Author Topic: Uber filing for IPO  (Read 6194 times)

cherzeca

  • Hero Member
  • *****
  • Posts: 1959
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...


Jurgis

  • Hero Member
  • *****
  • Posts: 4441
    • Porfolio
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.

"Before you can be rich, you must be poor." - Nef Anyo
--------------------------------------------------------------------
"American History X", "Milk", "The Insider", "Dirty Money", "LBJ"

Broeb22

  • Full Member
  • ***
  • Posts: 166
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.

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11157
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
Re: Uber filing for IPO
« Reply #23 on: April 22, 2019, 04:45:30 PM »
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3508
Re: Uber filing for IPO
« Reply #24 on: April 22, 2019, 05:38:55 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.



You should rate honestly and provide feedback. I think if you leave one star (or maybe 2 or lower), you won't ever be matched with that driver again. Yes, I know the chances is tiny to be rematched with same driver but it does happen if you use the service a lot. Some drivers won't care about the ratings but if I see a driver with like 4.7 and below ratings, I might cancel and try to get another driver since I know the the driver has had some issues (could be driving skills or older/smelly car).

From my experiences in SF area and NYC, the Ubers/Lyfts are usually newer and cleaner than taxis... Don't get me started on NYC taxi drivers, they are constantly on the phone and driving like maniacs.


I've given about 100 rides on Uber and Lyft as a driver and used their services as a customer a few hundred times.

« Last Edit: April 22, 2019, 06:00:22 PM by fareastwarriors »

SHDL

  • Sr. Member
  • ****
  • Posts: 335
Re: Uber filing for IPO
« Reply #25 on: April 23, 2019, 09:50:42 AM »
Apparently Didi, which dominates the Chinese ride sharing market with something like a 90% market share, is still losing money:

https://www.wsj.com/articles/didi-dominates-ride-hailing-in-china-but-still-loses-money-on-each-trip-11556021083?mod=hp_lista_pos4

Some quotes from the article:

Quote
“This situation is not sustainable in the long run. Otherwise one day we wouldn’t be able to continue normal operations because we will have run out of funding,” [Mr. Chen] said. However, he added: “In the current reality, these losses are a normal phenomenon for all in the ride-hailing industry.”

Mr. Chen said Didi has been working to improve management efficiency from the end of last year. He referred to Didi’s plan to optimize workers and its move to cut back on operational spending. Didi plans to lay off about 2,000 employees this year.

So a near monopolist is struggling.  That says a lot about the industry.

« Last Edit: April 23, 2019, 10:19:04 AM by SHDL »

Liberty

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 11157
  • twitter.com/libertyRPF
    • twitter.com/libertyRPF
"Most haystacks don't even have a needle." |  I'm on Twitter  | This podcast episode is a must-listen

Spekulatius

  • Hero Member
  • *****
  • Posts: 2799
Re: Uber filing for IPO
« Reply #27 on: May 09, 2019, 04:58:20 PM »
Anybody try to get some shares? It’s priced at the low end at $45 to make sure, the shares fly of the shelves. Should be good for an IPO pop, imo.
To be a realist, one has to believe in miracles.

ukvalueinvestment

  • Full Member
  • ***
  • Posts: 244
Re: Uber filing for IPO
« Reply #28 on: May 10, 2019, 03:06:49 AM »
Anybody try to get some shares? It’s priced at the low end at $45 to make sure, the shares fly of the shelves. Should be good for an IPO pop, imo.

Is this Value Investing?

I can't see that Uber will ever be profitable.  The taxi business is one of the most political there is, full of vested interests in terms of taxi drivers and Unions, and the line that the drivers are "self employed" just won't fly with many politicians in Europe in particular.  Take London, for example, where Uber tried for a few years to bully the elected Mayor of a city of 9 million!

Also, I don't think the network effect and moat is as big as people think.  Take where I live - Cambridge, UK.  There is a local taxi company that has been in Cambridge forever, they don't tactically break local laws and they pay more than Uber.  Cambridge is a prosperous city, one where cab rides are occasional or for business people.  Cost isn't such a factor.  And the local company has an app, so I can call them just as easily as an Uber.

@ukvalueinv

writser

  • Hero Member
  • *****
  • Posts: 1809
Re: Uber filing for IPO
« Reply #29 on: May 10, 2019, 05:21:29 AM »
Anybody try to get some shares? It’s priced at the low end at $45 to make sure, the shares fly of the shelves. Should be good for an IPO pop, imo.

Is this Value Investing?

Who cares if it is "Value Investing". Value investing is just a means to an end. I'd draw nice colored graphs and candlesticks all day long if that would make more money. The correct question is: is it profitable? And I wouldn't be surprised if subscribing to the Uber IPO and selling at the open is +EV.

FWIW has anybody ever tried this at IB? They do have an "IPO Subscriptions" page in account management but I've never actually seen an IPO there. Looks like the Uber IPO was available at TDAmeritrade. But I don't even know if it is possible for non-residents of the US to subscribe to IPO's at all actually. Something to look into maybe.
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.