Just recently, Uber (with some partner) started testing delivery robots in my (city) neighborhood. And I love Waymo, as much as I've been able to use them. Maybe automation will change the economics.
Also, IIRC, for many years, Amazon barely squeaked a profit. They wanted to be at the low end of the margins to capture market share. Once they got big enough, they increased their margins a little and started turning a big profit.
They report things like foreign currency transactions and stock based compensation as free cash flow.
The hope with uber is that they become an aggregator of AVs which belies an assumption that autonomous vehicles will essentially be a commodity. Or perhaps that AVs take much longer to become practical at scale than people think.
But one of the biggest red flags to me with this company is how they aggressively buy back stock and publicly announce that they believe it’s undervalued. You’re in the midst of an extremely competitive emerging market and your best idea for your cash is to… buy stock?
Well, keep in mind that 7 of that 12 billion went to cost of revenue (aka money paid to drivers etc). Turning a $770M profit off the remaining $5B isn't too bad.
There was something of a red flag in that last report as well in that for the first time as far as I can tell, profit grew exactly in line with trips and gross bookings. What that implies is that the unit economics are maxed out. The business is as profitable as it can be and their only hope is to add more riders.
I believe their comps are getting tougher and tougher every quarter as they aggressively drive to turn the profit spigot and squeeze more and more profit out of an inherently unprofitable business model. This is a single dimension stock that is 100% reliant on growing its user base.
They’ve been able to do that because users are aging into the platform faster than they’re aging out but eventually the well will run dry.