The Disruption of Uber

New / Eng
jesus.cpp

New Eng

PRE
Uber, Amazon
jesus.cppmore
May 19, 2018 67 Comments

There have been lots of threads around pros/cons of Uber. After this post I am signing out for good.

To win the future of ride sharing requires:
1) consumer brand and trust
2) L5 autonomy
3) operations expertise with physical assets

Google has 1 and (soon) 2. They will have to develop/acquire/partner for 3. My guess is that they either partner or acquire. They have already made investment to get an inside track. I am not convinced Lyft is the right acquisition as Lyft doesn’t have physical operations expertise.

Amazon has 1 and 3 and are world class in both. If you are following Amazon, they have been working on 2 for years, but not shared much publicly. Autonomy will be important as they are also one of the largest players in logistics.

Uber has 1. And would need to develop/acquire/partner for 2 or 3. The failed acquisition of Otto set the company back about 2 years. AL was a total mess. Also, don’t underestimate the complexity of owning and managing a fleet of cars.

I talked through with TK. He agreed and I decided to leave because I didn’t want to invest any more of my time in Uber given the odds.

The senior team knows this which is why so many top people are choosing not to re-up. This is unnatural for a company that is supposedly heading to a world class IPO. It is also why they are having a hard time filling top positions (notably CFO).

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TOP 67 Comments
  • Twitter Onceaday
    This is why Uber and Lyft RSUs should be counted as a grain of salt when calculating TC. You never know when these companies will IPO if they even IPO or get bought out. You could end up holding a bag of paper shares worth nothing after 4 years of hard work. In that 4 years of time you could have made a million dollars working at a FANGT company.
    May 19, 2018 9
    • Uber / Eng frys
      Did you really just add a T to FANG 🤦‍♂️
      May 19, 2018
    • Amazon / Eng
      Hooliganss

      Amazon Eng

      BIO
      AWS
      Hooliganssmore
      FANGT lol
      May 19, 2018
    • Amazon Nineball
      When I switch companies I’m gonna add the first initial at the end of FANG too. Lol.
      May 19, 2018
    • Uber / Eng
      Rqwx5o

      Uber Eng

      PRE
      Google
      Rqwx5omore
      FANGUT
      May 19, 2018
    • Twitter Onceaday
      To add uber we can rename it: F A G N U T
      May 19, 2018
    • Uber / Eng
      Rqwx5o

      Uber Eng

      PRE
      Google
      Rqwx5omore
      Just drop the N. It's cleaner
      May 19, 2018
    • Amazon numsSize
      FANTA
      May 20, 2018
    • Uber spidy8
      Interesting this is coming from a Twitter personnel, who has seen the shares of Twitter in the toilet. Twitter should be thankful to Donald Trump without Twitter stock would be probably $12-14 max.
      May 21, 2018
    • Lyft examazon
      MTGA
      Jun 1, 2018
  • Uber BBJones
    1. L5 is at least 3-5 years away.
    2. By then most Uber employees are long since cashed out so you are not talking to people who give a crap about predicting the market 5 years from now. However...
    3. Uber has extensive GLOBAL data (even from markets it exited) that is highly valuable. Nobody else in the world does.
    4. Amazon move incredibly slow. Amazon Go was in development while I was there 8 years ago and all that does is remove a cashier - L5 autonomy is a whole different thing.
    5. Waymo cannot build their own ride sharing network based off autonomous only. That’s 10-15 years out. They have to acquire or partner. Lyft simply does not offer them the scale a major acquisition should. Waymo acquiring Uber is far more likely OR even more so using the Uber platform.

    I also believe Uber has tons of brand and trust. Outside of Bay Area nobody listens to the anti Uber nonsense.

    Finally, you are forgetting that Uber is becoming the most diversified transportation platform. This offers even more insight than other competition will have.
    May 19, 2018 4
    • New / Eng
      rapER

      New Eng

      PRE
      Uber, Amazon
      rapERmore
      Diversification won’t save you. That’s just saying, “sure we are about to get our ass kicked in football, but did you know we just started a curling team.”
      May 20, 2018
    • Amazon / Eng RCMMT
      Waymo is already driving driverless cars in Phoenix and has agreed to purchase 20000 cars :
      https://arstechnica.com/cars/2018/03/a-cab-ride-in-a-jaguar-waymo-will-go-classy-for-20000-electric-robotaxis/

      99% of the market can be satisfied by l4 so it doesn't really matter that l5 is that far off
      May 20, 2018
    • Uber BBJones
      Those same purchase stories exist about Uber too (not saying they are true or false). Uber doesn’t have to satisfy all of its driverless a missions with its own tech. It’s a platform and as long as the cost barrier to entry isn’t exaggerated (like it would be if ONLY Waymo develops L4/5 tech) then there is no reason to restrict the platform to our own driverless tech.

      I don’t think this is a single player market and I don’t think Waymo will dominate even if it beats everyone else to market by a year
      May 20, 2018
    • Uber / Eng xhnmkf
      Rolling out driverless cars will be very gradual. It’s going to take a decade just for the first markets to fully switch over to autonomous. Other markets will follow thereafter. You’re going to have to start with a mix of humans and autonomous and autonomous won’t be cheaper than humans for the first few years because of the cost of technology. The same way Uber uses profits from mature markets to fuel growth, it can use profits from non-autonomous markets to remain competitive in markets that are becoming autonomous long enough to catch up.

      Lastly, you’re not taking into account how long it will take society to embrace fully autonomous cars. There’s a lot of ludditism and resistance to change that will take one generation to overcome (15-20 years).

      Waymo’s lead is largely irrelevant in the grand scheme of things.
      May 20, 2018
  • Amazon / Design Shsjwkadbe
    Disagree that Uber has consumer trust.
    May 19, 2018 1
    • New / Eng
      jesus.cpp

      New Eng

      PRE
      Uber, Amazon
      jesus.cppmore
      OP
      You might be right.

      My experience is that people in tech overestimate the negative sentiment toward Uber. Most people have never heard of Susan Fowler.

      Dara is doing the right thing to rebuild the brand. I love that he removed forced arbitration. Keep it up.

      However, I don’t think he can fix the core strategic issues in time.
      May 19, 2018
  • Uber Jvor007
    You’re missing item 0.

    0. Rideshare platform.

    This is all an efficiency play, it takes time to figure out how to build that software stack.

    For 3, Uber can partner or purchase, same as Google. That’s a wash.

    #2 - Google (Waymo) is way ahead, no contest.

    #1 - Dara is fixing it for Uber, plenty of time before #2 becomes real.

    #0 - Google has to buy Lyft or partner. They likely partner in my opinion, Google isn’t built for a real-world focused business. For example, see how successful Google Fiber is.

    Amazon has great logistics, the market makes sense too. Not sure how they handle 0 and their 2 is a pipe dream for them right now.

    Best bet for Amazon, buy Uber.
    May 19, 2018 6
    • Google yue
      I think #0 is kind of taken care of by Google. We are pretty good in scalibg softwares as well. Hardware or physical assets is our weakness.
      May 20, 2018
    • Uber Jvor007
      You have to figure out what to build before you scale it. There’s thousands of features that have to be built out.

      Saying it’s a matter of scaling is like saying “Bing and Google Search are no different if they can scale equally well.”
      May 20, 2018
    • Google yue
      Well I think you missed a point in my reply.
      May 20, 2018
    • Uber / Eng xhnmkf
      Google’s biggest weakness is that it sees everything as a software problem, which is why they fail at the real world over and over and over again.
      May 20, 2018
    • Google yue
      As Steve Jobs and Bill Gates once said, it's all in the software. But I do agree, we need to improve our hardware approach.
      May 20, 2018
    • Uber / Eng xhnmkf
      Hardware isn’t your problem. You need to understand humans first. That’s why Wave and Google+ failed.
      May 20, 2018
  • New / Eng
    rapER

    New Eng

    PRE
    Uber, Amazon
    rapERmore
    The most telling point is the exodus of senior people and struggles to hire new ones. They have more information than the average person on Blind and there is a good reason they don’t want to be at Uber. In particular, a good CFO is going to push hard to see if this is a viable business before taking it on.

    Amazon, Facebook, Netflix, Google has this kind of leadership churn. This reminds me of Snap and Twitter. Both fell apart and peaked before IPO.
    May 20, 2018 4
    • Uber / Eng shANq80
      Your guess is too wild.
      May 20, 2018
    • Uber noober
      “Amazon doesn’t have this kind of churn” is not a true statement. Though their business model is designed to create churn so might be fine. Seeing churn for folks there 4 years is to be expected. And seeing a new CEO bring in his own people is also normal.
      May 20, 2018
    • New / Eng
      rapER

      New Eng

      PRE
      Uber, Amazon
      rapERmore
      Amazon’s senior leadership team has been rock solid. Jeff, Jeff, Andy, etc. and vacancies are filled quickly. You are no Amazon.
      May 20, 2018
    • Uber / Eng xhnmkf
      We’ve had a lot of strong senior people join in the past three months. What happened in 2017 is not indicative of what’s been happening in Q2 2018.
      May 20, 2018
  • Uber WesSnipes
    Not sure what the meaning of this thread is.

    OP - can we assume you couldn’t get into any of these top companies posting here?

    Anytime I see New I automatically believe you work at Cerner or some no name dump in the Midwest.
    May 20, 2018 11
    • Uber Uber 3.0
      Don’t be a douche. Anyone starting their own company / working at a small startup will be marked as New.
      May 20, 2018
    • Yahoo Yaboo!
      Or used to and was a much higher pay grade than you
      May 20, 2018
    • New Plisnix
      Also a douche on another thread ^^
      May 21, 2018
    • Uber Sfgt4df
      Looks like Uber didnt select @Yaboo!
      Best luck next time dude. 🤣
      May 21, 2018
    • Yahoo Yaboo!
      That’s what you uber scrubs always say like that shit even matters, I don’t work at yahoo anyway
      May 21, 2018
    • Uber WesSnipes
      I wouldn’t admit it either bro
      May 21, 2018
    • Uber / Eng oOBb03
      The number of yahoo resumes we got was off the charts during the worst part of 2017. Thankfully that period is over. We never hired any of them though, in my team at least.
      May 22, 2018
    • Yahoo Oatherino
      Why not? Im not at yahoo and several of my coworkers are at google and Facebook now and were good.
      May 22, 2018
    • Uber / Eng oOBb03
      It wasn't due to the yahoo label. They didn't meet the hiring bar. Usually they had a lot of years of experience but when you talked to them, they weren't strong on algorithms and/or system design. They could have been downleveled but then we would not beat their current pay. And we hired a lot of juniors back in late 2015 and all of 2016. We more recently focus on sr engineers.
      May 22, 2018
    • Yahoo Oatherino
      That makes sense I’m junior anyway and my peers that went to google/fb are juniors, I went to Microsoft not that it matters
      May 22, 2018
  • Qualcomm DwyerAndy
    Fantastic post.

    Do you think Amazons operation expertise accounts for anything in the automotive industry?

    Also, everyone agrees that Waymo is ahead. But, isn't Uber next? They have the academic expertise from CMU. The other companies in L5 like Cruise, Lyft are probably behind Uber?

    Should Uber be dejected at this point?
    May 19, 2018 3
    • LinkedIn 90091e
      Cruise is definitely ahead of Uber. In “some” aspects they are even ahead of waymo.
      May 19, 2018
    • New / Eng
      jesus.cpp

      New Eng

      PRE
      Uber, Amazon
      jesus.cppmore
      OP
      Operations expertise at massive scale is going to be a real complexity. Amazon is ahead of everyone there.

      Amazon will also build this as a platform (like AWS) and run not only their own products: last mile, Whole Foods, ride share on it. They will also open it up to everyone else.

      Being able to combine deep operations expertise with superior utilization will make Amazon a very formidable competitor.

      They can also enter late since they can start with their existing products before getting into ride sharing.
      May 19, 2018
    • Uber / Eng ulhfrhe
      Amazon is great at operations but not real-time. Amazon is still trying to do same day delivery. On demand point to point transportation and delivery is a whole different can of worms.
      May 25, 2018
  • Amazon / Eng 👶lol
    What do you mean by L5 autonomy? L5 employees having autonomy to make decisions?
    May 19, 2018 3
    • Uber (Admin)
      Complete self driving ability for cars
      May 19, 2018
    • Amazon / Eng 👶lol
      Ah that makes a lot more sense
      May 19, 2018
    • New AMex31
      Would it still be "ride-sharing" then?
      May 21, 2018
  • Uber Sfgt4df
    Uber has 1 and 3 and a very good chance of being 2nd or 3rd player in 2.
    May 19, 2018 2
    • New / Eng
      jesus.cpp

      New Eng

      PRE
      Uber, Amazon
      jesus.cppmore
      OP
      Bits are very different than atoms. Xchange Leasing was a first attempt to get involved more deeply on the asset side. It did not go well as you may remember ...

      Amazon is light years ahead of both Google and Uber. Google may be even more clueless than Uber in this regard.
      May 19, 2018
    • Uber / Eng xhnmkf
      Exchange leasing was done naively to support ridesharing instead of managed as a business unto itself.

      As companies with expertise in fleets like Enterprise and Hertz continue to lose share value, you’ll see their best hired by Uber to build and manage fleets. It wouldn’t take but 2-3 years to learn and scale. Just look at Eats, which is now the largest food delivery service after three years.
      May 20, 2018
  • Time to join doordash
    May 19, 2018 1
    • New / Eng
      yütüb

      New Eng

      PRE
      Google, Facebook
      yütübmore
      Sarcasm?
      May 20, 2018
  • Applied Material fuball
    I don’t think ridesharing/shared mobility is a winner take all market and it has taken uber and lyft the greater part of the decade to garner customer trust (1) and operations expertise/presence (3). Case in point: Even now Android is a distant second in terms of profits though the google phone came out less than a year or so after the first iphone did. Lets not get carried away here. Yes waymo is still miles ahead in self driving.. but whoever thinks they are at L5 is not knowledgable of what autonomous driving will take. Even waymo’s own top dog, Chris Urmson, left his role to start his own self driving startup. Cruise automation is also already pretty close to where Waymo is and considered to be a close #2. To reach where waymo is doesn’t take much time now since the algorithms are known (google it.. even sacha arnoud, their head of sw agrees) and data is all you need for those algorithms to work right which in that case uber/lyft/tesla have lots of, maybe even more than waymo. Achieving scale is what’s needed.. and yes scale in atoms not bits.. then maybe tesla/gm might be closer than waymo. Uber/lyft have scale of their own as far as real rideshared cars on their network..
    May 19, 2018 1
    • Google yue
      I think the purpose of Android was never to make money.
      May 20, 2018
  • Yahoo Yaboo!
    I made a similar thread and all the Uber guys roasted me
    May 19, 2018 0
  • Applied Material fuball
    He’s actually implying lyft/uber can loose their drivers and market (customers) the moment someone gives a better deal to both.. not sure if that can happen overnight or within a year or two..
    May 19, 2018 1
    • Uber / Eng xhnmkf
      He’s also suggesting that uber won’t compete in other ways in those markets to maintain its category position.
      May 20, 2018
  • I’d be more concerned about their existing business being disrupted by competition than whether or not they can become an autonomous car player. They have barely any technical moat and their drivers/users would gladly jump ship if a competitor can provide better value.
    May 19, 2018 1
    • It just seems like an industry where the middleman (Uber/Lyft) could become unnecessary long before human drivers do.
      May 19, 2018
  • Google QvCc10
    Why partner? Why not launch pickup from Google Maps?
    May 20, 2018 0
  • Funding Circle / Eng DonutHoles
    One company has to win or dies, so I’m gonna bet on that company.
    May 21, 2018 0
  • Uber snddn
    One of Google's largest international investment is in GoJek: Indonesia's version of Uber (but much more than just ride sharing) which plans to expand soon. It's the best way for Google to understand operational expertise.
    May 19, 2018 1
    • Uber / Eng xhnmkf
      Being an investor is not carte blanche for gaining the insights you need. They would have to acquire a ridesharing company to get unfettered access to insights. They are also investors in Uber and Lyft. Their largest ridesharing investment in terms of dollar value is still Uber.
      May 20, 2018
  • Amazon
    Vkifkl:

    Amazon

    PRE
    Google
    Vkifkl:more
    Has anyone ignored the human aspect: How many of you would take a ride WITHOUT a human driver behind the wheel?
    May 20, 2018 0
  • Uber uBasic
    Self driving cars works, but at scale it’s a can of worms - the socioeconomic implications will be hard to gauge at least in the short term
    May 23, 2018 0

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