[aetherson]

Tremendous investment towards very uncertain results. Asia in particular -- what exactly is the point of investing in Asia? Uber got kicked out of China, and besides Japan, what other market is really worth investing in there for a company that constantly struggles with unit margins?

I think I agree that Lyft is the better opportunity right now to Uber based on valuations -- while Lyft is clearly the less valuable company, it's hard for me to believe that it's 10x less valuable. 5x? Sure. But that makes Lyft twice as good an opportunity as Uber.

Unfortunately, I think that both companies are most likely doomed. Uber almost certainly, Lyft maybe a little less certainly. There really isn't much sign that there's a $7B business in ride sharing, much less a $70B business.

[tuna-piano]

I did some quick math on GDP numbers by country, just making the very rough (and I'm sure incorrect) assumption that Uber will take a similar percent of each countries total spending.

I originally wanted to argue against you, by saying that Asia has some very large and fast growing non-China/Japan countries... but I'm not sure the data shows that. US+EU is $35T total GDP. The largest non-China/Japan Asian economies, India+Indonesia+South Korea+Taiwan+Thailand+Hong Kong+Phillipines+Malaysia is ~$7T[1]. Is it worth all the risk and effort to add only 20% of your potential business?

Maybe, and those countries do have higher GDP growth rates[2]. But given the small market sizes, difference in laws, and substantial local competitors (especially Grab), it doesn't seem like being in Asia should increase Uber's worth by a large multiple, relative to Lyft. That said, if being in Asia is responsible for 20% of Uber's valuation, that is still a gigantic $14B, larger than many fortune 500 companies.

[1]-https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

[2] https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_...

[edwinnathaniel]

There are probably a few large markets in Asia: China, India, and Indonesia. The rest don't have as many human beings as these 3 countries.

Both Go-Jek (Indonesia) and Grab have raised huge capital in the last 5 years or so.

Go-Jek seems to be the leader in Indonesia as they've also expanded their capability to food delivery, document delivery, payment gateway, etc (they're becoming more like WeChat minus the chatting/social network aspect)

I have my doubt that Uber in Indonesian will provide significant return to HQ. Uber currently is in 3rd place after Go-Jek and Grab.

[shalmanese]

Just going by GDP is misleading. Asia has far higher population densities and lower rates of personal car ownership. As those countries grow, there's a real chance for a substantial part of the new middle class to only have ever experienced ride sharing coupled with public transit as opposed to buying their own vehicle.

[pisarzp]

I beg to differ here. Once you get the scale like Uber, and you don't have to spend billions on marketing, this is a very high margin business.

Minimal costs to maintain infrastructure and 20% cut on millions of ride's a day.

The only reason Uber was struggling is because it wanted total global domination. It was a land grab, and they played it quite well. Failed in China, but succeeded in quite large portion of the globe.

[aetherson]

This is a very 2015-era comment. We've seen a lot of evidence over the last year-and-a-half that it's just not true that Uber's only expenditures are on expansion.

I think that this is the reality:

1. There are lots of reasons why customers may not take an Uber. They could take a Lyft, they could take their own car, they could take public transportation, they could take a taxi, and they could in many cases just not go out or substitute a closer destination.

2. Uber achieves high ride volumes in the face of #1 by heavily subsidizing both drivers and passengers, even in the case of relatively mature markets. This drives their profit margins down to extremely thin levels, or in fact negative.

3. Their proposed technological solutions to their margin problem have either not been broadly popular (Uber Pool) or have major roadblocks to even existing (self-driving cars).

4. Their proposed business model solution to their margin problem (being a logistics company) have the problem that nobody wants to be their customer.

5. All of the above are true even in the developed world, where a ride might average $15 and Uber's cut before subsidies might average $3. All of their expansion opportunities now (and in the last few couple of years) are in areas where a ride might average $5 and Uber's cut before subsidies might average $1 (or worse), making it harder and harder to recover the relatively fixed costs of expansion.

6. There is obviously a profitable business in being a taxi company. It's just not a $70B business, and indeed I'm not sure it's a $7B business.

[pyromine]

My only Uber pool experience was when in San Francisco the whole group I was with would all request an uber pool for two people and the people who didn't get the same driver would quit. We accordingly were using it to get cheaper rides that was the exact same experience as a normal uber