New Uber CEO Says Company Could Go Public in 18 Months

I'm going to re-post one of my previous comments on this topic because I think it's relevant:

"In my opinion, all they need is someone who is demonstrably competent and experienced to stabilize the ship and steer it towards an IPO.

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)."

Original comment here: https://news.ycombinator.com/item?id=15113953

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So I think this is pretty much par for course. Dara will likely be laser focused on removing distractions and kicking off the IPO process and shepherding it along. In fact, there's probably a clause in his employment contract that gives him some kind of large bonus for successfully delivering an IPO within XYZ timeframe.

Guys this is somewhat fake news. The question was what his thoughts were on IPO. He basically said it's up to the board, but 18 to 36 months seemed reasonable. It wasn't like he's actually planning on IPOing in 18 months, it was an off-the-cuff response and gave a ballpark figure. That's all, don't read too much into it he hasn't even officially started yet.

What a surprise.

Can we break down the numbers on how much they'd likely receive from an IPO vs their burn rate? It's hard to imagine that an IPO would deal with most of their problems.

https://news.ycombinator.com/item?id=15116399 is a good analysis.

Also, non-paywalled article: http://archive.is/hOt4v (Thanks to philippnagel for pointing out this trick.)

When it comes to Uber's future, there's good news and bad news. The good news is that none of the "scandals" we've heard so much about matter. Not the culture, not the lawsuits, not even the firing of the CEO. None of those things would be able to sink the company, assuming that the company has a strong business model. And that's where we get to the bad news: Uber doesn't HAVE a business model.

Nothing about Uber makes hired car rides fundamentally cheaper than anything before it. Cars still cost the same amount of money to buy/rent and operate. That cost hasn't gone away, even in the iPhone era. If Uber is not paying those costs directly, then someone is. In the Uber model, it's just been transferred to the driver, for whom driving is as a result less profitable. So much for the car. The other component of a ride service is the driver himself. A driver's undivided time costs the same, whether he's driving for Uber or for an Uber clone or for a local taxi company. Human labor hasn't suddenly gotten cheaper just because you can hail them on your iPhone. And you don't even want the cheapest possible labor here, for the sake of your own safety.

Oh, but you say, if the drivers were to be entirely replaced with self-driving cars, then Uber's margins would be amazing right? Yes, they would be. But self-driving cars are not coming anytime soon. Just ask the people most invested in Uber: the investors. They want you to wait for self-driving cars to fix Uber's non-existent business model, while they themselves can't wait to cash out as soon as possible.

Even if it does happen many years from now, it doesn't put Uber in a good position. The self-driving car technology will be a commodity. There will be no barrier preventing anyone else from launching their own fleets. Uber's product also has no network effect and is not sticky. Its customers are not buying an experience, they are buying a utility (a ride from point A to point B at the lowest possible cost). As a result, customers have zero loyalty and are happy to switch to the lowest cost competitor.

Uber has hugely impressive numbers though right? Yes, tons of revenue and no profits. Because who would pass up a private car ride from San Francisco to Palo Alto for $45 when a taxi would cost $125? As long as VC's subsidize rides, customers will continue to buy them.

There are hundreds of startups planning to IPO in 18 months. Many have held steady with this plan for 5 years or more. For as long as four years they've been saying, "but this time, really, 18 months"

It's about time their investors get a massive liquidity event. I tend to think the lack of an near term exit strategy was one of many reasons Travis got the boot.

This is wonderful news. This is how capitalism is supposed to work. I wonder if the recent uproar around uber could have mitigated by publicizing this earlier.

Uber ICO? Please speculate on possibilities and help the press to collect data points so they can mash together 2 of their favorite narratives. Bonus points for looping in autonomous vehicles.

IPO would really just be a way to cash out investors with no real return on the horizon for the new shareholders?

Speaking from their current burn rate, lawsuit, potential new technology/driverless cars.

That was the plan all along. Travis didn't want to IPO so soon.

Do not invest in Uber. It would be downright stupid to do so. What is their product? Providing rides? No, that's what drivers do. Ubers product is running a bunch of servers, a mobile app, and bearing the first-mover disadvantage of fighting with all the regulators about ridesharing. The problem with this is that those servers and that app? The thing that collects the money for Uber? No one needs Uber for that. Tomorrow someone could launch a fully peer to peer version of the software that runs in distributed fashion across all devices it gets installed upon, cutting them completely out of the loop, making rides cheaper and making drivers more money.

And if Uber perfects self-driving cars if they are deluded enough to think they can replace their human drivers with a roving fleet of such... oh how childish and stupid that would be. I would give it 10 days before someone would introduce GUber which lets individuals with self-driving cars to time share them out when not in use via an app, destroying Uber swiftly and making every self-driving car they own (and maintain) a liability.

The only way I could see them remaining interesting for more than a couple more years would be if they developed an awesome self-driving car - and gave it away for free. With anyone who accepted one obligated to permit the thing to be time-shared out by Uber to provide rides when its not being used with X number of hours of availability given per month. That would be hard to compete with, whether through peer to peer or individuals renting their self-driving cars...