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Comment by chollida1 | Hacker News Reader

I posted this a while ago

    https://news.ycombinator.com/item?id=14317214#14317443

> 1) Drop self driving cars completely. YOu aren't getting there first, second, or anywhere close to third, just partner with a car company and call it a day.

> 2) Settle Google's lawsuit, hopefully 1 will help

> 3) Hire a new CEO, Sheryl Sandberg is almost certainly not available but someone who can show that change will and is happening internally.

They've completed 2 of the 3 things I thought they needed to go public. Dropping their own self driving car program was the third.

They need to have their story figured out when they go public as investors will want to know if they are all in or all out on developing their own self driving cars.

I can't see them going public with their current strategy for self driving cars, its a huge money pit with not much to show for it currently.

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Well their huge valuation hinges upon them eventually going into self-driving cars. It'd otherwise be hard to justify a $120billion IPO without rapid growth targets. They've already reached saturation points in most of the important metros and cities.

Do they need to develop the technology themselves? So long as their cars don’t have drivers, they’re fine, no? Or is the issue that nobody would share with them?

Uber probably views it as important that they develop the self-driving tech because otherwise (if someone else develops it, licenses it to OEMs, and then Uber uses those cars), there's no lock-in to the Uber ecosystem. Either those OEMs will partner with Uber for a fee that will capture most of the profit Uber's valuation currently expects, the OEMs simply spin up their own Uber-style vehicle on demand program (far cheaper than Uber spinning up a car company), or people who can afford their own vehicles (likely a huge chunk of Uber's pool of users currently) just use their own now-autonomous vehicle a la carte, summoning it when they need a ride.

In a pretty ironic twist, Uber et al have already started rumblings about how the third option needs to be made illegal, because there's no regulatory oversight on vehicle maintenance and safety. Having spent most of their life ignoring existing regulations, they soon may need them to survive.

Couldn’t the lock-in be the Network of riders?

Uber needs self-driving tech to be cheap and available.

In the long run this seems likely, but in the short term Waymo seems to be gearing up to start their own app, and if they have a cost advantage over Uber, Uber will be burning even more cash subsidizing rides waiting for self-driving tech to become a commodity.

At that point, why invest in Uber?

The problem is they need a story like self-driving cars to maintain the (inflated) valuation long enough for existing investors to get out. Taxi rides alone are not nearly enough.

I think they are aware that they don't have a chance at it long-term. A partnership isn't as sexy, but might be enough to eek out a $50B valuation.

The problem is they need a story like self-driving cars to maintain the (inflated) valuation long enough for existing investors to get out. Taxi rides alone are not nearly enough.

Exactly. Uber still loses money on every ride.[1] They can't fix the losses without raising prices, which would lose their competitive edge. They've squeezed the drivers as hard as they can, and the drivers are pushing back successfully at last.[2] So Uber needs something they can hype. They already tried "China", and failed. "Self-driving" was next. That's not working out. Uber is getting into bike/scooter rental and food delivery, which are already crowded, low-margin industries.

Self-driving didn't need to work, it just had to be hyped for investors.

[1] http://fortune.com/2018/08/15/travis-kalanick-uber-still-pos... [2] http://fortune.com/2018/08/08/new-york-freeze-ride-sharing-v...

>Exactly. Uber still loses money on every ride.

Please stop repeating this, or at least find a source that supports it. There's a big difference between "losing money in the aggregate" and losing money on each ride; the latter is only true if the marginal costs of providing each ride are greater than the revenues from it, and the source in [1] only reports the former kind of loss. It's very unlikely that each ride is actually costing them the ~$4 they take from it; that would be some pretty inefficient IT.

find a source that supports it.

[1] https://news.crunchbase.com/news/understanding-uber-loses-mo...

[2] https://www.cbsnews.com/news/uber-valued-at-62-billion-still...

Those just repeat the original source, which (uncontroversially) says they lose money in the aggregate. Total operating costs minus total revenues is positive.

None of them claim, as you did, and as I asked for, that each ride loses them money. The closest they Come is saying that some rides can lose money because of the formula.

Do you understand the difference between “lose money on each ride” and “lose money overall”? All of your links only speak to the latter, not the former, and the former is what I was objecting to.

I think autonomy is existential for Uber, but I also think they have a decade or so before it will start having a deleterious impact on their bottom line.

My thesis is that they shouldn't shudder ATG entirely, but should scale it back to a core group, and then consider dropping the dead weight and scaling it back up again slowly as certain performance milestones are met, meanwhile keeping a patient eye out for promising startups worthy of mid-stage investments sizeable enough to grant them an significant ownership stake.

*shutter

>The problem is they need a story like self-driving cars to maintain the (inflated) valuation long enough for existing investors to get out. Taxi rides alone are not nearly enough.

This is pretty much it. Making an Uber clone is absolutely trivial, and they are being outcompeted in every single international market which has one. They also have zero customer loyalty, people will happily switch to another app the moment there is competition.

It seems like it would be difficult to clone their terrible GPS usage and mapping. Most drivers use Google maps in my experience.

And now with Uber express pool it is pretty much guaranteed it will tell you the wrong location. If it says northeast corner, just go to the south west corner.

> Making an Uber clone is absolutely trivial

Maybe so but cloning Uber is absolutely not trivial.

I love your naive hero worship. Suddenly you get Sheryl Sandberg on and all your problems are solved. Hint: Sandberg is not magician and not even that competent all rounder or polymath. She was recruited in FB because she precisely knew how ad business works and brought huge network of big players in this space with her. In a way its backstabbing to your previous employer but well who cares. Another thing to think about: Its almost exactly 10 years since Sandberg is at FB and its still one trick pony. In fact, much worse than one trick pony that Google is.

> she precisely knew how ad business works and brought huge network of big players in this space with her. In a way its backstabbing to your previous employer but well who cares.

How is this backstabbing? Nobody is owned by their employer for life. People change jobs and bring customers with them to their new employer in all types of industries.

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