Uber 18.2 billion dollar sky-high valuations are confusing

Lead: In a commentary published today in the US Wall Street Journal's online edition, "The Uber 18.2 billion dollar valuation is confusing" (Ubers $18.2b valuation are a head scratcher), though Uber looks promising, But by careful analysis it is easy to see that there are many innate flaws in the company that cannot support sky-high valuations of 18.2 billion of billions of dollars. The following is the full text of the article: Car rental Applications Uber in place, far-sighted, but investors who have just given the company 18.2 billion of dollars may have overlooked one problem: Uber's moat is actually very shallow. This means that a large number of competitors may be able to rob Uber's business without much effort, limiting its eventual size. Why do I think that? I recently interviewed every Uber driver and taxi driver in detail. Because I don't have a car, but I travel a lot, I always use Uber in the city. They are all talkative, and my main conclusion is that drivers only value economic interests and value prices; they do not maintain special loyalty to Uber. The most sophisticated Uber driver has two or three mobile phones, each of which corresponds to a car rental company. A San Francisco driver drives a taxi for a private taxi company, but he also has a Uber cell phone, a mobile phone dedicated to Uber rival Lyft's phone, and a cell phone specifically for Uber copycat flywheel. He also has a fourth cell phone that specializes in taking orders from a taxi company dispatcher. Not only that, he also equipped with a POS machine to receive credit card payments (Uber and Lyft do not use this equipment, because these services will be automatically deducted), so his car at all times has 5 screens in the open state. I believe this person will be the model for the future, which is obviously bad for Uber. Uber CEO Travis Kalanik (Travis Kalanick) said that Uber will subvert the transport industry, let private cars become the past. This is indeed a very ambitious goal, but the problem is that Uber into a market where there is no resistance, their service is essentially a product without differentiation. The company's rapid growth so far (I don't know the exact data, but Kahlan's claim that its revenues are doubling every six months is an easy target – by expanding into new cities, especially where taxi penetration is low – and taxi drivers ' discontent may be temporary. (when I asked drivers who were very loyal to Lyft why they liked the company, their answer was: because the company was better for them.) In both respects, Uber's growth is reminiscent of Groupon, but Groupon's subsequent encounters are well known. I said there was no resistance to the car rental service because Uber and Lyft are making a price war, all two companies are promoting the low price, while the passenger dayLife is very sensitive to price. Although Uber uses its funds to depress rivals such as Lyft, the Lyft model is indeed simpler than Uber and focuses on recruiting ordinary people rather than professional drivers. The market is certainly not difficult to enter. Unlike Apple and Google, a company with its own ecosystem, Uber has nothing to do with the application and dispatch of services. Therefore, Uber can only participate in larger and more diverse ecosystems, that is, transportation systems. In this system, drivers and passengers have more options available at any time. I believe that Uber investors must think that the company can in the future through a magical way to achieve differentiation and dominate the market. But the transport services from A to B simply do not achieve the kind of winner-take-all effect of Facebook. Uber also claims that its business is not limited to a single form of transportation, but it is also trying to express services in New York. This gives a huge space for imagination: Uber may one day be able to pick up dry cleaning clothes, and even help you pay charitable donations, but previously engaged in these services (such as TaskRabbit) growth is very general. If anyone thinks that Uber could one day be the last mile of ups in the field, so that companies such as Amazon to achieve the date of delivery, it can only be a fantasy. Even if the Uber is evaluated in the most radical form-assuming it takes 50% of the world's taxi market in 5 years-its valuations remain less than 18.2 billion dollars. As Lyft investor Anderson, a venture capitalist and Uber competitor, said: "In the tech world, it's long been wrong." Uber is a pioneer in the car rental market, but the size of the market is not clear. Investors may overestimate Uber's potential revenue size. (PEI)