Uber IPO

c.p.w.g.w

So what is everyones thinking on this. Will we see shares prices jump on opening day. Apparently they are priced at $44-$50 a piece.

Will the driver strike have any affect to investers

Thargor

I'm staying out even though I know I'll probably be kicking myself afterwards.

Markcheese

Do they have a projection yet of when they're gonna start making an actual profit...??

c.p.w.g.w

Markcheese wrote: »

Do they have a projection yet of when they're gonna start making an actual profit...??

Read somewhere that in the 68 countries they operate in, only 2% of the population have used their services, obviously space to grow.

Jim2007

c.p.w.g.w wrote: »

Read somewhere that in the 68 countries they operate in, only 2% of the population have used their services, obviously space to grow.

How is it obvious? It could just as easily mean that they have totally failed to penetrate the market and are unlikely to do so... the taxi industry is very competitive, the rules vary country to country making a cookie cutter approach difficult to execute, they have encountered significant opposition in several cities and there is a low barrier to entry.

So what factual evidence makes it obvious to you that they have the potential to grow significantly?

listermint

There is quite negative sentiment around the company. They are a shining example of a race to the bottom in terms of workers rights and or wages.

Jim2007

listermint wrote: »

There is quite negative sentiment around the company. They are a shining example of a race to the bottom in terms of workers rights and or wages.

One should always be very careful of investing in a company that does not make an effort to publish financial data and instead simply refers to SEC filings. Kick out all the nonsense about how much stuff was booked through them etc... and all the remains is a company which a huge turn over that has yet to make a profit and a recent growth rate of 2%. How it pans out is simply guess work nothing more.

c.p.w.g.w

Jim2007 wrote: »

How is it obvious? It could just as easily mean that they have totally failed to penetrate the market and are unlikely to do so... the taxi industry is very competitive, the rules vary country to country making a cookie cutter approach difficult to execute, they have encountered significant opposition in several cities and there is a low barrier to entry.

So what factual evidence makes it obvious to you that they have the potential to grow significantly?

I said space to grow, there is % of the population higher than 2% who have their services available to them. Didn't say they will grow, just that there is certainly space to grow

phantom_lord

What does it matter if you've space to grow when the model doesn't work. They lose money. Drivers and users have no loyalty. There's no moat. There's no future in the business. Literally can't see anything appealing about it. They're big, but that's easy to do when you're subsiding rides.

Jim2007

c.p.w.g.w wrote: »

I said space to grow, there is % of the population higher than 2% who have their services available to them. Didn't say they will grow, just that there is certainly space to grow

Their total market is much lower than 100% of the population, in reality it’s a couple of major cities per country. The 2% growth figure may well be an indication that growth may well be leveling off... The fact that they are trying to push the Uber Eats may well be another indication that even they know it. But they already seem to have gobbled up 25% of that market.

Then there is the question of how to finance growth. They have built up a significant revenue line, but it has been done on the bases of cash injections and credit rather than profit, so even if Eats is a successful business line how will it be financed?

There are a lot of issues to be concerned about on this one.

BrokenArrows

listermint wrote: »

There is quite negative sentiment around the company. They are a shining example of a race to the bottom in terms of workers rights and or wages.

Based on the price of some uber journeys ive taken recently they are unbelievably racing to the bottom.

I live in London and took an uber late at night from the city to my house. About 50 minute drive. It cost £25. Super cheap.

The equivalent black cab in london would easily be £60+

crushproof

BrokenArrows wrote: »

Based on the price of some uber journeys ive taken recently they are unbelievably racing to the bottom.

I live in London and took an uber late at night from the city to my house. About 50 minute drive. It cost £25. Super cheap.

The equivalent black cab in london would easily be £60+

Christ how on earth are the drivers covering their costs with prices like that?! :eek:

RoRo979

Would large investors not be largely staying away considering that uber doesn't look like it will bode well in the long term, especially considering what Tesla said in its investor presentation.

BrokenArrows

Yes, long term manned taxi services are a failing industry.

The technology for completely automated cars is fast approaching. Id expect within the next 5 years for the first trials of driverless taxis to be released, with wider adoption in 10-15 years.

If Uber wants to migrate to driverless cars then they have a big problem. Who pays for the cars? Currently the uber drivers supply their own cars. Uber paying for their own cars is a massive outlay of money.

phantom_lord

If there's multiple providers of driverless cars you'd have to imagine the margins would be tiny too.

Del2005

BrokenArrows wrote: »

Yes, long term manned taxi services are a failing industry.

The technology for completely automated cars is fast approaching. Id expect within the next 5 years for the first trials of driverless taxis to be released, with wider adoption in 10-15 years.

If Uber wants to migrate to driverless cars then they have a big problem. Who pays for the cars? Currently the uber drivers supply their own cars. Uber paying for their own cars is a massive outlay of money.

When automous vehicles do take off it won't be Uber doing the driving it'll be a manufacturer or more likely a partner they have already partnered with. Why would a manufacturer give its profit to Uber, or any company, when their own business model has had to change? Because who will own/lease a vehicle when you don't drive it.

Bob Harris

When there were so many concerns about the business before the IPO it's hard to be surprised by the first couple of days trading. It will probably recover a bit if the general market does but I'd say this could be in the 20's soon enough.

RoRo979

phantom_lord wrote: »

If there's multiple providers of driverless cars you'd have to imagine the margins would be tiny too.

As with cars today I'm sure there will be economy and premium models. Although Tesla model 3 does seem quite premium with respect to the 30-40k price tag so you definitely could be spot on.

I think one of the biggest issues Uber will face is lack of data. Tesla is constantly refining its autonomous driving model with a constant stream of data from people driving the cars now, and thus is always getting better and better. Uber realistically would have to partner with a car manufacturing firm to leverage their car manufacturing economies of scale and autonomous driving technology, which would push its bottom line profit further into the red.

A good summary is the attached photo I saw representing a comment on FT blog.

phantom_lord

Tesla aren't the leaders in autonomous cars. Musk is talking out of his hat, Model 3s will never be robotaxis no matter how much data thru collect. They don't have the hardware capability.

It'll be someone like Waymo or GM.

AndrewJRenko

Worth a read; https://twitter.com/YcmiYcmiu/status/1062710541179895808

Thargor

Good thread (apart from the Zerohedge style certainty about the impending apocalypse). Interesting that 94% of their drivers quit within a year, there are gig economy jobs that border on sweatshop work that dont have that kind of turnover, losing billions a year will never be reversed anyway, they must be doomed...

rivegauche

The whole automotive industry is driven by suppliers like Magna, Bosch, Denso, Continental. They will develop all the components needed for a self-driving taxi. Magna would even built them for you if wanted.
The automated taxi will probably be a two or three seater quadricycle with a 20 to 30kw battery which goes no faster than about 50 to 60kmph and the service will ultimately be sold through price comparator sites.
A simple quadricycle type taxi will cost a four figure sum when bought in bulk and it only takes a few thousand of them to cover a city the size of Dublin; that is not a major barrier to entry.
I do not see Über being able to either control the market through technical unique selling point and once price comparator sites come along where suppliers bid for business in real time they can't charge a premium for brand recognition either.

Jim2007

So Uber reported a loss of about $1b in the first quarter... and kicked out a complex set of financial to explain it, or rather more to obscure it. But there are a couple of things in there that are difficult to obscure. Revenues increased for sure but at what cost... well the cash consumed by operations doubled.... as far as I can figure and I did not spend much time on it, it looks like a major part of that was paid out in various incentive programs in other words buying revenue rather than generating it out of natural growth....

The balance sheet is also an interesting document, especially the last block titled "Stockholders’ deficit" which show a negative equity of just over $7b - was the IPO a negative equity sale..... time will tell.