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Global Ride Sharing proliferation, consolidation and a future low to no cost transport fabric. The story thus far...




"Uber has been investing heavily in China, and the service is growing there like crazy. Uber’s service is taking off in China much faster than it did in the United States. Nine months after launching in Chengdu, Uber had 479 times the trips it had in New York after the same amount of time.

Uber is also putting a lot of money into its Chinese growth. Uber's China branch has closed a funding round that values it at $7 billion.  In total, Uber has raised more than $6 billion in several funding rounds, including a $600 million investment from Chinese search engine company Baidu."

--- And yet , combined we are still talking about 4 major markets. US, Europe, China and India. South America , Africa , South East Asia are also all ripe for entry. This quote comes from this article.
He with the most funding has the best chance of radically innovating fast enough in the space to grab market share from the others, so far on a global basis Uber has executed brilliantly. They didn't nurse the US market before expanding realizing that the type of technology they were presenting would commoditized quickly (as it has). 

So exploding on the back of the unique margin proposition of their business (of being a lite weight middleman) was exactly the right approach. So here they are with a 62 billion dollar  valuation and there the other global players are needing to partner to attempt to eat into Uber's growth. It's quite an amazing thing to watch play out....still nothing is set in stone, if Uber fails to execute in the markets of greatest potential they can piss away their funding advantage and fall behind in other markets as people become accustomed to one verb or another when trying to get a ride. 

Of course the long term trend is what I've described in the past, the proliferation of services will continue...as other regions enter the fray that are currently not served by the expansion strategies of these big for players (Didi Kuaidi and Ola are still tightly focused on their host markets) the same will happen all over the rest of the world. 

So what will happen is transport will find lots of people providing it in many regions...there is lots of money to be made. Margin per ride goes up by eliminating the costs associated with each ride. The biggest of which is having a human sitting in the machine driving it about...Uber is on this having set up a lab to research self driving cars...but they are too far behind in that endeavor to field their own option in time to match what the traditional car makers are planning. 

Another interesting development I've mentioned and which already seems to be in software form is the development of real time ride comparison apps. That submit requests for estimates from multiple local ride sharing providers and then selects the most proximal , cost effective and otherwise optimal for the passenger service. There really is no reason to have a dozen apps. one ones phone...particularly if one is moving from region to region...so having an app. that can automatically query services for their availability profile in real time and get estimates will be optimal from a user perspective. 

This will mute the importance of branding on the part of the services...but one wonders how the consolidating app. would make money (ads? seem like an interesting touch point to exploit...when ordering ride one is a bit captured to that experience and while waiting one may be more likely to click on an ad). Just thinking out loud here...

In an article I posted a few days ago the ambitions of Ford were made plain ....they aren't resting on their laurels. The rumored Google Ford combination didn't happen ...for the obvious reason that even in SDV's the technology will rapidly transition to commodity....in fact Nvidia PROVED as much during CES last week when they announced their incredibly mature platform for teaching cars, as well as anything else (robots, drones) how to ambulate the world. This is game changing as they set themselves up to be the Google ...google should have been with their SDV program. Now Google risks being left out in the cold without a manufacturing partner or a similar kit to Nvidia for drop in AI. 

I mention Nvidia in context to the car companies because many of them were no where with SDV...the fear of God has been put into them thanks to Google and Tesla's advances in autopilot tech. and here ready for them to use is Nvidia. Long term winner for sure will be Nvidia as they win no matter which car maker buys their kit...so for investment purpose I would definitely be LONG Nvidia right now....they are in an interesting role for SDV enabled AI as Android was for enabling smart phones from multiple manufacturers to have a drop in OS they could use to get into competition with IoS quickly and they did...and 2 years later Android was selling more units than IoS. Except unlike Android which makes zero direct dollars for each license used by phone makers....the Nvidia kits all bring direct revenue into their coffers.

And Apple hasn't even entered the ring yet!

It's going to be a chaotic and exciting time watching this all play out over the next few years.


Comments

Aarushi Iyer said…
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