Author Topic: Uber filing for IPO  (Read 2318 times)


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Re: Uber filing for IPO
« Reply #20 on: April 14, 2019, 08:41:16 PM »
I live in NYC.  uber is about the same price as taxis. if there are taxis on road, of course they are better.  you hail them and you are in them. with uber, you wait, and then it gets diverted when you think it is coming to you, and you wait, and then he is down the road and the app says he is there etc. only better than taxis when taxis are not on road.

then there was the time my uber account was hacked.

when will uber be profitable?  I'd say 1999...


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Re: Uber filing for IPO
« Reply #21 on: April 14, 2019, 11:48:43 PM »
Lyft and Uber could frankly be priced at parity with taxis and I would still go with them every time. They offer a better service, so even at pricing parity I'm getting a better value.

I would push back on this from two sides:

1. You could argue about "better service" as defined by ease of calling Lyft/Uber vs. calling taxi. This is mostly US phenomenon though. In a lot of countries there are taxi apps/etc. that offer the same convenience. Also, I'm not really pro-taxi person, but security/quality of cars/drivers is arguably better in taxis. Of course, I've got recency bias of using Uber/Lyft mostly, but I've had pretty scary and pretty lousy drivers. And I gave them all 5 stars since OTOH you don't want to kill poor person trying to make a living with bad reviews. If taxi service had Japanese/Finnish car quality/driver professionalism and charged the same as Uber/Lyft, I'd take taxi all the time period.

2. Regarding raising prices 30-35% and not losing riders: currently Uber/Lyft is somewhat competitive with driving to destination, parking in paid parking and driving back, so I may take Uber/Lyft instead of driving and parking. With 30-35% raise, this use case economics are killed completely.

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Re: Uber filing for IPO
« Reply #22 on: April 15, 2019, 06:27:27 AM »
When it comes to seeing this company could be a real business, i.e. generate free cash, they have shown some operating leverage in their business over the last few years. The losses have more or less stayed flat as the revenue rose.

Dara already reined in G&A expenses in 2018 somewhat (they actually declined 10%), so its clear 1) that the company was spending like a drunken sailor prior to his arrival, and 2) he understands G&A can't be 25% of sales in a 50% + GM business.

I still have a very hard time justifying a $100+ billion valuation, but I can get to $2 billion in operating profit in about 4 years assuming most expenses as a % of sales continue their decline. For perspective, over 2016-2018 Ops and Support fell from 23% to 13% of sales, Sales and Marketing fell from 41.5% to 28%, R&D fell from 23% to 13%, and G&A fell from 26% to 19%.  So it is pretty reasonable to expect that trend to continue.

Additionally, I don't have all the details on their equity stakes in other companies, notably Didi Chuxing, but they made a sell their China operations in exchange for an 18% stake in Didi, which according to some sources was valued at $65 billion in 2018 ($11.7 billion attributable to Uber). At a 50% haircut to get closer to a reasonable valuation, that stake alone is worth $6 billion.

I'm no bull on Uber, but it's a real enough business to analyze, and it certainly doesn't lose money on every ride as some have suggested.