Hacker News Reader

Comment by gdeglin | Hacker News Reader

Just one year ago, a NYU finance professor calculated Uber's risk-adjusted value to be 5.9 Billion. (http://fivethirtyeight.com/features/uber-isnt-worth-17-billi...). I wonder what he would say now...

View on HN

Aswath literally wrote the book on corporate finance. The valuation was done mainly viewing Uber through the lens of a taxi replacement. I think his caveat at the end explains away the pessimism;

    This framework lends itself easily to other narratives.
    For instance, one of the more optimistic takes says that 
    Uber is in the logistics market, i.e. it’s a player in any 
    business that involves moving people or things from 
    one point to another. That would lead you to define 
    Uber’s market more broadly and come up with a much 
    higher valuation.

Based on his way of assessing value Twitter is worthless. It has no profit. I think the real value in Uber is in how it has become so beloved by customers who hated using cabs. I know it's heavily impacted the way I drive. Living in Chicago I hated dealing with cabs, it made more sense to pay a slight premium to drive my own car and park in a garage. Now I can literally jump into an uber and be somewhere in minutes with a better experience and for less than a cab would cost me. That's awesome! That's powerful. That's going to change the entire transportation industry. Cabs are just the beginning.

His analysis used the size of the current taxi market as the ceiling for Uber's revenue. In San Francisco Uber is already generating 3x as much as the traditional taxi market was.

I know many people (myself included) who never used or would have considered using taxis but now use uber all the time.

The rebuttal: http://abovethecrowd.com/2014/07/11/how-to-miss-by-a-mile-an...

Reply on news.ycombinator.com