UBER’s IPO is seeking to raise $10 billion. The SEC papers for the IPO provide extensive information about UBER and Ridesharing.
UBER wants to eventually compete for nearly the entire global personal mobility market. Personal Mobility is 13 trillion miles per year and $6.2 trillion per year. UBER wants to directly compete for an estimated $5.7 trillion market opportunity in 175 countries. In 20 other countries, UBER has partners.
UBER currently is operating in 57 countries. They compete for personal mobility for 3.9 trillion miles per year and an estimated $2.5 trillion market opportunity. They do not currently compete for trips over 30 miles.
Consumers only traveled approximately 26 billion miles on their platform in 2018. This is less than 1% penetration rate of the near-term market opportunity.
Food Delivery
According to Euromonitor International, the global spend for consumer food services, which includes full-service restaurants, limited-service restaurants, cafés and bars, and other consumer foodservice, was $2.8 trillion in 2017. Of this amount, we believe that our Uber Eats offering addresses a SAM of $795 billion, the amount that consumers spent in 2017 on meals from home delivery, takeaway, and drive-through worldwide from these consumer food services.
Freight
According to the American Trucking Associations, businesses spent $700 billion on trucking in the United States in 2017. UBER is competing for all of the US Freight trucking business. Uber Freight currently addresses the brokerage portion of the United States market which was $72 billion in 2017. They believe business logistics market is moving towards an on-demand logistics model. The brokerage segment grew at a compound annual growth rate of over 11% from 1995 to 2017. They have less than 0.1% of this $700 billion market given our $359 million of Uber Freight Gross Bookings for the year ended December 31, 2018.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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You can also IPO just to cash out.
Investors aren’t immortal beings of pure profit optimization. They have lives, they get old, they get divorced, they have personal reasons that they would rather have $10B right now rather than an income stream that is calculated to be worth $10B.
And of course the stock market can be irrationally exuberant about a particular stock. A fast growing stock that’s in every news bulletin might easily list for more than a cautious valuation would actually say it is worth. Might as well grab the cash from the stupid speculators.
Mobility as a service (MaaS) will transform car travel. I expect that by 2030, the World will have approximately 100 million AEV taxis. The typical AEV taxi should travel about 150,000 miles per year. So, 100 million taxis should travel about 15 trillion miles per year. I consider that this aligns well with Uber’s estimate of 13 trillion miles per year. The USA portion of AEV taxis would be approximately 10 million.
If the annual MaaS market was $3 trillion and Uber had half of this market, their market capitalisation should worth about $2 trillion or more. Uber would then be worth more than twice any of the present World’s largest companies.
The bloom must be off the rose at Uber. Usually, as long as things look bright, the founders keep a company private, once things start looking down, then there is an IPO. The other possible reason for IPO, is that the company needs massive capital to expand. I’d think Uber, not being a manufacturer of goods, but a purveyor of information should have as much capital as it needs, unless it’s not profitable.
$6.2 trillion divided by 13 trillion miles yields a rate of $0.48 per mile. This per mile rate seems too high. By about 2030, I expect the rate should be down to about $0.20 per mile because of intense competition. The 13 trillion miles figure is a good ball park estimate. So by 2030, the annual market for MaaS should be about $2.6 trillion.
Ridesharing makes economical sense in the original meaning of the phrase. When someone picks passengers along his route and also when a driver picks up in average at least two passengers. Otherwise it leads to economic exploitation of dedicated drivers. This paradigm will change when we have full autonomy. By than most people will not need a dedicated car.