Uber Raises Funding at $62.5B Valuation
bloomberg.com
bloomberg.com
I was in Mexico City last week where I truly came to understand the enormous impact Uber as a company has had in these past few years. The service was highly prevalent, popular, and the experience was completely seamless — just like in the US. It barely skipped a beat. Their execution is likely a prime business case study in that no other company has built a technology business that has a huge, real-life logistical component this fast — and in dozens of cities around the world, spanning an equal number of ways of doing business and cultural barriers.
Not saying that's good or bad. Just my opinion.
Wait until we see more and more drivers whose only job is Uber no longer able to work. What do we say to the veterans who, after being rejected everywhere else due to a dearth of skills took out a car loan on a new $60k SUV to drive for Uber, only now to get injured? Who's going to take care of them? Won't be Uber, who will just be shoving the middle finger in their faces. And I don't think you can call this a strawman, given how aggressive Uber is with vets.
This sounds strikingly similar to the working conditions undocumented immigrants encounter in US agriculture.
It's NOT better than nothing. In a proper first world country, you'd have a real safety net for people to fall back on instead of being exploited by shitty technology companies.
What? Nearly all the big and global freight/logistics operators like DHL, FedEx, TNT et al have a huge and sophisticated tech infrastructure to service their clientele and if I dare to say more advanced and demanding than what's in Uber's possession.
Uber is so valuable because they control the network with the most riders and drivers. Their app isn't special. Their network is.
Decentralization shifts the profits of information network effects from companies to the public where they belong. We now have the technology to build decentralized application protocols that don't require a middleman to connect people for a fee. Instead, multiple companies will use the same network and compete to provide the best experiences. The profits to be had from facilitating networks will drop drastically when anyone can compete on a network no one controls.
Billions of dollars disagree with me, but I think those dollars don't see what's coming. Blockchains have kicked off a decentralization renaissance, and it's coming for everyone.
- some pretty famous angle investors
- some pretty famous venture capital funds
- some pretty famous investment banks
- some pretty famous private equity firms
- some pretty famous hedge funds
- some pretty famous mutual funds
It's worth asking, if they have reached the point where their success becomes less about their execution, though that's still important, and more of a self fulfilling prophecy.
I mean you now have some very influential people to call on if you need help on navigating the IPO process, or government lobbying for rules changes, etc.
I've completely changed my mind on Uber, 18 months ago I would have felt nervous as employee joining them when determining if my options would be worth much. Now, I'd be asking if i could put 50% of my paycheck towards buying more options.
Steve Balmer was famous for acquiring as much Microsoft stock as he could, even after he became the CEO. I'd be mimicking Steve Balmer here and acquiring as much Uber as I could right now.
Business is, always has been, and always will be, heavily about networks. You can do it without them, it's just drastically harder.
less upside and less downside.
>Uber-type companies need to be understood as a radical departure from Amazon/EBay type models. Instead of displacing competitors through actual efficiencies, or by creating entirely new markets, its model is entirely based on getting the world to believe that it will inevitably dominate the entire industry. This requires aggressively suppressing any discussion of empirical economic evidence (which would undermine its case) and emphasizing the factors driving inevitability--the brilliance of its early stage investors, the ruthlessness of management, and the raw political power of the company’s wealthy supporters. PR is a component of every start-up; at Amazon/EBay it played a supporting role and relied heavily on economic evidence of competitive strengths, but at Uber PR is the heart of the plan, and replaces the need to figure out how to provide much better service at much lower cost.
https://pando.com/2015/12/01/has-pando-missed-heart-uber-pro...
I would be surprised if the market for cab companies in Austin is as large as the market Uber serves. I really cant recall the last time someone here told me they got in a cab. I think those people just drove themselves places before Uber instead of taking a cab. I certainly did.
Interestingly 2 of the local cab companies now have Uber-like apps, which are quite nice to use.
Anecdotes!
Its a solution for 20 something singles. That's not a terribly huge market, and definitely not one worth billions of dollars.
Furthermore, they said the same things (20 something singles) about Facebook. Now my parents are on Facebook. The key is that Uber has the potential to change market behavior. Well, more than just the potential - it is changing some market behavior, as evidenced by this anecdote. The potential is that it has to potential to change the transportation spending habits of many more people.
Transportation is going to change regardless. Electric self-driving cars are going to be manufactured by several companies, perhaps operated by those same companies (or leased to others).
Why would Google provide its tech to Uber when Google already has access to the market through Google Maps? Why would Tesla provide its self-driving cars to Uber when it could build them and sell ridesharing directly (which Elon has specifically indicated he wants to do by his response to said questions during investor calls).
Uber is just an app, no more, no less. The Gorillas are the tech companies doing the real work.
Almost seems like this is the ideal point to join one of these unicorns.
If they don't generate revenue then the sky is the limit!
They make a ton of revenue....
In order to increase the value of the company, Basecamp has decided to stop
generating revenue. “When it comes to valuation, making money is a real
obstacle. Our profitability has been a real drag on our valuation,” said Mr.
Fried. “Once you have profits, it’s impossible to just make stuff up. That’s
why we’re switching to a ‘freeconomics’ model. We’ll give away everything for
free and let the market speculate about how much money we could make if we
wanted to make money. That way, the sky’s the limit!”https://signalvnoise.com/posts/1941-press-release-37signals-...
I like the libertarian/wild west mindset of the internet. It doesn't however lend itself to integrated public transport systems - of which, private hire taxis are a part.
Plus, it is replacing local businesses with a multinational that will probably send its profits to an island (like lots of other technology companies), rather than contributing to local economies. I think it is the next Groupon though, so at some point it may pop.
Each driver did his best to cut costs and raise revenue like: break traffic laws, not pay for insurance, not service their cars, not clean their cars, etc.
And since hailing a cab doesn't really give a lot of consumer choice besides what cabbie happens to be driving by at the moment, "competition" is loosely applied at best.
Pre-regulation, this would mean chances were fair that you'd enter a cab driven by a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency.
At least according to Time magazine in 1976: Modern Living: Call Me a Taxi, You Yellow Cab!
"a verbally abusive asshole who can't drive well, blows smoke into your face at a 15 second interval, doesn't know the city, and has basically no regard for human life or decency" sounds a lot more like taxi drivers than Uber drivers (with the exception of "doesn't know the city", fortunately we have other mobile apps for that too!)
http://fortune.com/2015/05/22/uber-lyft-disabled/
http://www.wired.com/2015/08/uber-disability/
http://www.thedailybeast.com/articles/2015/05/21/uber-disabi...
http://time.com/3895021/why-the-disabled-are-suing-uber-and-...
I had no idea lyft was losing 3x the their revenue. That is crazy.
Now that the promotion is over and credit depleted, my default ride app is back to Uber.
I am curious how the promotion will work out for them long term - I'm sure some people continue using the app after signing up (stickiness), but a lot of people likely switch back to Uber since it's cheaper.
It became a "verb" and well, here we know what that means: "xerox that paper", "google this term"... Nobody is Lyft-ing and everyone is Uber-ing. Once it's verbified, it's hard for competitors to overcome it.
I, for one, have used neither. But I have friends and family who travel a lot. Some are in their 20s, 30s, and some in the 60s and they all say they Uber places vs taking a taxi. They don't know about Lyft-ing.
Now what is the underlying reason for that. Maybe luck, maybe time to market, maybe pricing, I can't tell you.
- Uber has no moral compass
That's pretty much it.
I'm not exactly sure when Lyft stopped focusing on international markets to double down on the U.S., but I feel like much of the losses are from "failed" international experimentation.
With my experience in Ohio, I use both preferring whichever can reach me quickest (a 15-20 minute wait here is not abnormal).
Most tech people I know have both apps installed and use both, like you do. But I don't think that's representative of the general population.
It might be a shit show internally as any growth spurt might have but by the time Lyft tries to enter some of these cities (and that's an if) Uber will have already captured the entire market and it might be a very steep uphill battle to try and gain market share.
And how much Xeroxing is done on Xeroxes?
I get worried when more than 60 days goes by without them announcing a MegaRound(tm) at an InsaneValuation(R).
Preferred stock gets paid out first, so the actual "valuation" here is less meaningful. Preferred investors would still make a profit if Uber exited for $8B instead of 62.5B.
Uber is now valued at 15.6 Lucasarts!!! Hooray and congrats to all involved in this grounded and logical valuation!
Maybe I am reading this the wrong way but in broader context of this article it reads as they are trying to say that the actual revenue may be much lower. They should explicitly say that for a growth company like Uber, the actual revenue # would be much larger.
Quick example, if 10 riders take an Uber and their cost is $20/each, Uber would report $200 in Gross Revenue. Since their driver split is something like 80/20, their Net Revenue would only be $40.