This is the same thing that happened to MSFT under Ballmer. MSFT stocked performed well, but they missed the biggest opportunity of the post-PC era (mobile), were late to the cloud game, and probably missed some other opportunities I can't think of.

A decade ago, I had a front-row seat for Yahoo! under the stewardship of CEOs brought in to run the business well. The focus was not on innovation, and the company continued to languish. Why? Because tech companies that don't innovate get their lunches eaten by the ones that do.

As for Buffett, I'm no expert on his portfolio, but I believe his track record was built on non-tech companies until very recently.

If you wouldn't call JB Hunt a tech company, you shouldn't call Uber one.

(The research into autonomous cars is not really central to their current core business model - and assuming the technology is successfully developed - their entire business model would change - they'd also need a massive capitalization to purchase a fleet of self driving cars when it does.)

This is a pretty bold claim. The fact that it's instant, and that it geolocalize every party involved thanks to a mobile app, and that every part of the process is fully automated is what makes uber something different from a regular cab company.

To reduce uber to its high level functions abstracting away the technical details and implementation is i think one of the big mistakes business people make in general. I wouldn't be surprised if this kind of reasoning is what business CEO show in their slides before they take the decisions that completely screw the tech companies they're leading.

Twenty years ago an astute and entrepreneurial young man named John took over his father's taxi company, Orange Cab based in San Diego. Exploring ways to reach potential customers, he found that all the cab companies in town were marketing their services through the same traditional mediums - newspaper ads, Yellowbook listings, billboards, etc. Not sure what else he could do, he remembered he still had 4 free hours of America Online credit, and decide to see if the internet had any advice. Then it struck him... Maybe my competitors have websites that I could browse for hints on how they advertise. The search came up empty. Damn he muttered, "none of them have websites", to which his wife Jane (expertly lurking from the nearby davenport desk) quips, "well neither do you, so maybe you should get a website". I have a brilliant idea, he thinks while slightly tilting his monitor away from Jane, maybe I should get a website. He types into the Lycos search bar "how. to. make. a. website." enter, "You know in that technology class I took last semester they taught us how to make a webpage using HTML", pipes Jane; then she smiles and taps John on the shoulder "move over".

After building the website they noticed things starting to pick-up a bit, and in a short few years they were beginning to see real growth; recently their was a nice spike in their marketshare after implementing an online form to request rides directly from their homepage. Younger crowds in particular preferred to request rides over speaking with someone on the telephone.

Fast-Forward ~10 years...

Orange Cab is not so little anymore. They now manage fleets in 14 metropolitan areas and recently incorporated so they could merge with Yellow Cab, making them the biggest cab company in the US. A few days after the merger, Jane (formerly Orange Cab's head of operations) had a meeting with Yellow Cab CEO to see how her role would change after the merger. She came into the meeting excited with ideas about how to innovate to reach new customers (particularly since the new operating budget was 10x the pre-merger budget). She started by sharing an idea where the whole point-to-point experience, from cab request to fair payment is managed entirely by a little software applications on someone's mobile phone. Jane, Jane, Jane, ahhh silly Jane, we are not a tech company. Yes, the website has been really helpful, but don't those smartphone things have a web browser? We are the biggest taxi company in the US, and we have a veteran management team, what's the worst that could happen!

http://www.marketwatch.com/story/uber-and-lyft-didnt-bankrup...

Once autonomous vehicles become practical, it is almost imperative for Uber to own the critical technology to be competitive in their current businesses.

Uber can't ever own the critical technology in autonomous. They are late to the party, critical patents have been filed. Autonomous technology will be freely available when it's commercially feasible, Uber can buy some then. In the meantime it has to avoid blowing through the remainder of it's capital and stay alive.

At this point of time, Uber is an excellent example. There is an innovation on the horizon that will completely change the taxi industry; autonomous vehicles. It's not a secret either. It's an inevitable future. The date of realization? No one knows, but we can see it's coming. Now, should Uber optimize on it's current product set and optimize until they are profitable on every ride? Or should they balance some part of that, with innovating on the future of autonomous vehicles? Travis seems to be working towards the big vision of driverless cars. What would Jeff do?

Fun stuff to think about :)

I'm assuming you mean it's something that will happen within the next 50 years?

I just don't get how this isn't a super-hard social/political issue that we haven't even begun to address as a society. Maybe spending significant resources on this now, is not optimal.

* Will people, on mass, accept being driven around by a machines, on public roads.

* How will they deal with "trolley problem" type ethical scenarios? How will these decisions be made.

* How will self-driving cars cope with rural roads (where they are arguably MORE useful than in Urban settings better served by public transport)?

* How will they cope with signs/marking intentionally designed to fool machine vision systems. Who will be liable for accidents caused in these cases?

There are other issues too. However, overall, I think with some infrastructure investment we could have had self-driving cars since the late 90s early 2000s and there have been many prototypes. It's the ethical/social issues that are the bigger barrier in my mind.

They won't, but neither can humans. Signs aren't secure. Anyone with a wrench can take down a stop sign or put up a fake speed limit.

You don't have to panic, throw huge amounts of stock at a shifty development team, while ignoring due diligence (or do an incompetent job at it) all to do your own.

Car rental companies are the most likely first bulk buyers of self-driving cars. They already buy, store, maintain, and clean large fleets of cars. They're all set up to handle the problems of a big fleet of cars used by many people. Uber doesn't have that infrastructure.

Car rental companies would like to have a car pick you up outside baggage claim and drive you away, rather than using a shuttle bus to get you to their car lot. Customers will like that, too. Even if the cars aren't self-driving on all roads, if they can get from rental car storage to the airport and onto the freeway, that's enough to justify the technology.

Avis already owns Zipcar, so they have app-based car services already deployed. So as soon as the technology is ready, Avis is there with the customer base and the infrastructure.

[1] https://www.bloomberg.com/news/articles/2017-06-26/alphabet-...

Burning money on autonomous now buys them little. They can't control it, they don't have key patents, they will have to buy it just like everyone else.

Uber absolutely does need to innovate. Its business model up to this point has been operating at below cost to suck the life out of the competition so that they can reap the massive network effects when they have driverless cars they can reap the profits.

They can't run their business like a mature low-growth software business where the name of the game is to milk profits and license revenue, because they have no profits and license revenue to milk. Their current business model of subsidizing fares with VC cash is not a sustainable one, so they need a visionary CEO who can get them to driverless cars.

Once they have driverless cars, then they'll be the kind of mature, milk the revenue stream business that Buffett tends to invest in (and then, they'll need the 'keep the business ticking over' CEO too). But Uber is not Geico yet.

Become the quality brand they started as. Charge more than Lyfy and Taxis because they have higher standard. Immelt can make that happen with process and measurement. Uber's tech will allow them to monetize data, and show customers their value is better. Better response times, better service, shorter faster trips, etc. That's how they can win. Trying to be cheaper than Lyft will fail miserably.

Right after he's announced, he should find a buyer for 3/4 of Benchmark's shares to get them out of the conflict, and immediately appoint Travis Kalanick as Chief Vision Office, and hire Holder or someone with perceived panache as Chief of HR and put them on the board. That'd be a good deal to make with Travis - Kill Benchmark's influence by paying them to go away, trade a TK board seat for a neutral party. Win/win/win/win.

I don't doubt that there are some people who will go for it, and I'm sure Immelt would run that business very well, but it doesn't strike me as a multiple billion dollar offer...

We kind of are hitting on Uber's core problem here though. "Profitability" would seem to involve either involve removing the drivers from the equation or hiking the price.

Removing the drivers is really hard. Hiking the price is easy but massively cuts Uber's appeal and cedes the low end to Lyft/Gett.

Uber doesn't need to innovate? That is literally the premise of their entire business.

If you look deeper, the premise of their business is to take over all of transportation. Not just ride sharing. Taking over transportation needs innovation.

If their premise was just ride sharing, their funding and priorities would be very different.

It could never take over all of transportation. It's burning billions every year just trying to build out ride-sharing.

This valuation has been botched by the recent success of Tesla, Apple, Google, GM and a few more who are developing self-driving technology. The one with the best technology will win the race and probably become the first trillion dollar company.

So, in order to keep Uber competitive, you don't need to keep status quo. You need to invent probably the most meaningful technology of this century, at least of the next decades. This requires deep knowledge in tech, artificial intelligence, being able to find the right people for that, navigating the legal landscape in a.i. ethics (e.g. kill my passenger or kill the two pedestrians), motivating your employees through inspiring leadership and being able to lead your company through the next decades.

Adult leadership as you called it is not it. It might conserve the company as is, but you need a lot more than that to make it succeed.

Kalanick had the competitiveness and vision, however could not control his competitiveness, which lead him to build a toxic company culture. He might have succeeded in making Uber competitive to Tesla & Co. from a competition point of view, however, sooner or later the toxic culture would have made the company fold under the pressure, so the decision to replace him was a necessary one.

They can never win the self driving technology war. They were late to the party, they missed out on key patents. They chose a team that may have stolen technology from Waymo, exposing them to massive potential liability. Now they have to start over.

Automous car technology will be freely available to everyone when it's commercially viable. Uber can't transition to that model unless it becomes far more economically successful. No one is going to give them $50B more to build out autonomous car infrastructure (cars, service, storage, parking) world-wide when they are still hemorrhaging money in their first business model.

Uber doesn't need to invent squat. It has to maintain it's massive lead in drivers and installed apps. When it's customers want an autonomous car, they'll use the same app they always did.

I don't buy that. They'd use that technology to build out their advantage over all the competitors instead.

Regarding your point about Uber not being able to compete in the autonomous technology race. Having a network of drivers (which will become obsolete) and users is a bit of an advantage, but not much.

The first company to reach stage 4 can release their own app and get 100 million installs in a few months, if they reach stage IV. They don't need the Uber app.

Maybe a second mover who reaches stage IV after the first mover will buy Uber, because they can't get that many installs as the first mover, and they want to catch up as fast as possible, but that won't be worth more than a few billion.

No one who reaches stage 4 is going to build tens of millions of their own cars within months and build the parking/service infrastructure nationwide to boot. No one is going to download their app till they do.

The idea that the company that is first and best at developing autonomous tech is going to also simultaneously build huge factories and make good cars is ludicrous.