We'll find out. That's two years to turn a 2.5B burn rate into profits. I wonder what Dara will do?
Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet.
Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.
I think uber has the exact model they're trying to execute in mind. They'll turn their existing funds into growth and turn cash flow positive at around their last $100m left in the bank. That way, they most effectively utilise the resources they have and grow as big as they possibly can get. The fact that they are firmly closing the losses gap with constant rate of improvement kinda proves that fact. They definitely won't switch to new pricing model overnight to turn profit, the process has to be gradual anyway. Of course, market forces could be more sophisticated than a simple mathematical model of funds vs returns, and there could be unseen side effects if stopping half way or closing the gap way to quick, but it's probably an assessed risk.
Uber's model of survival isn't exactly self-driving ambitions, it's more about utilising their asset sheet effectively. That's why benchmark could be so eager to get a CFO - someone needs to vouch and stand behind the path to Uber's profitability. Right now, the only person who's left who can stand behind it is Travis, and he lost a lot of cred. Recent rumours about softbank investment might suggest that Travis thinks that this model can be extended even further at the cost of the dilution, and even greater market scale could be achieved (along with his own personal desire to lead on with that deal, possibly), but investors would rather not play another round of uncertainty and ambitious spending and would rather cash out quick. Also after an IPO the company would have a much better chance at leveraging a simple loan/bond to continue growth, as because the rate of its growth would still most likely exceed the interest rates.
The big question is whose investors are willing to go for the big prize.
If both companies push for profitability, then the market slows to the pace they both push it while remaining profitable.
If however only one company pushes for profitability now and the other has investors willing to fund growth for the foreseeable future we could see one emerging as a winner.
Personally, barring an economic downturn on the horizon, it's foolish to go public now if their competition doesn't also go public.
Because there is still plenty of growth opportunities across their various products globally, they can get at least 1-2 more private funding rounds before they truly need to turn to public markets for funding. They should take that money while it's still there.
Users won't like the changes. And Lyft is waiting with open arms and promo deals. That 6.6B cash is only impressive because of their user base and fleet.
Drivers might be the first to suffer. They'll probably feel the effects -- less pay -- before the users see price increases. So if Uber is about to switch to moneymaking mode, their fleet may become unreliable soon.