Sell That Stock
Now, before it loses its value!
It was just one more twist in an extraordinary story: this morning Uber settled its San Francisco court battle with rival Waymo for $245m in stock. "We have reached an agreement with Uber that we believe will protect Waymo’s intellectual property now and into the future," said a spokesperson for the Google-owned self-driving …
How long would it take for two large companies and all their lawyers to negotiate a settlement deal? I find it hard to believe that it could be done overnight just because Uber decided it wanted to settle.
Of course, a pre-negotiated settlement deal could have been ready to go, or it could have been they just didn’t wrap it up in time.
Edit: I forgot to mention, them scumbags, yes.
What strange oxymoronic bullshit is this? :)
So in other words, they're cooperating to ensure that they never cooperate.
Not that I object to the outcome, I just wish that if they're going to use the language of diplomacy that they'd hire a spokesman who actually understands English.
They pretty much don't have to.
From what I have seen it appears that Uber is banking on using self driving cars in the future and are just keeping those pesky human drivers around until then.
Assuming that the part about Uber not using any of the stolen tech is enforced, what are the odds of these morons actually coming up with the needed tech themselves (I am going with 'not a chance in hell'). So then they will have to buy the tech (with what, I have no idea, since they have no money and are probably running out of equity to trade), and there is even a chance that they would have to purchase said tech from Google.
All in all, it this doesn't kill them off, it certainly kills off their hopes and dreams for the future.
So then they will have to buy the tech (with what, I have no idea, since they have no money and are probably running out of equity to trade)
That's the great thing about equity in a dodgy, unlisted US technology company: They can't run out of equity, because they issue it. It's like printing your own banknotes. There's no regulation (because Uber are not listed on any exchange), so all they do is offer equity as direct payment, as collateral for loans, or sell it and trouser the cash. Then, when they need more money, they issue more stock and use that, and that only devalues the stuff they've previously issued - which by then is some other schmuck's problem.
Even the crooks running banks have to abide by fractional reserve lending rules.
>That's the great thing about equity in a dodgy, unlisted US technology company: They can't run out of equity, because they issue it. It's like printing your own banknotes.
As long as someone will take it. Anybody that does deserves what they get which is why Uber might have the last laugh at Google in a very Pyrrhic way.
"From what I have seen it appears that Uber is banking on using self driving cars in the future and are just keeping those pesky human drivers around until then."
With self driving cars or not Uber will be just an app. What proprietary technology do you think would stop say Lyft from buying self-driving cars and offer exactly the same service once self driving car technology reaches general availability and proper car manufacturers start mass producing them ?
Uber's bet is that they can be first to make self driving cars technology work and sell it to someone for lots of money.
Partly brinkmanship, which they lost.
And partly because all those legal arguments prepared intensively over a period of months or years take on a whole new or different perspective when aired in open court. The same way all the excuses you had prepared to convince your wife that nothing happened fall flat when she is standing over you with the bread knife.
So U’s lawyers would have said “This is looking a little iffy” and “Better to do a deal before the judge sinks you.”
It is not at all clear that Waymo's settlement was too small. Nobody is anywhere close to deploying a self-driving "ride share" vehicle, and progress toward that has stalled.
Thus the economic impact of "self driving" in general cannot be said to be great at this moment.
Furthermore, the Waymo tech was a dead end. Yes, a dead end is useful still to understand what not to do, but a dead end toward a still non-functional tech simply isn't worth a lot.
Ultimately the greatest pain to Uber was the original Otto purchase of $680m. The stock then was "cheaper" than now, so that payout plus the settlement represents a huge loss for Uber - particularly since it clearly did not benefit Uber materially except perhaps the engineers acqui-hired. Even then, the court costs to date likely nullified that benefit.
"Nobody is anywhere close to deploying a self-driving "ride share" vehicle, and progress toward that has stalled."
Such vehicles have already been deployed in a few places. And the technology is moving on all the time. We are only a few years away from commercially deployable Johnny Cabs.
A huge straw in the wind is that both Toyota and Ford are getting involved, and Ford is planning to get into the public transport business with driverless minibuses, while Toyota is working on prototypes. A minibus may be the ideal compromise for city traffic, small enough not to interfere with traffic flow and to be able to manage smaller roads, large enough to be economical when driverless.
Honestly, I am much less impressed by the removal of the "human" cost of ride sharing. The existing human vs. capital+operating cost of a taxi or "ride share" vehicle is already a minority, and covers a lot of secondary costs like cleaning the vehicle (in general and of vomit), stocking water bottles, helping move heavy items, chatting up the passenger and just being there to provide a human social input into behavior.
Adding $50,000 to $100,000+ of equipment to every vehicle - it is far from clear this changes the bottom line much especially since at least some of the tasks above will still require people.
Jonny Cabs sounded good in a movie, but that same movie showed just a few of the ways by which they can be horribly abused (and will be).
The car companies have to play this game since they have to insure against being "obsoleted".
Nonetheless, the physics of ride sharing is far from clearly a net benefit. The massive traffic jams in San Francisco composed of 30 to 50 thousands of ride share cars (vs. the 200K commuter cars) show that the environmental "benefits" of ride sharing are far from clearly positive.
Self driving buses are a little more interesting except for the problem of dead bicyclists and pedestrians. Experienced bus drivers and cyclists/pedestrians avoid a lot of accidents, but there are still plenty of idiots, resulting in a number of deaths every year. A self driving bus in the era of laser pointers in pilot's eyes, much less malicious attack, I can only imagine the resulting carnage.
What happens when the driverless car breaks down on the dark road out of the way (say A414 between Harlow and Hertford) on the rainy night with a lone female?
Who will come to the rescue or will it have to be more work for local plod?
who calls them? car (broke down), provider (car broke so where was it last we saw it) or passenger (time to get ambulance chaser 4 U involved)
Driverless trains work because they have their own road (rail) so no chance of deviating from their route
The vehicles have been deployed, but the actual capability of the vehicles is still very clearly not progressing.
The reality is that a slow, unreliable, potentially unsafe and horribly expensive "self driving" vehicle is no replacement for a less than minimum wage driver paying stupid tax for not understanding the negative economics of ride share chauffeuring.
Has Uber agreed to give Waymo, or a trusted third party, access to its proprietary autonomous vehicle technology?
You're right that we'll have to wait for the court to release details but I'm pretty sure that Waymo's lawyers came with the relevant contract for this. Waiting for the case to come in front of the court will add some legal force and precedent to the case and more or less turns Uber into a remote-controlled zombie: Waymo can threaten to pull the plug any time it thinks Uber is doing something bad with the threat of compliance as good as any court order.
I'm less interested in the value of the share than what other rights have been accrued in the company in which Travis Kallanick still holds a controlling share.
"I'm less interested in the value of the share than what other rights have been accrued in the company"
I'm wondering if there's anything special about 0.34%. It probably depends on who else has shares, and how much of them.
Just a small percentage can make the difference if shareholders join forces.
Uber crash and burn, you are no worse off.
Uber manage by some miracle to IPO and you get some unexpected cash.
Oh, you can be absolutely sure they'll IPO. Even if they are going to crash and burn, they will still do their IPO.
All those rich private stockholders need to be able to offload their shares to the unwitting public somehow.
" Even if they are going to crash and burn, they will still do their IPO."
Doubt it, tbh. If they IPO, then they need to let someone else see the books and put a realistic price on the stock. A realistic price for Uber is probably close to zero, since it's not profitable, the business model has no realistic path to profit, the core app business has no means of preventing competitors from copying it, and the company seems to have little money left.
I suspect we may be hearing about Uber going belly-up in the next two years, tbh. Possibly as the unicorn bubble pops.
For those that don't understand the power of a rich shareholder, consider the situation. Uber is burning cash to grow. They'll need to raise cash soon, and repeatedly. VC-style investors often force "pay to play" rounds where every investor has to contribute proportionally or have their holdings heavily diluted. Just like poker, these happen more frequently when some of the investors don't have the cash or confidence to invest more.
My guess is that this deal is less about that than a shift in board perspective. The board was previously aligned with Travis. Despite hiring a replacement CEO, Travis was still in control. But this case was promising to be a big loss, and Uber just doesn't have the cash. Doing a desperate round of investment just to stay above water, with the cash going straight to a court judgment, assures a low valuation. All of the current investor funds will be forced to mark down the value of their shares for accounting purposes, and every fund manager the whole way down loses their performance bonuses.
Another aspect is that a court judgment isn't tax deductible to the loser yet is taxable revenue to the winner. And it is taxable in the judgment locale. A settlement can often be structured so that it's a tax deductible expense to the loser, while the winner can select how and where it is paid to minimize taxes. They might even be able to avoid paying taxes on the equity, yet be able mark it down as a loss (offsetting other profit) when it loses value. It's amazing how some 'bad' deals end up being worth more in tax benefits that the money originally lost.
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