Re:Lyft vs. Uber: A Tale of Two S-1’s
by adventured on Sunday April 14, 2019 @09:09PM
(#19662614)
Amazon is a decent comparison. Not because of a similar capital investment requirement though (which as you noted in Amazon's case went into things like warehouses). Rather, because the original business isn't where the great value turned out to be.
Amazon has a business that is worth an optimistic $150 billion if it were only traditional retail, without AWS and their relatively new ad business. That's assuming a richer valuation than their peers due to expectations of growth.
The real value to Uber is not going to be in the ride hailing. It's going to be somewhere else, spawned out of the original business, riding on the back of the huge network they've put together in some manner. They'll find something else to monetize with richer margins, or they'll never justify a $100+ billion valuation. With everything they might be able to touch with their scale, I'd bet on them finding enough other business opportunities over time (that said, I also wouldn't be a buyer anywhere near the IPO valuation). The $10b IPO will buy them another likely five or six years of additional cash burn. And if they're smart, in the first year after the IPO, they'll dilute again and go get another $5 billion or so. With their need to find another business, their AWS, they can't have enough capital.
Amazon has a business that is worth an optimistic $150 billion if it were only traditional retail, without AWS and their relatively new ad business. That's assuming a richer valuation than their peers due to expectations of growth.
The real value to Uber is not going to be in the ride hailing. It's going to be somewhere else, spawned out of the original business, riding on the back of the huge network they've put together in some manner. They'll find something else to monetize with richer margins, or they'll never justify a $100+ billion valuation. With everything they might be able to touch with their scale, I'd bet on them finding enough other business opportunities over time (that said, I also wouldn't be a buyer anywhere near the IPO valuation). The $10b IPO will buy them another likely five or six years of additional cash burn. And if they're smart, in the first year after the IPO, they'll dilute again and go get another $5 billion or so. With their need to find another business, their AWS, they can't have enough capital.