Why Uber could be worth $17 billion—and possibly much more

Why Uber could be worth $17 billion—and possibly much more (Part 1 of 9)

A key guide to Uber and the changing world of transportation

Uber

Uber is a San Francisco–based on-demand car service that’s accessed through a mobile phone application. Though Uber has only been operating for four years, it has expanded aggressively across the world. The service is currently in over 125 cities across North America, Central America, South America, Europe, the Middle East, Africa, and Asia Pacific. Recently, Uber completed a round of financing that values the company at $17 billion pre-money.

2014.06.18 - UBER on demandEnlarge Graph
Uber provides a variety of options, though not all options are available in all locations.

  • uberX – Uber-provided transportation in a regular car
  • uberBLACK – Uber-provided transportation in a black car
  • uberSUV – Uber-provided transportation in an SUV
  • uberT – Use the Uber app to hail a regular taxi
  • uberRUSH – Summon a bicycle messenger on demand to transport goods (New York City only at the moment)

Uber operates on a cashless basis, as payments are processed electronically through various methods such as PayPal, Google Wallet, or credit card information that has been submitted through the app.

Broadly, customers have also had positive comments about the Uber experience. Uber’s value proposition includes a consistent and professional experience, taking the uncertainty out of finding a ride and not knowing how long of a wait is required, and the assurance of being able to pay without cash. Plus, Uber’s presence in various cities means customers can have the same Uber experience while traveling and not have to navigate the local taxi system or look up local car services. Uber also noted in a recent post on its blog that at its current runrate, it’s helping to create about 20,000 new jobs per month.

Outlook

Though Uber in its current form operates as a service to connect passengers to drivers, the company could operate in the future as a logistics provider on the scale of FedEx (FDX) and United Parcel Service (UPS). Uber could also affect the operations of same-day delivery services provided by companies such as Amazon (AMZN) through Amazon Prime, or eBay (EBAY) through eBay Now. Plus, transportation could be completely changed with solutions that draw from Uber’s geographic reach and technology and the advent of driverless cars from a company such as Google (GOOG), which has funded part of Uber through its investment arm called Google Ventures. eBay, Google, FedEx, UPS, and Amazon are part of the S&P500 Index and corresponding ETF (SPY). We’ll discuss these themes later in this series.

The Realist Discussions

  • JAN JORDAN

    UBER’s insurance has been declared fraudulent by 18 states. They do not perform background checks on drivers and babies have been killed and women raped by UBER drivers. UBER rips off drivers by flooding an area with too many cars, keeping driver tips and cleaning fees after a customer throws up and charging customers for canceled trips but not passing the fee on to drivers. UBER breaks every law they can find everywhere they go. Anybody who works for UBER or uses the app is stupid and destined to be ripped off.
    Ask Jerry Seinfeld’s wife.

  • chuck cotton

    UBER, LYFT, SIDECAR, AND OTHER APP CYBERSPACE TRANSPORTATION COMPANIES ARE ALL UNREGULATED COMPANIES OPERATING IN A REGULATED INDUSTRY. IT IS AGAINST THE LAWS–FEDERAL, STATE, AND LOCAL.
    Their operations are criminal and in violation of the Racketeering Influenced Corruption Organizations ACT ( RICO). Complaints have been filed with the US Attorney General, Eric Holder and RICO suits in Federal Court (Southern District of Texas, case# 4:14-cv-00941-) and Boston and Chicago ( go to pacer.gov).The Media, Lawmakers, Law Enforcement, DOJ, IRS, Department of Labor, FBI, Capital Venture investors, and Insurance companies at all levels must WAKE UP to the criminal activities of these companies.
    If these app companies want to operate in a highly regulated transportion industry, whether ground, air, or sea, then they must by existing law, COMPLY. Thereafter, if they wish to attempt to change any law, simply go through the procedures.
    Above all, the public, both App drivers and passsengers ARE NOT PROTECTED if there is an accident, injury, or death. All branches of federal, state, and local government are responsible for letting these companies operate illegally and also have much exposure when a claim occurs by a driver, passenger, or pedestrian.

  • Charlie

    Any skeptic of Lyft should try the service first for FREE

    1. Download the Lyft app
    2. Enter code LOSANGELES (works nationwide)
    3. Request and enjoy your FREE ride
    4. Repeat on another phone to get home

  • chuck cotton

    I’ll comment again as my first comment was deleted
    Uber/Lyft, Sidecar and other app companies are illegal, unlicensed companies, all unregulated, operating in a regulated industry. It is against the law. These companies and their investors will not obey the laws. If they want to compete then COMPLY with all the laws, and then they can attempt to change law through the normal legislative process.
    RICO ciminal violations have been submitted to the Attorney General and the FBI. Payroll tax evasion violations have been submitted to the IRS. Department of Labor violations have been submitted. Numerous insurance complaints have been submitted to State Inusrance Commissioners. Illegal state violations have been submiited to many state regulators as well as city regulators. Further SEC complaints have be submitted against those investors who have invested public monies in these illegal fraudulent companies and the unregistered securities trading schemes.
    STOP CORRUPTION. The public is being ripped off and placed in harm’s way, both the driver, passenger, and pedestrian. If there is an accident, injury, or death, the public is not covered.