Thoughts on Uber
$UBER reported and yes, it is impressive.
The business is finally showing the kind of financial strength that long term investors have been waiting for. Revenue is growing steadily and free cash flow came in strong again and the company is buying back shares. After years of operating losses and investor skepticism, $UBER looks like a real business now. And the valuation is not demanding like for example $SHOP. For a platform with this much global scale and network density, the stock is not “expensive”.
But none of that changes the bigger question. What happens to $UBER over the next 10 years?
Most people would agree that the majority of rides on $UBER today are not going to be driven by humans in the future. Autonomous vehicles are coming. Slowly at first, then rapidly. Whether it is $TSLA, $GOOG Waymo, or someone else, driverless fleets will eventually scale across major cities and countries. And when they do, the core economics of ride hailing will change forever.
$UBER says it will aggregate demand across all these providers. And maybe it will. The app still has like ~150 million monthly active users and a lot of people rely on it daily. But what advantage does $UBER really have once cars drive themselves?
There is no proprietary technology. No exclusive access to vehicles. No physical infrastructure. Just an app that dispatches rides. In a world where every major car company and tech firm is deploying autonomous fleets directly, the only thing $UBER controls is the demand side. That sounds powerful in theory, but in practice (at least imho), it is fragile.
Because eventually you compete on price. You are no longer the only way to get a car quickly. You are one of many. And if robotaxi rides are cheaper, faster, and easier to get through native apps or local fleets, then the power of $UBER platform fades.
The stock looks good today and the business is executing well. But the long term risk is real. $UBER has won the “human driven” phase of ride hailing. That is not the phase that matters most anymore.
Yes, $UBER has a lot of partnerships and it’s making investments in various companies and trying to stay close to where the future is headed. And maybe they will figure it out and end up dominating the next phase of transportation. But for me, it just goes into the too hard pile.
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