla Preparing to Roll Out its Ride Sharing Program With the Model 3?

http://www.thedrive.com/sheetmetal/13075/is-tesla-preparing-...

Re: Uber confirms SoftBank has agreed to invest

#90

Post by smeyer »

yeukhon wrote: post #29
moxious wrote: post #25

Earlier quoted context omitted.

If the autonomous stuff works (HUGE if) it would completely change the core business. I can't see why they'd spin it off. Why sell your future unless you think it won't work out.

I am not really good at this stuff, but I see separating focus. Call it UberAuto, Uber would become UberAuto's parent company. UberAuto could receive new VC rounds and a new CEO appointed, focus on the autonomous development, while the parent company focuses on its core business and get ready for IPO. Waymo is a spinoff from Google (and Alphabet is Google's parent company). Ebay, HP all have its own spinoffs. Edit :…

In business, spinoff typically refers to creating a new company with separate ownership. E.g., PayPal is a spinoff of Ebay and Agilent is a spinoff of HP but Waymo is not a spinoff from Google, because they share the same ownership.
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