Thursday, June 2, 2016


Great point:

I've always been a little confused about uber's capital needs. When I first heard about uber, the part I thought was super-clever was that you wouldn't _need_ lots of capital because all the drivers would have their own cars. Leveraging the latent capital of one side of the two-sided market was the genius of it.


Taylor Conant said...

Can we call Uber a free market phenomenon when they receive a $3.5B cash infusion from the sovereign wealth fund of an oil kingdom whose violent ownership of their oil fields is guaranteed by the US federal government?

AllanF said...

It's about scaring off potential competitors. Not that the venture $ in SV really competes, they are all in collusion picking and choosing who gets funded and who doesn't, but you know there's also no honor among thieves, so you have to look too strong to want to fight.

And there's the principal's that need to monetize their "sweat" equity. Hey, you priced a house in SV lately? Not that the directors and officers really sweated. The vast majority of engineers, marketing goofs, and customer support drones that really sweated will get bubkis -- and a promise of future wealth once the IPO hits.

Finally, since when have the Saudis ever been considered savvy investors. As far as I'm concerned Citigroup is a scarlet A on their investing record. Arabs... take away the oil and what have they got?

Anonymous said...

This opposite view of how Uber is "leveraging... latent capital" is also a worthwhile read: