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Uber's nightmare has just begun




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" Never got into cars with strangers … "

Did your parents tell you when you were little?

In these days, people get into cars with strangers all the time … only they use a smartphone app to match them with a specific stranger to drive them around.

As you may have guessed, I'm referring to Uber, the world

It's like a taxi company except it doesn't own any cars, nor does it hire any drivers, instead it runs an app that connects drivers with people who need a ride. [1

9659003] Since 2009, Uber has has grown into a hundred-billion-dollar company. It's become so large and popular that it's hard to imagine the world without it.

Hardly anyone "takes a taxi" anymore. All "Ubers" …

The most hyped IPO since Facebook…

After years of extraordinary growth, Uber launched a listing on May 10.

An IPO, as you may know, is when a company first sells shares in the public markets. It marks the first time individual investors can buy the stock.

Uber's debut in the stock market was one of the most hyped economic events since Facebook went public in 2012.

It was on every financial television. The headlines screamed "this is the next Facebook."

Everyone was talking about it … I even heard stories of people who put half their savings into this single stock.

I understand, Uber is a colossal technology company that has become part of everyone's life.

It has changed the way we commute. It even disturbed the culture.

Who would have thought that we would take trips from strangers in their passenger cars on a regular basis?

But while Uber is a disruptive company it is a terrible business … and the stock is a terrible investment.

You don't need a master's degree in business to understand this …

Ultimately, every business must make more money than it spends. Period.

Yes, you can sacrifice profits to win customers in the beginning … but in the end you have to make money to cover your expenses and reward investors.

The thing is that after 10 years, Uber is still very unprofitable. Worse, losses are growing at astronomical levels.

Last year it lost $ 1.8 billion … while last quarter it lost a hefty $ 5 billion .

To put this in perspective …

In its IPO, Uber raised $ 9 billion …

… five of which have already burned. IN A SINGLE QUARTER.

As I wrote in May, Uber loses 25 cents for every dollar it brings in and an average of $ 1.20 on each trip.

It burns money so fast that they lost more during the nine months leading up to the IPO than Amazon did in the first seven years!

Now, here's simple math.

If you lose money as a business, you have two options: cut your expenses or increase your prices.

Uber's biggest expense is driver salary. It pays back to drivers about 80% of all the money it generates.

That means to turn the winnings, Uber has to cut the driver's salary … or raise the prices.

And as I will explain, nothing is possible either.

Days before Uber's IPO, Uber drivers boycotted the company and turned off the app …

They marched the streets in protests demanding higher wages and better working conditions.

Uber drivers now & nbsp; earn an average of $ 10 to $ 12. an hour in the US after spending, according to researchers.

It is not surprising that they are unhappy. The current salary is almost on a par with the federal minimum wage.

Uber has no room to cut the driver's salary. The drivers would just quit or migrate to Uber's competitors.

Now, if you lose money and can't cut your expenses, the only option is to raise prices.

The problem is that Uber is in a deadly position where it can't go its prices.

An endless price war with Lyft …

The United States is Uber's largest and most profitable market. But here it is a big challenge.

You've probably heard of Lyft, Uber's largest competitor in the United States.

These two companies have been fighting each other in price wars for years to undermine taxi prices and steal customers from each other.

It is estimated that they have lost & totaled $ 13 billion … and both still have no roadmaps for profitability.

In other words, Uber is trapped in a price war with Lyft.

As I will explain later, the moment Uber raises prices, customers will switch to Lyft or another competitor.

But Uber's competition problems do not end here …

Uber can't keep up with cutting truck competition overseas …

Another way Uber could increase profits would be to grow globally.

But here, Uber's potential customers still look porridge.

Bolt, an Estonian-based ride-sharing company, is taking over Europe quickly. In many European cities, it's already a # 1 tour app.

It is a heavy blow to Uber's growth potential in Europe.

London, for example, has been one of the largest and most profitable markets for Uber. For years, Uber enjoyed zero serious competition in this city. Now it has Bolt.

Elsewhere, Uber has already lost the battle with local competitors:

It has left Russia after losing the battle with Yandex.Taxi …

It has left China after losing the battle with DiDi … [19659003] And it has left Southeast Asia after losing the battle with Grab and Go-Jek.

Southeast Asia accounts for more than 70% of the global riddle market.

And these competitors are not just a local problem. Just like Uber, they have set their sights on the global market.

Take Brazil, where Uber has an 80% market share. It could be a money-making machine for Uber. And yet the company & nbsp; money in Brazil because it is fighting a price war with China's riddle giant DiDi.

It's a race to the bottom, forcing Uber to keep prices low and marketing costs high.

Uber customers don't care about Uber …

Would you take a trip with Uber if it cost twice as much as Lyft? That's how much Uber needs to raise prices to start making money.

Probably not …

That's because Uber's app is no different from its competitors. It has no customer loyalty whatsoever.

In fact, more than 34% of people in the United States use ride-hailing services for both apps, Lyft and Uber. This is up 50% + from two years ago, according to Vox.

Many switch back and forth between Uber and Lyft, choosing any one for a better price at the moment.

And with its tough competitors charging roughly the same or lower prices, this makes it impossible for Uber to raise prices.

Meanwhile, Uber is losing its market share not only globally but also in the US, which you can see in the overview above.

Let me say this more time: It's a race to the bottom.

Uber is not worth more than $ 20 / share

Uber is currently trading for 4X sales. In short, this means that Uber's value is 4 times greater than annual sales.

For perspective, it's more expensive than Amazon or Apple.

My research shows that 3X sales are a reasonable price if we are really generous. [19659003] The problem is that with 3X sales, Uber is not worth more than $ 20 to $ 22 / share. And it is currently 30% below the price.

That's where I see the stock going in the coming years.

Get my report & nbsp; "The Great Disruptors: & nbsp; 3 Breakthrough Shares Set to Double Your Money" . & Nbsp; These stocks will give you 100% gain when they disrupt entire industries. & Nbsp; Get free copy here.

">

"Never get in cars with strangers …"

Did your parents tell you when you were little?

These days, people come in cars with strangers all the time … only they use a smartphone "App" to match them with a specific stranger to drive them around.

As you may have guessed, I refer to Uber, the world's largest wrestling company.

It's like a taxi company except it doesn't own cars. It also has no drivers. Instead, it runs an app that connects drivers with people who need a ride.

Since 2009, Uber has grown into a $ 100 billion company. It has become so large and popular that it is difficult to imagine the world without it.

Hardly anyone "takes taxi" anymore. All “Ubers”…

The Most Hyped IPO Since Facebook…

After years of extraordinary growth, Uber launched an IPO on May 10.

An IPO, as you may know, is when a company first sells shares in the public markets. It marks the first time individual investors can buy the stock.

Uber's debut in the stock market was one of the most hyped economic events since Facebook went public in 2012.

It was on every financial television. The headlines screamed "this is the next Facebook."

Everyone was talking about it … I even heard stories of people who put half their savings into this single stock.

I understand, Uber is a colossal technology company that has become part of everyone's life.

It has changed the way we commute. It even disturbed the culture.

Who would have thought that we would take trips from strangers in their personal cars on a regular basis?

But while Uber is a disruptive company, it's a terrible business … and the stock is a terrible investment.

You don't need a master's degree in business to understand this …

Ultimately, every business must make more money than it spends. Period.

Yes, you can sacrifice profits to win customers in the beginning … but in the end you have to make money to cover your expenses and reward investors.

The thing is that after 10 years, Uber is still very unprofitable. Worse, losses are growing at astronomical levels.

Last year it lost $ 1.8 billion … while last quarter it lost a hefty $ 5 billion .

To put this in perspective …

In its IPO, Uber raised $ 9 billion …

… five of which have already burned. IN A SINGLE QUARTER.

As I wrote in May, Uber loses 25 cents for every dollar it brings in and averages $ 1.20 on each trip.

It burns money so fast that it lost more in the nine months that went up for listing than Amazon did in the first seven years!

Now, here's simple math.

If you lose money as a business, you have two options: cut expenses or raise money prices.

Uber's biggest expense is driver salary. It pays back to drivers about 80% of all the money it generates.

That means to turn the winnings, Uber has to cut the driver's salary … or raise the prices.

And as I will explain, nothing is possible either.

Days before Uber's IPO, Uber drivers boycotted the company and shut down the app …

They marched the streets in protests demanding higher wages and better working conditions.

Uber drivers now earn, on average, $ 10 to $ 12 an hour in the United States, according to researchers.

It is not surprising that they are unhappy. The current salary is almost on a par with the federal minimum wage.

Uber has no room to cut the driver's salary. The drivers would just quit or migrate to Uber's competitors.

Now, if you lose money and can't cut your expenses, the only option is to raise prices.

The problem is that Uber is in a deadly position where it can't go its prices.

An endless price war with Lyft …

The United States is Uber's largest and most profitable market. But here it is a big challenge.

You've probably heard of Lyft, Uber's largest competitor in the United States.

These two companies have been fighting each other in price wars for years to undermine taxi prices and steal customers from each other.

It is estimated that they have lost a total of $ 13 billion … and both still have no roadmap for profitability.

In other words, Uber is trapped in a price war with Lyft.

As I & # 39; I will explain later, the moment Uber raises prices, customers will switch to Lyft or another competitor.

But Uber's competition problems do not end here …

Uber can't keep up with cutting truck competition overseas … [19659010] Another way Uber could increase profits would be to grow globally.

But here, Uber's potential customers look even weaker.

Bolt, an Estonia-based mediation company, is taking over Europe quickly. In many European cities, it's already a # 1 tour app.

It is a heavy blow to Uber's growth potential in Europe.

London, for example, has been one of the largest and most profitable markets for Uber. For years, Uber enjoyed zero serious competition in this city. Now it has Bolt.

Elsewhere, Uber has already lost the battle with local competitors:

It has left Russia after losing the battle with Yandex.Taxi …

It has left China after losing the battle with DiDi … [19659003] And it has left Southeast Asia after losing the battle with Grab and Go-Jek.

Southeast Asia accounts for more than 70% of the global riddle market.

And these competitors are not just a local problem. Just like Uber, they have set their sights on the global market.

Take Brazil, where Uber has an 80% market share. It could be a money-making machine for Uber. And yet the company is bleeding money in Brazil because it is fighting a price war with China's riddle giant DiDi.

It's a race to the bottom, forcing Uber to keep prices low and marketing costs high.

Uber customers don't care about Uber …

Would you like to take a trip with Uber if it costs twice as much as Lyft? That's how much Uber needs to raise prices to start making money.

Probably not …

That's because Uber's app is no different from its competitors. It has no customer loyalty whatsoever.

In fact, more than 34% of people in the United States use ride-hailing services for both apps, Lyft and Uber. That's a 50% + increase from two years ago, according to Vox.

Many people switch back and forth between Uber and Lyft, choosing any one that offers a better price at the moment.

same or lower prices, this makes it impossible for Uber to raise prices.

Meanwhile, Uber is losing its market share not only globally, but also in the United States, as you can see in the table above.

Let me say this again: It's a race to the bottom.

Uber is not worth more than $ 20 / share

Uber is currently trading for 4X sales. In short, this means that Uber's value is 4 times greater than annual sales.

For perspective, it's more expensive than Amazon or Apple.

My research shows that 3X sales are a reasonable price if we are really generous. [19659003] The problem is that with 3X sales, Uber is not worth more than $ 20 to $ 22 / share. And it is currently 30% below the price.

That's where I see the stock going in the coming years.

Get My Report "The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money" . These stocks will give you 100% gain when they disrupt entire industries. Get your free copy here.


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