SoylentNews is people
SoylentNews
Reports: Uber Set To Buy Careem For $3.1B
Uber Technologies' long-rumored purchase of Dubai-based rival Careem could close this week, according to reports citing "people with knowledge of the matter."
The fact that Uber may buy Careem isn't surprising. Crunchbase News reported last September that the deal between the ride-hailing competitors might take place. What is a little unexpected is the currently-expected purchase price.
In September, a buyout was said to value Careem at $2 billion to $2.5 billion. But now, per Bloomberg, Uber is expected to pay $3.1 billion for the company with a mix of cash ($1.4 billion) and convertible notes ($1.7 billion). The notes will be convertible into Uber shares at a price equal to $55 per share, according to the term sheet seen by Bloomberg.
[...] The Careem deal, if consummated, could help Uber's short-term growth rate. As we've reported recently, Uber has seen its growth rate, as measured in percentage terms, decline. While the company remains stiffly unprofitable, slowing growth could prove difficult to square with the valuation it covets.
(Score: 2) by takyon on Tuesday March 26 2019, @06:13PM (2 children)
I think Google has a good chance of doing it, and Uber would have to respond if Waymo fares ended up being something like 20-50% of what Uber/taxi fares are. The response could cause Uber to completely unravel, run over more pedestrians, etc.
Waymo Orders Thousands More Chrysler Pacifica Minivans for Driverless Fleet [soylentnews.org]
Turn Your Conventional Car Into a Driverless One for 10 Grand [citylab.com]
I think it's reasonable to say that the driverless sensor suite will add around $10,000 to the cost of the vehicle. Driverless vehicles used by Waymo will all be electric. A $50,000 price for 1 vehicle is my guess. $1 billion would get you 20,000 vehicles, although you would still need charging stations, maintenance/parking centers, etc.
Uber has something like 750,000 to 1 million drivers in the U.S. Google could do the work of that entire driver pool using less driverless vehicles, since they might be on the road 22-24 hours per day. There's also no need for Google to handle Uber's entire fare load instantly. They are building from the ground up and can expand region to region, city to city. They may stick to major population centers initially, and only expand outwards to smaller cities later. So Google can spend $5 billion to get 100,000 vehicles, or maybe $12.5 billion to get 250,000 vehicles. Increase the number to account for various costs.
To get $7.5 billion revenue out of 100k cars in 3 years, each car would have to collect $25,000 in fares annually. Driverless fares could be $0.35/mile [marketwatch.com], compared to $1-2 for Uber/Lyft [ridester.com]. So each car has to drive around passengers for around 72k miles per year, about 200 miles per day. If the cars are fully utilized nearly 24/7, then each would need to pick up less than 2 customers per hour (average trip distance is about 6 miles [ride.guru]). You could make things even easier on Google here by increasing the fare to $0.50/mile, which could go down later.
It seems plausible. Google has put in a good amount of R&D over many years now, and just needs to lay down the cash. They have 100% of the cash needed to get started. The amount needed will probably be far less than what would have been needed to make Google Fiber a nationally competitive ISP.
Google has another way to generate revenue from these cars. Don't forget that they are an advertising [futurecar.com] company...
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by bob_super on Tuesday March 26 2019, @06:45PM (1 child)
Somehow, I think $0.35 per mile is optimistic, considering real-life maintenance, wasted miles going between fares, and just the silly fact that people putting down actual billions to buy those assets rarely have the patience to wait 5 years to see a tiny ROI.
They'll charge a buck or two, probably two bucks with some kind of "discount" until people don't pay attention.
(Score: 2) by takyon on Tuesday March 26 2019, @07:17PM
Not competing on price? Tough sell for a service that you have to download a new app for, and is newfangled driverless.
I'll give you $0.75/mile, which would still be a substantial improvement in many cases. Where it could really matter are cities where surge pricing multiplies the cost of your trip.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]