Gett in advanced talks to buy Juno for $250M as Uber rivals consolidate
techcrunch.com
techcrunch.com
This acquisition is nothing but acquiring users (although Junos has fewer drivers so fewer active users) and talents, as Gett itself can already do what Juno and other rider-service apps can do. I wonder if they will continue to run Juno as a standalone app like Seamless and Grubhub but share the same user database. I still wonder why Seamless and Grubhub can't shut down one of them, this seems like a marketing tactic than anything else, creating a diversion that there are other players in the market. Who knows, maybe there's tax advantage.
Also, I found it interesting that nearly all drivers have multiple cell phones logged into separate services, sometimes Gett and Juno! I wonder what the percentage of drivers Gett will be picking up that were already Juno drivers.
The sense I got was that they haven't unified the brands yet because they're really afraid of messing up the NYC market. Grubhub merged with Seamless in 2013 because leadership wanted to get into NYC, and Seamless owned/owns NYC. It's a hugely profitable market for the company.
They've toyed with the idea of bringing the brands closer (particularly around the Grubhub rebrand last year), but nothing's happened so far.
[0] https://gojuno.com/drive/meet/ Over a period of ten years, we intend to distribute to drivers a number of RSUs that would give drivers the same ownership interest as our founders upon an IPO or sale assuming all such RSUs vest.
TIL Juno.com still offers dial-up for $15.95/mo. Gone are the days of free dial-up with obnoxious banner ads.
Do you think if one company has self driving cars and the rest don't this is a competitive advantage? Perhaps they license the self driving car software to other companies which also presents revenue options.
What could Uber today with the resources being devoted to automated cars? Could the app be improved, could the route optimization algorithm be improved to create more ride shares? I and you won't know because those resources are going towards a different agenda today.
Customers want reliable transportation. Imagine if your internet company could only provide service when the weather was good. You'd quickly switch to the service that is reliable because being without service becomes unimaginable. This is especially important if you want to compete with car ownership and not just livery services. These companies also need to be reliable on pickup times. If a service take 5 minutes sometimes and 25 minutes at other times, most people will give up on them and go for the 5 minutes all the time service.
Uber, despite the seemingly coordinated smear campaign, reigns supreme in this area.
Article: "Gett in advanced talks to buy Juno for $250M as Uber rivals consolidate"
HN: "Ubser rivals consolidating: Gett to buy Juno for $250M"
I wonder if the HN headline is as-submitted or mod-ified.
The latter title leans much more on the Uber link, while TC's headline puts it at the end.
If we didn't have all of Uber scandal stuff going on, I wonder which title would've been submitted to HN:
"Uber rivals scrambling as Gett buys Juno for $250M", maybe?
Here's a fun query to run: Pull HN submissions and go back to the linked articles. Pull those headlines, and then remove ones too long for HN's length limit.
Of the remaining headlines, normalize and see how many HN posts modified the title in some way.
It's exactly how Trump won the US election. A small group of people spread the idea Uber is doing poorly when in reality they're not.
The leaked financials[1] seem to indicate it's a losing proposition until self driving cars are relatively ubiquitous.
So whenever it does become financially viable, there's a pretty long payback cycle. And no obvious iron clad moat that keeps competitors at bay...ones that aren't under pressure to pay back investors for years of subsidized prices.
Of course, the leaked data is incomplete, and using unusual accounting, so perhaps I'm wrong.
[1] http://gawker.com/here-are-the-internal-documents-that-prove... and http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver...
Revenues growing exponentially from 2012-2015. The revenues in 2015 were even higher than the predictions done 2 years earlier (that were actually planning for a steep exponential).
At this rate of growth. They should be making 1-2 billion in revenues per quarter now. Wish we had a recent leaked document.
That's a solid multi billion dollars business. Worse case scenario if they run out of subsidies: Stop distributing tons of incentive in unprofitable markets + fire half the staff (they have too many anyway) = back to positive.
Anyone can drive big revenue by taking huge piles of investor cash and selling things below margin. That isn't magic. If that buys market share with a moat, it may make sense. If not, it's unwise.
What matters it the size of the shovel they are using (their expenses and subsidies) and the force of the wind that's refilling the hole with nearby dust (the customer revenues).
They can reduce their shovel without impacting the wind too much.
I don't see what Uber's moat is once self driving cars are common. It seems they will be fighting off competition (car companies, Waymo, etc) that didn't have to spend money on lobbying, lawsuits, subsidies, and so forth.
Self driving cars are just hype that won't be any significant for another decade. You should forget about self driving cars.
What Uber has right now is real, a massive customer base and network of taxi, that is bringing billions of dollars. They could totally focus on that and have a strong and sustainable business.
They bring you business. Yes, it helps you that the taxi can have a phone with lyft in the same car. It gives the illusion of choice and it gives an alternative to the driver.
In the end, your business has 90% market share. It's not going away overnight. Market share is actually self sustaining and it's giving you a strong edge for the future.
Competitors don't have 1/10th of the cash. If they get try to compete on subsidies, they'll get a peak of traffic and run out.
"Sell at a loss but make it up in volume" probably doesn't work well for many :)
The bigger thing, though, is that you keep implying that I said Lyft was somehow in a better spot. Now you're noting I never mentioned Lyft.
Nothing I'm saying is affected one way or other by Lyft. Pointing out that they have the same problem doesn't change the rationale.
Anything that delays them means Uber burns more cash subsidizing cheap prices to hold back competition.
And once they do arrive, competitors can enter the market with lower costs.
Or, maybe Uber isn't losing as much as it seems? (Estimates are $2+bn/yr) Or there is some moat that protects them? I just don't get it.
A while back another user did this math using leaked financials from Uber and Lyft and Lyft deserves more criticism for subsidizing rides than Uber:
Subsidies don't work at scale. The bigger the ridesharing market gets, the less a company can meaningfully provide a subsidy that changes consumer behavior. Whichever company can get to breakeven before R&D and capital investments are taken into account is going to clean up because at that point they can outlast their competitors indefinitely.
https://news.ycombinator.com/item?id=13772168
I don't understand how so many people on HN falsely believe that Uber is the only one subsidizing rides. My only explanations are ignorance and astroturfing.
But I didn't.
I said, roughly, that the current model is unsustainable and loses money. If Uber is losing $2-3bn/year, and Lyft is losing $600/mn, that doesn't contradict that. People talk about Uber because they are the market leader, and because their hubris and antics add additional risk to the already shaky model (like the Waymo suit).
On the "knew about these downloaded files", that's not the story Waymo presented[1]. They said an email from a supplier had attached files of a Uber lidar board that looked a lot like a Waymo proprietary board. That is what prompted a look into the logs.
[1]https://medium.com/waymo/a-note-on-our-lawsuit-against-otto-...