Why I don't believe in Uber's Success
I think Uber&#x27;s business model relies on self-driving cars. They&#x27;re paying subsidies now to build a brand -- the name &quot;Uber&quot; has become synonymous with &quot;pull out your cell phone and call for a ride&quot; -- that will be very valuable once self-driving taxis become a commodity (which will happen shortly after their introduction).<p>Uber is not a bet on who can build the most profitable taxi company now -- it&#x27;s a bet on a brand in an industry that will rapidly commoditize. Given that <i>literally everything else Uber does</i> has been replicated by at least one team at every hackathon I&#x27;ve been to in the last decade, there is very little sustained advantage from technology.<p>The auto industry is at a crossroads: you have new upstarts like Tesla that are very obviously planning to convert to a transit-as-a-service model. The &quot;old&quot; auto industry (basically everyone that makes cars and is not Tesla) is still struggling to adapt to a more &quot;continuous development&quot; model like Tesla. Tesla&#x27;s engineering process is far simpler -- an electric car replaces the complex internal combustion drivetrain (an engine block that requires separate air, water, oil and gasoline systems, plus the transmission) with a far simpler electric engine.<p>The electric system in a Tesla is actually far simpler than your average car: the sensor package in a modern internal combustion engine is an incredibly complex piece of engineering. This gives them a huge cost advantage over existing automakers -- if Tesla is providing transit as a service directly to customers AND making&#x2F;maintaining the vehicles themselves, that displaces a lot of revenue (auto sales&#x2F;maintenance to companies like Uber).<p>I think Uber will eventually merge with an auto manufacturer (and likely keep the Uber branding since it&#x27;s likely to be the most valuable part of the company). They already have realized that Tesla is their biggest competition; and I think that the autonomous driving deal with Ford is simply testing the waters for a future acquisition.<p>15 years from now, most people will likely have 3 or 4 choices of how to get somewhere by car: Uber, Tesla, Lyft and likely a mix of local &#x2F; regional companies. Brand value is powerful; and I guarantee you that at the end of this, the Uber brand will be worth more than what they&#x27;ve put into it.