Loading ...Lotus-Eaters Love Uber
Uber is another company that lotus-eating investors and the supposedly smart money have got all wrong. Although Wall Street recently lowered its sights by 16%, to $100 billion, for the upcoming IPO, this is still an insane valuation for a business that may never turn a profit. A Wall Street Journal story published last week suggested the dimensions of the problem: Behind Uber’s Slowing Growth: Onslaught of Global Competition Takes a Toll. But the article considered competition only from bonafide companies that are already visible in the ride-hailing field. The real competition will eventually come from every Tom Dick & Harry – i.e., your neighbors, acquaintances and their friends who are looking to make some spare change. All of them will soon be able to buy software that will enable them to create their own ride-hailing micro-companies practically overnight.
This could usher in a brave new world with no unemployment — only massive underemployment
as millions of entrepreneurial drivers try to beat the pants off each other in order to survive. The
ride-hailing concept pioneered by Uber is creative destruction at its most powerful and most
consequential in dollar terms. In pricing the Uber IPO at a tulip-o-mania threshold of $100 billion,
the Masters of the Universe — at least those who lack the good sense to dump their insider shares at
the first opportunity — are headed for a fall.