[fidotron]

What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have.

The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to Google.

One of the best get rich startup models today is to create something where it looks like you'll take away the core raison d'etre of another entrenched service, and it will radically inflate your value.

[paganel]

> The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook.

I know it's anecdotal, but the thing that makes WhatsApp so great for me it's that "it just works". I have it installed on my iPhone 4, and compared to Facebook's app is hundreds of miles ahead. Until 6-months or so ago the FB app needed 2-3 or minutes to actually open and redirect me to the private messages window, after I had received a notification. In one case it took 5 minutes (or even more) for the messages I was writing in the FB app to reach the person I was talking to, making for a very awkward conversation. And forget about trying to send images. In the meantime they decided to force the use the Facebook Messenger app, which cannot be installed on my phone's OS. I'm probably supposed to buy a new, expensive phone, which I would have if apps like WhatsApp hadn't existed.

[k-mcgrady]

It sounds like your issue was a slow phone. Facebook's Messenger app works great for me. I also use Whatsapp daily but prefer the Facebook app. It's a much nicer experience.

[paganel]

Yeah, it's slow because it's "old" (3-year old). The thing is that it is slow only when trying to use the FB app, the browser, WhatsApp and GMaps all work pretty well.

[XorNot]

I'm indifferent. But when WhatsApp asks me for money, I suspect I'll just start using Facebook Messenger or Google Hangouts instead.

[boyaka]

I'm sure they get plenty of money from entities interested in monitoring communications.

[smt88]

I disagree with your premises as well as your argument.

WhatsApp, Instagram, and SnapChat are valuable because they have users. There are a million ways to monetize users once you have them, but it's hard to get them. Google, Facebook, and others are large, humming machines that squeeze money out of users, but WhatsApp, Instagram, and SnapChat are not. The latter three companies are valuable because they can be fed into the larger machines that already figured out how to monetize.

Unrelated: Uber certainly is a threat to a lot of companies (USPS, Zifty, DHL), but I can't see the Google connection. In fact, Uber and Google recently became partners.

If anything, Google is a massive, existential threat to Uber because it's working to perfect self-driving cars.

[zyx321]

How in the world would Uber threaten the United States Postal Service or Deutsche Post?

Even if that's a typo and you meant United Parcel Service (UPS), even if we examine DHL independent of its parent company, they are heavily invested in international freight and supply chain management. I see no great benefits there from the ability to summon a cargo plane on a whim with your phone, nor from handing it off to someone with no formal training/license/qualifications.

[acconrad]

Because Uber could eventually become a cheaper, easier, crowd-sourced version of "the last mile"[1]. This is a huge threat to the thousands of DHL and UPS delivery folk who make a living shipping parcels in the Last Mile, and to the businesses they belong, which make most of their delivery fees via the Last Mile. Unless Uber (or companies like Shyp) partner with them, it could bring these old business models down.

[1] = https://en.wikipedia.org/wiki/Last_mile_(transport)

[JeremyNT]

I have difficulty imagining any way Uber can compete with an entrenched last mile provider on cost. What possible economic advantage would individuals have in parcel delivery versus an entrenched provider? UPS has massive benefits from economies of scale in terms of route density / fleet maintenance / fuel costs / etc etc, which no individual vehicle operator will ever be able to compete with.

Sure, an Uber driver could charge less for labor, but given that the cost of operating their vehicle will inevitably be more expensive per delivery I expect there is probably no price point at which they can realistically compete.

Perhaps Uber drivers have a path forward in niche delivery services: food, very time sensitive deliveries, rerouted deliveries, etc. But in those areas they will need to compete on quality, and the market for more expensive, higher quality deliveries (while possibly extant) cannot be large enough to represent an existential threat to a company the size as UPS.

Beyond this, I'm curious as to whether it's even in UPS's best interest to continue to service the last mile.

Both UPS[0] and FedEx[1] already have services wherein they partner with the USPS specifically to avoid servicing the last mile. Outsourcing to better/cheaper/more efficient last mile service providers might eliminate a lot of UPS employees and revenue, but the last mile is incredibly expensive to operate. Is the last mile service really a major source of profits when compared to their highly efficient long distance operations?

[0] http://www.ups.com/content/us/en/resources/track/sp_definiti...

[1] http://www.fedex.com/us/smart-post/index.html

[makomk]

There's already a cheaper crowd-sourced version of "the last mile" here in the UK. They're called Yodel (formerly the Home Delivery Network), most of their packages are delivered by non-employees using their own cars, lots of big companies like Amazon use them, and they have a really terrible reputation.

[smt88]

We have LaserShip in the US, and they're also terrible (but not crowdsourced).

[bhouston]

All self-driving cars are a threat to Uber, but it will be a really long time for fully self-driving cars to reach significant penetration, as much as I love them. I think for the next 10 years we will be in the era of smart assisted driving.

[smt88]

1) I actually think self-driving cars are moving faster than expected. Ten years is still a pretty reasonable guess, considering the pace of governments and the auto industry, but we're closer than I thought we'd be by now.

2) Uber will use self-driving cars, probably exclusively as soon as it's legal.

Uber wants to be the internet of the physical world. With the internet, information could travel anywhere with the tap of a finger. Uber wants the same reduction of friction for objects and people.

The problem for Uber is it's already easy to poach drivers from Uber. Drivers don't care if they drive for Lyft or Uber because the payouts are pretty similar. I've met drivers who switched between both.

When cars drive themselves, Uber will have to become even more competitive to stay on top. The cost of building an Uber-like fleet will be no more than buying the hardware.

Remember how hosting companies proliferated in the 90s and early 00s? Until AWS and similar PaaS options, the hosting space was incredibly fragmented, and the margins were awful. That's what Uber has on the horizon.

[marcus_holmes]

Cool thought, that the Last Mile will soon be commodity-priced and driverless cars will be making deliveries when they're not otherwise occupied. Software eating yet another business.

Providing capital to build a replica of an existing proven business model is easy, you already provided the example: gajillions of hosting companies providing physical hardware for peanuts because a few people had proved the business model worked. The cost of the hardware is amortised over its expected lifetime and any bank will provide the loan.

If this is Uber's future then Travis must be looking to exit before that...

[mncolinlee]

In the long run, I'm going to suggest Uber is worth very little at all. We're probably ten years away from the first self-driving cab company. It won't be long before electric drive cabs can self-drive themselves to an induction charger, full service car wash, or maintenance shop where the owner has a contract. If the car gets stuck, it can call roadside assistance. There will be no reason to own an office anymore. One can probably even get by without renting a parking space.

The software features which make Uber and Lyft a unique experience will eventually become commoditized.

What happens to companies like Uber when the barriers to entry are so low that margins are non-existent?

[danielki]

I wouldn't be surprised if Google acquired Uber or Lyft within the next few years. The massive amount of data one of those companies can provide would beneficial enough to Google to justify the purchase - mapping data for Google maps, traffic data for Google Now/Maps, detailed driving data for the self-driving car project, information about where specific users go (targeted ads, Now, etc), and more.

Additionally, Google's self-driving car technology that it's developing would be best-suited to something like Uber or Lyft. The self-driving car is (at least at first) much better for an on-demand usage model, rather than an ownership model.

[ldng]

> The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook.

I disagree. The real reason were that part of their userbase was using Whatsapp on feature phone. It was as much a tech acquisition as a userbase acquisition. To get to the point Whatsapp was Facebook would have had to, develop the tech _and_ attract the users. In the end, buy whatsapp was faster, less risky (no guaranty they would have been abble to steal/convert the whole Whatsapp userbase) and probably cheaper.

[sergiosgc]

Maybe this is the right place to ask something that really confuses me: Why hasn't anyone really challenged Google at their core business (Adsense/Adwords)?

For all the menacing Whatsapp can pose to FB, advertisement is a much larger market, with a clear path to profitability. The problem is not simple, but not outlandish either.

Yet, candidates such as Bing and, at one time, Yahoo, continuously fail to properly serve this market.

[eru]

Interesting. How will Uber be a threat to Google?