I think this is more about $UBER IPO. Stabilize the ship, smooth relations with investors, and start shopping to underwriters. Expect to see road show by Q2 2018.
There's no need for the candidate to be a visionary or meddle drastically with something that's already working extraordinarily well. That part is largely done - the Uber machine is mature and chugging along.
A seasoned operator needs to come in to provide PR cover, put in some basic organizational guardrails and rebuild the executive ranks to get the company IPO ready. Hiring a CFO is probably top priority as well as getting PR back on track. Those two moves alone would suppress external distractions and start the IPO process by having someone working on it full-time (CFO).
Let's see if Dara can pull this off.
When the opposite of "rock the boat" is in power, don't be surprised if you get an irrelevant cruise ship. They run out of money soon, and nothing will change that short of a mass layoff or raising their prices above taxis. Then what?
They needed that autonomous driving tech. And I don't see a money guy pulling that off.
Remember how Marissa Meyer turned out? People ended up saying "Well, nothing could've saved Yahoo." But you could've said the same thing about Apple at its nadir. Same with Uber.
Uber is a real opportunity. Kalanick is unpopular, but he got Uber to where it is. So how certain are you that it was a good idea to kick the founder in exchange for a money guy? Given those options, I'd bet on the unpopular founder every time.
If Uber wants to be a player in autonomous vehicles they have to become profitable enough to survive long enough to realize that goal. Kalanick's plan was always a pipe dream. Driverless cars just aren't going to be ready in time.
Companies can raise funds if people think it'll succeed.
Uber is very different. Their burn was $991m in Q4 2016 and growing.
"The real winner here is Yahoo, which is receiving far more value for this asset than it is worth and has also managed to halve its exposure to liabilities that it should be fully on the hook for. ... It is not difficult to still see upside in the Yahoo share price. Marissa Mayer may have been terrible at executing on a digital ecosystem, but she seems to be a great salesperson."
[1] http://www.investors.com/news/technology/yahoo-marissa-mayer...
You could argue that the damage was done, that Kalanick screwed up the company so badly that nothing could save it at this point, so you may as well try to cannibalize it for value. But the best investors know better.
Let it sink in: they're going to run out of money. What then?
If they really need to jettison more expensive parts of the business they can sell off their autonomous unit and their VTOL investments, along with a ton of other fat they can trim.
Your viewpoint does not seem connected with reality IMHO.
Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet.
Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.
If both companies push for profitability, then the market slows to the pace they both push it while remaining profitable.
If however only one company pushes for profitability now and the other has investors willing to fund growth for the foreseeable future we could see one emerging as a winner.
Personally, barring an economic downturn on the horizon, it's foolish to go public now if their competition doesn't also go public.
Because there is still plenty of growth opportunities across their various products globally, they can get at least 1-2 more private funding rounds before they truly need to turn to public markets for funding. They should take that money while it's still there.
Uber's model of survival isn't exactly self-driving ambitions, it's more about utilising their asset sheet effectively. That's why benchmark could be so eager to get a CFO - someone needs to vouch and stand behind the path to Uber's profitability. Right now, the only person who's left who can stand behind it is Travis, and he lost a lot of cred. Recent rumours about softbank investment might suggest that Travis thinks that this model can be extended even further at the cost of the dilution, and even greater market scale could be achieved (along with his own personal desire to lead on with that deal, possibly), but investors would rather not play another round of uncertainty and ambitious spending and would rather cash out quick. Also after an IPO the company would have a much better chance at leveraging a simple loan/bond to continue growth, as because the rate of its growth would still most likely exceed the interest rates.
Why is this a thing? Imagine all the useful things those billions could do. Feeding and housing all the homeless people in the USA, for example.
Why are you giving her credit for that? Nearly all of Yahoo's value was its investment in Alibaba (which happened years earlier). If anybody deserves credit for Yahoo's recent exit, it's Jack Ma.
Like Amazon? Because they used to break rules left, right, and centre. Their competitive advantage, in their early years, was ignoring tax law. The difference was that Bezos was smart enough to hedge against the day he'd have to comply, and to diversify.
Most online/catalog companies don't collect sales tax and leave it up to buyers to pay usage tax [which is legal absent a physical nexus https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota]. This remains the case. Amazon just got pressured into collecting because they're so big and have affiliate sales programs.
And Lyft got to where it is with no Kalanick. (... actually, does anyone know off the top of their heads, besides Lyft and maybe Uber employees, who founded Lyft and whether they're still in charge?)
The myth of the founder-hero who is the only person who can run a company usually has little evidence in its favor, but in this case it has explicit evidence against it. Lyft as a service is basically indistinguishable from Uber in markets where it serves both, possibly slightly better. And if Lyft acquires Uber, the two services get to stop competing on price, buying them plenty of time to figure out the self-driving tech (which, I agree, they need), and the combined company will succeed easily, no Kalanick needed.
(Also, I think "unpopular" is a pretty low-information description of why Kalanick got forced out. It could mean anything from "people on the internet don't like them" to "regulators don't like them" to "investors don't like them" to "employees don't like them," each of which have very different impacts on the company, and comparing an unpopular founder in one sense to another company's unpopular founder in another sense may not be meaningful.)
Also, how would Lyft ever buy Uber? Even if Uber and Lyft get 50/50 market share, which I think is impossible, you need to be way larger to buy out another company.
You are absolutely right that the TK/Uber combo going head-on against existing laws is what made ride hailing a reality for millions of consumers, but unless the pioneer has an air tight go-to market strategy to create and maintain dominance of the market, historically, the odds tilt strongly in favor of the second mover, third mover, nth mover (i.e. fast followers) achieving market dominance.
Facebook, the market leader was launched in 2004, MySpace in 2003 and there was Friendster in 2002 founded by Jonathan Abrams.
Zuckerberg learnt how not to run a social network from watching the mistakes of Friendster and MySpace before him.
Don't know where this 'crap pay' trope is coming from, might be different in different markets.
Can they raise rates enough to get to break even before IPO? Maybe. But that would drastically reduce pressure on their competitors. Lyft is growing fast. Uber can really only justify their current valuation if they end up with no real competitors and can extract monopoly rents.
So I think their CEO needs to do a lot more than stabilize things. They either need to find a way to make the current business work much better (something I'm skeptical exists) or to drastically change the business to one where they have more of a moat.
My guess, though, is that they have run out of "greater fools" [3], and that the public market would realize that Uber, at least as currently constituted, is not a high-margin tech company but a low-margin discount taxi dispatch company.
[1] https://www.axios.com/exclusive-uber-financials-2475912645.h...
[2] https://www.wilmerhale.com/uploadedFiles/Shared_Content/Edit...
They're currently far and away the market leader but that's a dangerous place to be. Lots of people want them to fail - both for competitive reasons and because they just hate the evil guy at the top.
Competition (backed by huge names like GM) is healthy in some markets for both riders and drivers, and they haven't been able to make a go of it in others. On top of that the autonomous space alone is going to be a war zone for the next decade and casualties will happen.
I'm sure big names such as Uber and Tesla are hoping for that outcome. Personally, I'll believe it when I see it. For now, both autonomous and electric vehicles are still looking like technologies with great PR videos but also quite a few fundamental problems with no credible solutions yet.
I wouldn't be surprised if Uber was aiming for a big IPO before too much of that reality invades those PR videos, particularly if the financial foundations of their current business model are as shaky as some reports have suggested.
And there are already examples of other companies making lots of batteries. LG is making them for the Bolt.
There are a lot of indicators that driverless cars arnt comming any time soon, and it seems like one of the few things that would work as a get out of jail free card for uber.
In any case, a market that is (supposedly) about to be rocked by major techtonic shifts is no place to make "sure bets" about the future.
Transport may be going autonomous, but it isn't there yet. It won't be affected until full autonomy goes live, and the network of drivers becomes obsolete.
It will be 5, 10, 15 years before technology, laws, etc. are mature enough. Meanwhile, uber needs to be the dominant ride-sharing service. That might be even harder if they're being too clever and thinking beyond the next couple of years.