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Discussion Starter · #1 ·
I wrote this as a response to a member and decided to start a thread on this... Bottom line, think through this entire plan, weigh in your driver experience, add in some basic common sense, and take a look at a bit of history.

You decide! Would love to see some active opinions here! Cheers -- Uber John, Jacksonville, Florida.

Uber has a serious flaw in their business model. Forget the mental masturbation exercise called "Driverless Cars". In my opinion, that is 10+++++ years away. If Uber has an issue with local regulators on just offering basic service, can you imagine the state, local and federal authoritative challenges they will face? NOT going to happen anytime soon. It's a great way to promise investors a future until the next .BOMB bubble bursts which is sooner than later.

At the end of the day, Uber, Lyft and others only have TWO assets, all of which are "local market based". Period. 1- Riders and 2- Drivers. The problem is simple and troubling at the same time.

1- Riders... The total pool for riders is a finite number in any market. Although it is large and growing, it is NOT infinite, it can only grow with an increased population, a riders propensity to spend AND riders behaviors to use shared services, replacing their own cars.

2- Drivers... The total pool of drivers is also a finite number and a smaller number of the whole than the rider pool. The trouble is this... It only grows when drivers can prosper and it shrinks when they don't prosper. The laws of supply and demand suggest a troubling scenario...

If the driver pool shrinks, rates have to increase which negatively affects rider acceptance (volume). That means fewer riders and less unsustainable revenue to Uber per market. When (IF) the driver pool increases, that means lower rider rates which increases rider acceptance and marginally higher revenue to Uber. However, it is somewhat of an oxymoron in that these are competing events. It circles back to lower rates equals fewer drivers equals higher rates.

Whilst these challenges affect many industries, it is acceptable when you have a somewhat INFINITE pool of assets (riders and drivers). It is not sustainable when your local assets are FINITE.

Investors beware! The only conceivable liquidity event for the investor is an acquisition or a public stock offering. I believe that when Wall Street wakes up and recovers from the upcoming bubble burst, they will not tolerate the risk, not to mention the irresponsible business plan and promise of driverless cars as the path to profitability (not to mention justifying a market cap reportedly worth more than GM, Ford and Chrysler combined).

BUT... What do I know? Only one thing. You can't cheat math for ever.

My suggestion to newbies? Don't be a sheep. Do the math, count your "total" time, gas, wear and tear, liability, etc. Make your own decision. In the meantime, best of luck to you.

Hey, at least the tax deductions are awesome!
 
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