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Uber's listing has been plunged, and it has broken through the auto-driving solution.

May 15, 2019 06:01
Author: Chen Huifang

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Summary
[Uber's listing has been hit by a big fall. Breaking through the auto-driving solution to profitability] Uber (Uber), a giant in the field of shared travel, officially entered the NYSE with the transaction code "UBER". On the first day of listing (local time May 10), Uber's share price broke, closing at $41.57 at the close, down 7.62% from the issue price of $45. Based on the closing price on the day of listing, Uber's market capitalization is about $69.7 billion, far less than the $120 billion expected by Morgan Stanley and Goldman Sachs last year. On May 13, local time, Uber's share price continued to fall. It closed down 10% to $37.27 on the day and nearly 4% on May 14. (Securities Times)

K picture uber_31

Share the giant Uber (in the field of travel)Uber), officially use "UBER" as the transaction code to log on to the NYSE. On the first day of listing (local time May 10), Uber's share price broke, closing at $41.57 at the close, down 7.62% from the issue price of $45. Based on the closing price on the day of listing, Uber's market value is about $69.7 billion, far less than last year.Morgan StanleywithGoldmanThe expected $120 billion. On May 13, local time, Uber's share price continued to fall. It closed down 10% to $37.27 on the day and nearly 4% on May 14.

Obviously, listing does not mean the carnival of capital, and “blood-blooding” in the continuous loss. Uber is facing the difficult start of the second half of the game. While seeking to continue to expand its diversified business, autonomous driving technology not only brings high valuations to Uber, but also has more than a trillion market behind it, and it has become a “life-saving straw” to reverse its difficulties.

Burning money does not make money

Listing is broken

SurpassedAlibabaAfter the US stock market's largest IPO project, Uber's share of the stock market is an expansion dilemma that continues to burn but has never been profitable. The unicorn company, founded in 2009, has yet to find a sustainable business model.

Uber prospectus shows that the company is 2018Operating income$11.27 billion, earning first profit,Net profitIt is 997 million US dollars, but this is the profit obtained by selling some of the business and investment in Russia and Southeast Asia. After deducting the main business, it still has a loss of up to 3.033 billion US dollars. In the first quarter of this year, Uber's revenue was $3 billion, and the net loss was about $1 billion to $1.1 billion. Uber also warned investors in the risk warning that “may not be profitable”.

But "burning money does not make money" is far more than the Uber family. The unicorns who enjoy high valuations are almost not really profitable.

In March of this year, Uber's main competitor Lyft was listed on the high-profile, becoming the "global network car first", the issue price is 72 dollars. However, its stock price surged and then ushered in more than 20% plunge. On the day of Uber's listing, Lyft's decline exceeded 9%, refreshing the intraday low of $50.02. Not long ago, Lyft announced its first financial report after the listing showed that the company's first quarter revenue of 776 million US dollars, an increase of 95%; net profit loss of 1.14 billion US dollars, exceeding the company's 2018 annual loss. Since its establishment in 2012, Lyft has suffered losses for six consecutive years and the amount of losses has been expanding.

Domestic network car giants are also losing money. In February of this year, a financial data circulating inside the Didi travel showed that the company lost 10.9 billion yuan in 2018. In September 2018, the internal letter issued by Di Wei's founder and CEO Cheng Wei mentioned that Didi has not achieved profitability in the past six years. The overall net loss in the first half of 2018 exceeded 4 billion yuan.

Deep into the dilemma of profit

Talking about the business model, Uber has always been determined to become the transportation industry.Amazon", the vision expanded to include taxis, takeaway transportation, automatic driving,robotAll transportation-related subdivision scenarios such as distribution. Currently, the Uber platform has personal mobile, takeaway, freight and driverless services. The personal mobile service includes two sub-categories of taxi business and new mobile business. Among them, the new mobile refers to Uber's newly expanded business categories such as shared electric bicycles and shared electric scooters.

Uber believes that diversified business can enable the company to launch the power of scale effect in the future. But in all of these businesses, the current largest contribution to Uber's revenue is the personal mobile business, in which the taxi business contributed $9.2 billion out of a total revenue of $11.27 billion in 2018, accounting for 81.6%. According to the prospectus, as of December 31, 2018, Uber's operations have covered 700 cities on 6 continents, with 91 million monthly active users, 14 million daily trips, and 3.9 million drivers. The driver was paid $78 billion in revenue.

The network car is caught in the profit dilemma of burning money and not making money, and the operating expenses paid for the market are the key. According to the Uber prospectus, its revenue was $11.27 billion in 2018, with a total cost of $14.303 billion and operating losses of $3.033 billion. The rate of loss has been rising, and subsidies for drivers of the network have become one of their biggest burdens.

In order to reduce losses and achieve a smooth listing, Uber had to reduce subsidies and driver commissions. This directly led to the strike on May 8th, two days before the Uber listing, drivers in the United States, Britain, Australia and other places protested the wages, demanding that Uber provide drivers with stable and stable wages, ensure work safety, and increase medical care.InsuranceBenefits such as holiday pay. However, Uber's reality is that subsidies for drivers and passengers that have previously competed for the market have adversely affected Uber's financial performance; if the drivers on the platform are defined as company employees, the costs and expenses are required to be paid. The loss will be further aggravated.

Therefore, the development of autonomous driving to get rid of "binding" seems to be the new point of Uber's growth prospects.

Breakthrough automatic driving trillion market

In Uber's prospectus, autonomous driving took up a considerable amount and was mentioned hundreds of times. Over the past three years, Uber has invested $3.5 billion in research and development, and one-third of it is used in autonomous driving programs. It is said that Uber's daily cost of burning in hardware is as high as 1 million to 2 million US dollars. These costs are mainly used in cars and sensors with high autopilot tests. The monthly cost of autopilot is over 20 million US dollars. At present, unmanned driving is not yet fully accessible, and this will still be a continuous investment process.

Uber's driverless strategy began in 2015, when former CEO Karannik hired Carnegie Mellon UniversityrobotOne-third of the researchers at the research center formed Uber's autonomous driving division in Pittsburgh, which was later the ATG (Advanced Technology Group). Currently, Uber ATG operates a fleet of 300 vehicles and a team of over 1,000 people with a cumulative road test mileage of 5 million miles.

On April 18th, ATG gained a vision from Softbank.fundThe $333 million and $667 million invested by Denso and Toyota totaled $1 billion in investment. At the same time, Uber's autopilot division ATG became a new entity with a valuation of $7.25 billion.

In fact, "autopilot" is one of the reasons why unicorns like Uber enjoy high valuations. In the past two years, Waymo and GM's Cruise, which are also pioneers in the field of autonomous driving, have developed rapidly and their valuations have risen. In 2017, Waymo was not profitable.Morgan StanleyIt is valued at US$70 billion, equivalent to the market value of Volkswagen Group, the world's largest car dealer; in August 2018,Morgan StanleyIts valuation rose to $175 billion, and it is estimated that 80 billion of its valuation will be attributed to the company's network car service revenue; by February this year, it has more capital to give it a valuation of up to 250 billion US dollars. andGeneral MotorsIts 20-year-old Cruise has received a $5 billion investment from the Softbank Vision Fund and Honda, and its valuation has reached $14.6 billion.

Boston Consulting Group BCG predicts the futureAutomobile industryThe overall profit pool will grow from $226 billion in 2017 to $380 billion in 2035. Among them, the emerging profit pool will grow by about 150 billion US dollars. By 2030, nearly one-third of Americans’ roads on the road will come from electric or self-driving vehicles provided by shared travel service companies. PwC in the latest release of "ChangeAutomobile industryThe five major trends report predicts that the proportion of autonomous driving in overall traffic in 2030 may rise to 40%.

Uber quoted in its prospectusIntelAccording to the report, the future market based on autonomous driving will reach 7 trillion US dollars. Uber also emphasized to investors that autonomous driving technology is critical to its long-term business model. The introduction of self-driving cars can greatly reduce the expenses of the network car company in daily operations, and can indeed alleviate the profit anxiety to a certain extent, but the industry generally believes that the commercialization of autonomous driving still has a long way to go, in a short time or hard to accomplish.

(Article source: Securities Times)

                (Editor: DF380)

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