First, Uber’s CEO just resigned.

Second, there’s an NYT (usually just lies and wrong but not quite always) with

“Bill Gurley Is Leaving Uber’s Board”

Bill, why’d it take you so long? Uh, Bill, why’d you join that board and, likely, make an investment in the first place?

Uh, Bill, wanna make up the loss — I predict a big loss!

Bill, Bill, Bill, a TAXI CAB company? Where does Silicon Valley get that really strong funny stuff it’s been smoking? Someone out there is passing out free money?

High margin business? Nope.

A business based mostly on information tech and can use that tech to lower costs and provide better results? Nope, not really. Bill, there’s been a LOT of work in optimization for dial-a-ride services. Bottom line: Mostly it doesn’t optimize. Uh, I had an opportunity to work on dial-a-ride optimization, guessed it would be a mess, looked into it to be sure, found that it really is a mess; and picked a different problem. The problem I picked, in stochastic optimal control (but don’t hope for help even from that for dial-a-ride or such things), was good, and I did well with it. Bill, part of success is good problem selection. When I saw dial-a-ride, it looked like bad problem selection to me. Bill, you need a tutorial on problem selection. Where you blew it, I did well, long ago. I was right then and am still right.

Buffett moat? Nope.

Bill, you might notice, no one, and I mean no one, ever takes a taxi cab from NYC to SF, or, really, on any long trips. Soooooo, Bill, sit down, listen up: The taxi cab business is a local business. That means it can be attacked locally. If Uber is in 100 cities, then they can face 100 different competitors. So, a big, all US or all world Uber, could have a valuable brand name? Not a chance. So, that Uber is big does not, never will, give them an effective brand name — instead the locals will decide for themselves what local brand they like; that might be Uber, but likely not.

Is Uber labor intensive? Yup.

Does Uber have legal problems, a struggle, different in every city? Yup.

Will Uber be a unionization target? Maybe.

And you actually invested in Uber?????

I know; I know: “No guts, no blue chips.” But there’s also: “A fool and his money are soon parted.” And when you were at the Uber BoD meetings, looked around the room, and wondered who the suckers were, well, one of them was you!

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Interesting view. No Uber IPO ever?

BRC
http://www.themusingsofthebigredcar.com

There won’t be an Uber IPO. Ever.

IIRC, Uber loses money; the VCs keep sending cash, and Uber keeps losing it.

Soon the VCs will quit sending cash at anything like the $70 billion pre-money evaluation. TK will be gone.

For more cash, there may be a really down, down, way, way down hated “down round” with a pre-money evaluation in the $1 B range — that is, instead of $70 billion. That’s right: We’re talking a paper lost of $69 billion.

The position of the investor community will be, Uber must MUST actually make actual money like right away or the VCs, any other investors, the BOD will just shut it down.

Uh, what business is Uber in? The taxicab business you say? And what’s their big advantage, barrier to entry? A little bit of mobile device software you say, software easily duplicated, equaled, or improved on?

But, Uber will be saved by self driving cars, I mean, autonomous cars with no driver at all, and it will be saved by the magic of artificial intelligence and machine learning, you say? Where’d BRC get that really strong funny stuff he’s been smoking?

http://themusingsofthebigredcar.com/uber-meltdown/

Uber, ahh, Uber!

BRC
http://www.themusingsofthebigredcar.com