> A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.
IMO the lines are a little fuzzy and the definition of "tech company" seems to be shifting pretty often to fit a specific narrative.
Like why is Netflix considered a tech company instead of a media company (like Disney or whoever owns Discovery +, AMC, or similar) when all they're doing is producing video content on a streaming service but Uber has to be valued as a taxi company when they produce an app that coordinates movement of people, products, and other things?
I guess part of the problem is everything is "tech" so the term is starting to lose meaning except when we want to No True Scotsman something (not that I'm accusing you of doing that here).
I think the issue is that "tech" is a shifting label that requires novelty.
My great-grandfather came over from France to work as an "engineer" in the mines of Minnesota. I suspect that for him as for me, the novel technology created an opportunity for quick-on-the-uptake people to make a decent living figuring out the new thing and making it go. But eventually the technology becomes settled and boring, so it's a different thing both in terms of skill and economically.
If you're interested, you might look at Wardley mapping, one axis of which involves technology moving along this axis: Genesis -> Custom Built -> Product -> Utility/Commodity. Also relevant is the technology adoption lifecycle: https://en.wikipedia.org/wiki/Technology_adoption_life_cycle
Because when streaming started the tech was new. So the differentiator was the technology. Now they’ll morph into just a media company.
It’s funny that CBS and stuff was a tech company 100 years ago.
Similar is the morph of Google into just a clear channel or other ad company. Search and adtech was hard years ago so they were a tech company. Now they sell ads and data.
> Like why is Netflix considered a tech company instead of a media company
Before they started making their own content, Netflix was a pure tech company. They pioneered a lot of the streaming technology we now take for granted, and they were the first to solve some very difficult challenges.
Recently the market re-priced Netflix stock to be more like a media company, so reality has caught up.
No, the entire promise was to eventually have a fleet of autonomous vehicles doing the driving. The human driver phase was just to 1) drive adoption of the app and grow share and 2) generate training data for the self-driving AI models while waiting for the fully autonomous capability to arrive. Scale is irrelevant as long as you are paying humans to drive cars, because that's not a model that can ever scale and will always just be a cab company regardless of size.
>No, the entire promise was to eventually have a fleet of autonomous vehicles doing the driving.
No, to the best of my knowledge, the push towards autonomy came after they realized that they would struggle to get profitability through scale. Just look at their first pitch deck[1] from 2008, there's no mention of autonomy. They didn't really start pursuing autonomy until around 2015, when they finally started hiring researchers for that[2].
I’m not sure if I ever believed that hogwash. I think it was a fantasy meant to try to justify ludicrous stock prices on unprofitable companies. After 14 years of serious investment, it’s not clear if self driving cars are ever going to become mainstream, and certainly not soon enough to keep Uber and Lyft afloat.
It's a bit odd to be skeptical that self driving cars won't ever be mainstream. Computers have only been a thing for ~78 years and yet they're already capable of doing so much.
But now instead of drivers, you need to acquire land/buildings/people to manage the fleet of self driving cars. Someone has to refuel/recharge the vehicles, clean/maintain them, etc. Sounds like a taxi company to me.
Well, that was their initial idea, but I think they figured out a few years ago that it wasn't going to happen in time, and tried to find a different way. In theory, software cost scales less than linearly with customer count, so increasing in scale would reduce it as a % of revenue.
Although, maybe not if all your money goes to AWS anyway...
Is Uber genuinely gathering driver data? They're only managing a fleet, and it seems unlikely that each vehicle has cameras installed. Wouldn't the autonomous driving tech actually come from collaborating companies instead of Uber directly?
It's so funny because a decade ago on this very website the rhetoric was the exact opposite in comments. People would bloviate many paragraphs about how disruptive Uber, etc. were and how they were going to revolutionize transportation. People around the world in mass would sell their cars and move into the city and just Uber everywhere etc etc. Uber would pioneer self driving cars and then robots would drive us everywhere and deliver us to a fully automated capitalism future. There was much hype about how only a company like Uber or Lyft could do this and that the old cab companies were complete dinosaurs that would be dead in a decade.
Anyone who dared to suggest that the new ride share companies were actually just cab companies feeding off a pump of VC funding were down voted and shouted down into oblivion. Turns out those people were exactly right though...
Uber did revolutionize transportation in a lot of cities. Cabs in my city were unreliable, untrustworthy, and expensive. Now I can reliably get a ride within a few minutes.
> The entire promise of Uber and Lyft was profitability through scale.
> But now, they all want to scale down to be profitable.
I am a bit confused by these two statements. In the first, it sounds like you are using "scale" to describe the customer reach and sales volume of the company. In the second, it sounds like you are using "scale" to describe the number of employees.
I agree that Lyft and Uber should not be valued like Google or Meta. Wall Street agrees, as you have surely noticed. But both are much more valuable than a traditional cab company. It is the "automated dispatch agent" you mention which makes them that way and which also requires innovative use of silicon and development of software.
As an aside, were there ever nationwide, publicly traded cab companies in the United States of America? I cannot think of any.
I meant a general trend for these companies to pull away from markets, not just scaling down employee count. Uber is only present in three markets now, and there are some credible rumors that they're considering pulling out from one of them (India) too.
Funny how you use 2 definitions of "scale" to make your argument.
> The entire promise of Uber and Lyft was profitability through scale.
Here "scale" means scaling to the entire country/planet. Which, as far as I know, they still are.
> But now, they all want to scale down to be profitable.
Here "scale down" means trimming on employee count where there are inefficiencies.
> A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.
Here somehow you went back to your first meaning of "scale", but used the layoff = "scale down" to imply they want to scale down to a local cab company. I've yet to see a local cab company has an app that's usable in an entire country instead of just one city.
By the same logic, if Airbnb has layoffs, we should suddenly compare their market valuation to a small local vacation property group that only rents beach houses in Maui or something...
> A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.
You, sir, are an absolute savage...and correct.
It also doesn't help that Lyft has not been profitable since going public, so if it were valued as a taxi cab company, it would probably have negative enterprise value.
They are scaling down the workforce which is different from scaling down the operation. This might come next because as a business you obviously don't want to operate in a small market where the economies of scale don't work out.
But now, they all want to scale down to be profitable.
A small scale Uber or Lyft is just a cab company with an automated dispatch agent. It should be valued like a cab company, not a tech company.