Comment by michaelbuckbee | Hacker News Reader

Comment by michaelbuckbee | Hacker News Reader

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I think this is like arguing that Amazon would never be worth a Billion dollars because there aren't enough book buyers.

If we were talking about Uber's current model then you're 100% correct. But if we look at all to where they're going there's tremendous potential.

They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous. They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?

I'm skeptical of the notion that the big auto manufacturers (who had a conniption fit at the mere notion of Tesla selling cars direct, instead of through a dealership) nimbly setting up autonomous, on demand fleets of vehicles which destroy their dealership network and also cost them half of their revenue.

Yes, they are losing money, but they're playing a very different game than the local taxi company.

You are missing some points:

> They bought Otto - which is arguably the leader in self driving trucking and they have self driving trucks on the road right now. If they're able to capture say 20% of the trucking market 10 years from now that's tremendous.

Otto until now is not a truck company. They are not producing any truck. They are just retrofitting their technology in existing trucks. It is like what Google does and what I told everybody and laughed at me. Google had and has no interest in building cars. They have a very bad track record in building hardware for consumers. That said, Google is a software company. Google wants to sell their Software knowhow to the car industry. The very same seems to be true for Otto. Otto is just a technology company that does retrofitting. But all the truck manufacturers are building their technology directly into the trucks. Remember, that Freightliner and other Brands are a Daimler company. Daimler has self-driving technology for their cars and are integrating them into the trucks. The future for Otto would be a partnership with at least one big truck manufacturer, which is not in sight. Otto will become obsolete, when it does not get such a partnership. So for Uber that is a high risk investment.

> They're in a legal fight in SF because they're trying to get self driving cars going. What are their numbers going to look like when they aren't paying drivers anymore?

You forget, that in the case of self-driving cars, then Uber has to buy (or lease) those cars. Today, they pay the drivers only for the work done, while the driver has to pay for the car and the service. So the risk and costs are distributed to the drivers. But with self-driving cars these costs are becoming Uber's costs. But Uber has until know no knowledge on handling own property. What about Car2Go, Zipcar, and alike? They can easily exchange their existing car fleets. They have knowledge and experiences on handle car fleets. Think about that.

I have no clue what Otto is, never heard of that brand. As far as I'm concerned its a first name. However, you getting laughed at saying:

> That said, Google is a software company

..is because Google is not primarily a software company.

Google is first and foremost an advertising (or 'profiling') company which uses whatever tool (software, hardware, service, complete stack) at their disposal to increase profit derived from -you guessed it- advertising. What Google wants is to have their software and service in every car in the world. Cars are akin to Android devices. At best, Google would make reference models to give the right example (this is what Nexus originally was as well). Google goes for volume (like it did with Android, and like Microsoft did with Windows and Office), Tesla is the Apple who goes for the top segment.

Facebook is in the same league. Microsoft, with Windows and Office, used to be a software company, selling software licenses. They're reinventing themselves away from that ever since Mr Nadella's been behind the steering wheel.

Don't mistake an advertising (or 'profiling', or even spying) company for a software company. Even then, traditional software company is vastly different from SaaS which even Oracle is heading towards. Tesla, Apple, and -sortof- Microsoft have very different business models than Google and Facebook.

Google is indeed a software company the same reason why the "big 4" firms are considering accounting firms.

All the big 4 accounting firms have HR, legal, PR people, in addition accountants but the reason why they are called accounting firms is because accountants dominate their hiring.

In other words, accountants make up the bulk of the people in their revenue centers.

Same with Google: they hire a lot of software engineers that contribute directly to their revenue.

> Same with Google: they hire a lot of software engineers that contribute directly to their revenue.

(I know nothing about accounting, so can't comment on that.)

Yes, in that sense it is true.

In the sense of the end product (software licenses not being the primary source of income), and the way profit is gained (advertising), it is untrue.

I guess it depends on perspective.

>they hire a lot of software engineers that contribute directly to their revenue.

As engineers that how we'd like to view the world, but that's not how accounting and business management work. Those engineers are a cost, nothing more. The sale of ads is Google primary source of income. The fact that engineers had to build the tools and platform for selling those ads is irrelevant. The technical stuff is "done" at this point, and now the sales people need sell enough inventory to make up the cost of production.

Even if you're a pure software company, one that sells software, the developers are still a cost, that does not directly contribute to revenue, only the sales department does.

Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.

>The sale of ads is Google primary source of income

No, the sale of AD SPACE is Google's primary source of income. And that AD SPACE is primarily in Google's own software products (Search, Mail, Maps etc) although of course they've built a platform for others to sell related ad space...

>the developers are still a cost, that does not directly contribute to revenue, only the sales department does. Logically it's a bit silly, because you need to build stuff to sell it, but that's not how account and management view the world.

The recent season of Silicon Valley had a hilarious arc depicting this thinking. But it's important to note that not all business organizations maintain that philosophy

So Uber's marketing BS is working.

Self-driving trucks and, even more so, cars, are by any reasonable measure decades away. There are technical challenges that we have no answer for. Like all technical challenges, they can probably be overcome, but no one knows when or how, and what hardware advancements are necessary. That's not even getting into the regulatory hurdles.

Put out a demo proof-of-concept and people think that the product is ready. It's like those 'life-like' Japanese robots that have some people thinking that we are almost ready to replicate humans, just because they put a pretty silicone skin on top of a simple mechanical contraption.

This isn't about marketing. Uber is literally pushing toward this. They hired most of CMU's National Robotics Engineering Center! They're making this push, and it's either that or bust for them.

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