In the last 2.5 years since IPO, Uber stock is still down 25%. The market cap after billions of dollars of acquisitions is $75B. Doordash closed at $65B market cap today. Did Uber’s strategy of jack of all trades master of none fail on itself? Uber has several business lines and trades just $10B over Doordash (which is just one of Uber’s businesses) yet significantly more unprofitable. The stock is sub-40. What does Uber have in store for the future?
Uber lost its mojo when they hired Dara. You can trace the subsequent decline in market share across all their lines of business from that point
Kalanick had to be replaced due to all the shenanigans, but they could have picked a better replacement
Rides gained marketshare
Nothing. Uber's business model is very similar to WeWork and is failing for the exact reasons.
This could be the case but in that case DoorDash should also fall in a year or two.
Yeah let's see if how they're gonna do after COVID
Problem is, they will always be a taxi company parading as a tech company. That doesn’t scale up well worldwide. They built their entire operation as a taxi company specifically designed to avoid the regulations traditional taxi companies must abide by. Over time, those regulations are getting applied to them. But unlike a regular taxi company, they have to shell out hundreds of millions to execs and software engineers. Check out the uber rates in Seattle right now if you don’t believe me.
Why doordash doesn't face the same problem
I didn't know taxi companies make billions of dollars in food delivery.
Hopefully, both Uber and doordash will steadily decline toward single digits (in billions!)
Personally I think it’s a good investment. The competition on rides is down to 2 public players in the US. The competition on Food is down to 2 players in the US (maybe 3 considering grubhub). Everyone is public… which means they have to disclose financials every quarter. Investors are demanding profitability now. So, these companies can’t undercut each other as much as they used to. Now, everyone raises prices together (it’s not coordinated.. but they all have to Bc of what investors are demanding). So with lower competition, I don’t think market share budges that much anymore. Now, just raise prices, cut costs, and grow organically as the whole pie continues to grow (rides + delivery). With time, the market will realize this and I think the price will eventually catch up.
Everyone raising is hard. That's not how it works. I wouldn't want to pay $10 fees to deliver a $12 lunch home
Food Delivery is meant for the affluent upper mid class, in the Us. Courier got to earn at least 10-15$ per order as each takes half an hour or more. There is nothing around that. This is unlike populous dense developing countries where the unit of economics are just better.
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I think they’ll recover over time. They have multiple revenue streams when their competitors have only a handful. They can crush it if they figure out how to optimize their costs and operations.
That’s the story they’ve been saying for 2 years now. Recovery after 10 years is 10 years of opportunity cost for employees and other stock buyers.
I think it’s a true story. It’s just a long one.