Can you be more specific? Their self-driving tech is worth $70B?
If it's the combination, then I still don't quite get it. Wouldn't any good self-driving tech pretty easily adapt to ride hailing?
Let's say it's a best case for Uber: there are only few self-driving techs out there, and Uber is one; and they dominate ride hailing, and start turning a profit. Couldn't another self-driving tech company snap up Lyft and bundle in the ride hailing, too?
I think a lot of people see todays taxi company being tomorrows ground transport ruler, once self driving cars are ubiquitous.
The theory being less people will own cars. The savings made on storage/parking, fuel and maintenance will be greater than paying for individual rides (with no labour costs).
The car manufactures would no longer be the company the consumer interact with. i.e. How much does the average consumer care if they are picked up in a Lexus or a Toyota for the average ride?
This would put the car manufacturers in competition for the taxi companies business commoditizing the car industry.
Who knows what will happen? Maybe regulation will prevent self driving cars becoming ubiquitous? or maybe some advance in manufacturing makes it much cheaper to own self driving cars.
But speculation that Uber pulls this off is the only way that I can see how Uber is worth over $60Bn (more than ford $50Bn ish, GM $50Bn ish, Nissian $45Bn ish) while making a $0.8Bn loss on $1.7Bn revenue - as a gamble for what might end up owning a $400Bn+ market.
It seems like self driving cars would reduce the importance of the network effect and make the barrier to entry a capital one (cost of the fleet).
I'd like to see how much utilization the drivers in a typical market are getting. In order for the self-driving fleet-ownership model of future-uber to work, I think the vehicle utilization would need to be relatively high to make it economically competitive with car owning.
It also occurs to me that ride-hailing may not be a good substitute for those who use a car to commute. $70B starts to look awfully high if most people still need to own a car to get to work....
If Google and Tesla get self driving cars too, don't network effects suddenly disappear? The ebay analogy stops holding since the "sellers" (drivers) are a pool of self driving cars.
The headline figure is net of driver costs. They had a revenue of $1.7b, and a loss of $800m, after paying their drivers. Doesn't that mean that if the cost of the drivers was $0 they'd still have made this loss?
self driving cars will bring Uber into the black, but it'll make competing with them so much easier, since signing up self-driving fleets will be way easier than signing up individual drivers.
