There is always an "Uber is dead" sentiment floating around when losses come out, but I don't buy it. The long term on-demand transportation opportunity is absolutely massive. Uber has tried to win the land grab and "outlast" everybody with obviously unsustainable subsidies, and maybe that didn't exactly work out. But if the economics don't work for Uber, they won't work for anybody else at scale either. Consumers are benefitting as the industry is subsidized, but it won't last. As with most mature industries, there will eventually be 2-3 players that stay alive, and eventually become profitable. Uber, Lyft, Waymo, Tesla? I don't know, it will be interesting to see. But just because the economics are bad today doesn't mean they always will be. I wouldn't count them out.
The business model appears to be to get established and then use a combination of network effects and monopolistic pricing techniques to be profitable. The problem is though, you need to establish yourself as the dominant player, and jack up prices to start being profitable. That's a fine business strategy. The problem is that Uber has an outside clock ticking. The first player to economically produce a fleet of self-driving cars is likely to undercut Uber on price so violently that Uber's business model goes up in smoke pretty quick.
So either Uber wins the race to autonomous vehicles (which I think most people now regard as unlikely) or they have a hard limit on when their profitability is going to go away. So the valuation needs to reflect something along the lines of "How much money can uber make between now and 2025" and every year that goes by without profit, is a year towards the day that uber's business model goes poof!
> But if the economics don't work for Uber, they won't work for anybody else at scale either.
Uber has no other profit center to prop it up. Everyone else has profitable businesses to lean on (Tesla, Waymo) or corporate backing (Lyft through GM) until they get to the finish line.
If you bet on Uber as an investment, you bet on the wrong horse.
I post Uber news because I'm fascinated by the death spiral. It is literally a dumpster fire of investor money investors continue to pour money into with no hope of ever seeing a return. It's illogical! I mention Uber being terrible when I do because their actions have been legitimately illegal and immoral. I have a strong moral compass, and abhor the abuse of both workers and customers perpetuated by Uber.
Do I feel bad for Uber employees who have worthless options or exercised stock? Unfortunately not. Do I think they'll ever reach any semblance of vehicle autonomy before they exhaust their runway? I think it's overwhelmingly clear that isn't the case.
