# Uber potential ipo



## KMANDERSON (Jul 19, 2015)

PUBLIC PROBLEMSLast year, Uber lost $3 billion. By 2020, it wants to IPO. Here’s what it has to solve first

Josh Horwitz 

5 hours ago

Time to get serious. (Reuters/Lucas Jackson)

Dara Khosrowshahi has only been Uber’s CEO for a few days, and he’s already pulling 180-degree turns on his predecessor, Travis Kalanick. At his first all-hands meeting, he announced that the ride-hailing company could go public in about 18 to 36 months(though he set no firm deadline). Some Uber investors likely breathed a sigh of relief, as Kalanick had famously said in March last year that Uber would delay its IPO “as late as possible.”

Yet an IPO also means that Uber, which has disrupted the taxi industry worldwide since its launch in 2011, will finally have to face the music for some of the business and legal problems that have mounted up—notably, growing competition from rivals and disputes over driver pay. Here are some questions it will have to answer before its shares start trading in New York.

How can Uber reduce its losses without losing market share?

With an IPO pending, is the era of cheap Uber rides over?

Uber expanded quickly around the world by throwing discounts at customers and bonus incentives at drivers. Compounded with its already cheap prices (UberX, its flagship tier, in which drivers use their own personal cars, is typically priced at three-quarters the cost of a local taxi), these tactics have forced Uber to swallow large losses—about $3 billion in 2016 alone.

It certainly wouldn’t be the first unprofitable tech company to go public. But investors will want signs those losses are shrinking. That means cutting back on the discounts and bonuses that made it popular. To its credit, its early efforts on that front look successful—adjusted net losses fell 14% annually during the second quarter of 2017, while gross bookings doubled over the same period.

But slashing those schemes even further or—gasp—raising prices could cause Uber to lose precious market share. That’s especially true in the US, which is probably (the company hasn’t released regional revenue data) its biggest and most lucrative market. In the face of public backlashes against its surge pricing, treatment of drivers, and corporate sexism scandals, it has started to lose ground (paywall) to local rival Lyft. Khosrowshahi reportedly said that stopping this decline is the company’s most important task.

There are two ways it can do this, and neither is great. It could squeeze drivers further by taking a bigger cut of each ride, but that could make drivers quit or switch to Lyft. Or it could raise its prices, and risk losing consumers. It will have to choose.

Is it worth burning cash to compete with rivals in poor countries?

Of course, another way to reduce losses is to duck out of places where the numbers don’t add up.

One obvious candidate for an Uber retreat is Southeast Asia, where the company faces an intense battle with Singapore-based Grab (and arguably also competes with Jakarta’s Gojek, which offers motorbike rides on-demand). Soon to be armed with $2.5 billion in funding, Grab has aggressively courted drivers and riders with generous discounts (paywall). The already cheap taxi prices in most of Southeast Asia ensure that margins will remain low—perhaps so low that they’re not worth a subsidy battle.

If it’s really struggling in the US, Uber might also consider withdrawing from India, where trip prices are also low and another domestic rival, Ola, is competing for passengers. However, Ola’s recent fall in valuationsuggests that Uber retains an upper hand.

A withdrawal wouldn’t be unprecedented for Uber—it sold its China business to rival Didi Chuxing and merged with domestic giantYandex.Taxi in Russia. If investors get anxious, another such merger might be in the works.

How can Uber keep investors calm with all these lawsuits?

Uber has had tense relations with the authorities in nearly all of its cities to some degree. However, two legal battles in particular could complicate its eventual listing.

The first is a set of class-action lawsuits filed by Uber drivers in the US who argue they should be classified as employees rather than independent contractors. If they win, Uber will have to offer them benefits and set wages, which will cost it more than just giving them a percentage of each fare. The second is a lawsuit filed by Waymo, Alphabet’s self-driving car subsidiary, which alleges that Uber stole its trade secrets.

Ben James, a Hong Kong-based partner at law firm Kirkland & Ellis, says these issues likely won’t be enough to bar Uber outright from an IPO. Instead, the Securities and Exchange Commission will merely require the company to list them in its prospectus. However, he adds, if Uber goes public with the cases unresolved, they could hinder the company’s ability to raise capital. “It’s certainly in their benefit to clean up as many outstanding legal issues as they can so investors don’t factor that into the price they’re willing to pay,” he says.


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## SEAL Team 5 (Dec 19, 2015)

An Uber IPO? Give every driver the opportunity to invest in Uber stock prior to the public and the drivers will lose even more money. Uber is now losing market share to Lyft every quarter. Uber will be worthless in 2 more years.


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## KMANDERSON (Jul 19, 2015)

SEAL Team 5 said:


> An Uber IPO? Give every driver the opportunity to invest in Uber stock prior to the public and the drivers will lose even more money. Uber is now losing market share to Lyft every quarter. Uber will be worthless in 2 more years.


I guess it depends on what market you are in but lyft a joke.They are not going to overtake uber. I wish another rideshare company would come along to wipe both uber and lyft out of bussiness


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## Ca$h4 (Aug 12, 2015)

Remember a short time ago when Uber Emperor Kalanick would proclaim "driverless cars" in 2 or 3 years? Or Flying cars in 2 or 3 years? We have the same PROFITLESS PROCLAMATION now from (Uber Shah-Ayatollah) Khos row shah i. (4 syllable tongue twister). PROCLAMATION: 2 or 3 years til IPO. TOMORROW.


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## SEAL Team 5 (Dec 19, 2015)

KMANDERSON said:


> I guess it depends on what market you are in but lyft a joke.They are not going to overtake uber. I wish another rideshare company would come along to wipe both uber and lyft out of bussiness


Be careful what you wish for. Too much competition would mean lower rates, no surges, no prime time.


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## rembrandt (Jul 3, 2016)

KMANDERSON said:


> I guess it depends on what market you are in but lyft a joke.They are not going to overtake uber. I wish another rideshare company would come along to wipe both uber and lyft out of bussiness


The real area of competition will not be about the fare ; it will be about the commission/ service fees that Uber/Lyft is charging to drivers. There are plenty of investors with enough fund out there waiting to enter the competition but not willing to burn cash in subsidies. They want Uber/ Lyft to die of bleeding and that will eventually happen.


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## KMANDERSON (Jul 19, 2015)

SEAL
[QUOTE="SEAL Team 5 said:


> Be careful what you wish for. Too much competition would mean lower rates, no surges, no prime time.


I think they spend to much money trying to take the other out of bussiness.Both are losing lot of money.We hear of uber losses but I bet lyft are just as bad.There is probably a company out there waiting for them to go under.My guess would be gett the company that bought juno.They are a big rideshare company in Europe and are just in new York now from what I understand.


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## majxl (Jan 6, 2017)

No matter how much Uber and others can raise the rates, starve more the drivers, add more cars or less cars, spend millions on autonomous cars or planes and other experiments, the bottom line is that FHV transportations companies are inefficient and their business structure will not permit them to be profitable.


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## Seinfeld (Apr 11, 2014)

I'm anxious to see where the market really values Uber. In 18-36 months autonomous cars will be a lot more of a reality.


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## UsedToBeAPartner (Sep 19, 2016)

Uber IPO. Don't buy. It will drop by at least 1/2 in the first few months and then it's time to buy. You won't make money for a long time but those who got in "not too early but not too late" will make a fortune. Look at the FB and similar IPO and you will know that you "can" make money. You just can't make money unless you are among the privileged few who get to buy the IPO at the IPO price and not the 1st price offered to us commoners.


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## phillipzx3 (May 26, 2015)

SEAL Team 5 said:


> Be careful what you wish for. Too much competition would mean lower rates, no surges, no prime time.


This is what happened in Portland. Now we have 10,000 Uber/Lyft drivers who can't figure out why they can't make money short of working 12 plus hours a day. In comparison, the city only allows ~1300 legal (with city permits) cabs.

On the plus side, there are a lot of low mileage ex-Uber/Lyft Prius rigs for sale at the local auctions.



majxl said:


> No matter how much Uber and others can raise the rates, starve more the drivers, add more cars or less cars, spend millions on autonomous cars or planes and other experiments, the bottom line is that FHV transportations companies are inefficient and their business structure will not permit them to be profitable.


Ya.....so inefficient they're spending billions per year trying to put Uber out of business. Oh wait. I have that backwards.

All Uber has over cabs is billions in investor money to hand out subsidizing riders and drivers. Without the subsidies, Uber and Lyft would have gone belly up years ago.


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## unPat (Jul 20, 2016)

It Uber goes public it's a buy regardless of how it treats it drivers.


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## KMANDERSON (Jul 19, 2015)

unPat said:


> It Uber goes public it's a buy regardless of how it treats it drivers.


But at what valuation?No way they are a 69 billion dollar company.


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## george manousaridis (Jan 27, 2017)

KMANDERSON said:


> PUBLIC PROBLEMSLast year, Uber lost $3 billion. By 2020, it wants to IPO. Here's what it has to solve first
> 
> Josh Horwitz
> 
> ...


interesting points from your neck of the woods,extremely intelligent KManderson,thank you for this thread



george manousaridis said:


> interesting points from your neck of the woods,extremely intelligent KManderson,thank you for this thread


this is why this Forum is so perfect,we Uber drivers that have come and gone and are still here are connected indirectly,thus your wonderful insights and analysis from your end of the world.Keep up the perfect threading,its members like you that are the heart of the forum and Uber,past,present and future.


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## unPat (Jul 20, 2016)

Groupon who sold coupons was valued at $13 billion. Uber's losses right now don't matter. Every startup loses money at the beginning. But they make millions of profit without any actual goods. No matter how bad it is for drivers, it's a great investment for investors.


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## KMANDERSON (Jul 19, 2015)

unPat said:


> Groupon who sold coupons was valued at $13 billion. Uber's losses right now don't matter. Every startup loses money at the beginning. But they make millions of profit without any actual goods. No matter how bad it is for drivers, it's a great investment for investors.


They have to figure out a way to be profitable before it a great investment.It was great in the beginning,but is it grateful now?Will they continue to grow our are they at there ceiling.


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## Lowestformofwit (Sep 2, 2016)

KMANDERSON said:


> The have to *figure out a way to be profitable before it a great investment*. It was great in the beginning, but is it grateful now?Will they continue to grow our are they at there ceiling.


IT in a nutshell.
A lot of shareholders (private and institutions) buy in the expectation of long term regular dividends, derived from profits; not everyone is a trader, hoping for capital gain.
In either case, it might be quite a while before any investor sees a return (if any) on their money.


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## Oscar Levant (Aug 15, 2014)

KMANDERSON said:


> PUBLIC PROBLEMSLast year, Uber lost $3 billion. By 2020, it wants to IPO. Here's what it has to solve first
> 
> Josh Horwitz
> 
> ...


Uber stock? Better short that sucker


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## itsablackmarket (May 12, 2015)

Who still takes Uber seriously? IPO? Haha.. Good joke


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## TwoFiddyMile (Mar 13, 2015)

Uber IPO:
Initial
Puke 
Offering.


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## everythingsuber (Sep 29, 2015)

And the Titanic will be arriving in New York in a few days.


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## roadman (Nov 14, 2016)

with every thing i know about Uber I would definitely short the stock. I can only imagine what shady stuff has happened that I don't know about.


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## Nats121 (Jul 19, 2017)

KMANDERSON said:


> PUBLIC PROBLEMSLast year, Uber lost $3 billion. By 2020, it wants to IPO. Here's what it has to solve first
> 
> Josh Horwitz
> 
> ...


Clueless and lazy reporting.

The reporter should do his job, and find out the huge cut Uber gets on every ride, with their huge booking fee and Upfront/Route Based Pricing scams.

Driver bonuses? Cheap prices?

How does anyone know Uber is truly losing $3 billion. And if they're losing $3 billion how and where are they losing that money?

Overseas reversals? Self-driving cars and other boondoggles?

Because they're a private company, they have no legal obligation to reveal anything about their finances to the public, nor be truthful about what they reveal.

With the gigantic cut Uber is taking from each ride and delivery, as well as large price increases, it doesn't seem feasible they could be losing money on their American rideshare part of the business, unless there's wastefulness that would put the US govt to shame and/or outright theft occurring.


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## everythingsuber (Sep 29, 2015)

Nats121 said:


> Clueless and lazy reporting.
> 
> The reporter should do his job, and find out the huge cut Uber gets on every ride, with their huge booking fee and Upfront/Route Based Pricing scams.
> 
> ...


There was never any real margin in running taxi's. The value was always the capital gain on the medallion/license. Every driver that leaves costs Uber money to replace and that's with a 94% turnover every 12 months. While drivers can earn more at McDonald's and Walmart Uber is going to spend a fortune replacing them.


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## TwoFiddyMile (Mar 13, 2015)

everythingsuber said:


> There was never any real margin in running taxi's. The value was always the capital gain on the medallion/license. Every driver that leaves costs Uber money to replace and that's with a 94% turnover every 12 months. While drivers can earn more at McDonald's and Walmart Uber is going to spend a fortune replacing them.


Lol. I cleared 6 figures a year operating 5 cabs. Not saying it was a fortune, just that there's profit if you know what you're doing.
And our medallions had no value.


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## ChortlingCrison (Mar 30, 2016)

SEAL Team 5 said:


> Be careful what you wish for. Too much competition would mean lower rates, no surges, no prime time.


HMmm, according to uber ... Lower rates= more fares = more fares = more $$$$


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## Lowestformofwit (Sep 2, 2016)

ChortlingCrison said:


> HMmm, according to uber ... Lower rates= more fares = more fares = more $$$$


"If a lie is told often enough, eventually it will pass for the truth".
Except that one.


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## SEAL Team 5 (Dec 19, 2015)

ChortlingCrison said:


> HMmm, according to uber ... Lower rates= more fares = more fares = more $$$$


That's right, but the "more $$$$" is really drivers spending more $$$$ on gas, insurance and maintenance.


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## Nats121 (Jul 19, 2017)

everythingsuber said:


> There was never any real margin in running taxi's. The value was always the capital gain on the medallion/license. Every driver that leaves costs Uber money to replace and that's with a 94% turnover every 12 months. While drivers can earn more at McDonald's and Walmart Uber is going to spend a fortune replacing them.


Of course there was a margin running taxis. In most places in the US, there are govt-enforced taxi monopolies and cartels, with virtually guaranteed profits, assuming the management was even halfway competent. Rideshare has threatened that.

It doesn't cost Uber a fortune to replace drivers, especially now.

The vast majority of the money Uber spends on replacement drivers is recruitment advertising, and it's well worth it, considering the fortune Uber is saving with the pathetic pay rates the drivers get.

When the pay rates were much higher, driver turnover was very low.

Uber's goal is to gradually replace the full time drivers with large numbers of part timers, who unlike the full timers, won't give Uber headaches with protests and lawsuits.

Uber and Lyft count on a continuous flow of large numbers of third world immigrants to provide them with a reliable source of replacement drivers.


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## ChortlingCrison (Mar 30, 2016)

They also rely heavily on bleeding investors for more money.


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## Nats121 (Jul 19, 2017)

everythingsuber said:


> There was never any real margin in running taxi's. The value was always the capital gain on the medallion/license. Every driver that leaves costs Uber money to replace and that's with a 94% turnover every 12 months. While drivers can earn more at McDonald's and Walmart Uber is going to spend a fortune replacing them.





ChortlingCrison said:


> They also rely heavily on bleeding investors for more money.


We don't know how much "bleeding" is occurring because we can't see the books. Meanwhile, the valuation of this supposedly "bleeding" company is over $60 billion.


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## tomatopaste (Apr 11, 2017)

Seinfeld said:


> I'm anxious to see where the market really values Uber. In 18-36 months autonomous cars will be a lot more of a reality.


The only reason Uber still has a heartbeat is SDC's. Uber is already charging pax for rides in their test SDC's. House passed the SDC bill this week that allows 100,000 SDC's on the road. Here is a list of companies testing SDC's in California.

As of September 1, 2017, DMV has issued Autonomous Vehicle Testing Permits to the following entities:

(Permit holders are listed by the date the permit was issued)


Volkswagen Group of America
Mercedes Benz
Waymo
Delphi Automotive
Tesla Motors
Bosch
Nissan
GM Cruise LLC
BMW
Honda
Ford
Zoox, Inc.
Drive.ai, Inc.
Faraday & Future Inc.
Baidu USA LLC
Wheego Electric Cars Inc.
Valeo North America, Inc.
NextEV USA, Inc.
Telenav, Inc.
NVIDIA Corporation
AutoX Technologies Inc
Subaru
Udacity, Inc
Navya Inc.
Renovo.auto
UATC LLC (Uber)
PlusAi Inc
Nuro, Inc
CarOne LLC
Apple Inc.
Bauer's Intelligent Transportation
Pony.AI
TuSimple
Jingchi Corp
SAIC Innovation Center, LLC
Almotive Inc
Aurora Innovation
Nullmax
Samsung Electronics
Continental Automotive Systems Inc
All these companies are going to start charging for rides like Uber is already doing, even with the human safety driver behind the wheel. It really doesn't even matter what Uber does. Every ride the pax takes in one of the 100,000 test SDC's is a ride you don't give. SDC's are already here, and will start affecting your earnings very soon. Especially in San Francisco, Phoenix and Pittsburgh.


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## everythingsuber (Sep 29, 2015)

Nats121 said:


> We don't know how much "bleeding" is occurring because we can't see the books. Meanwhile, the valuation of this supposedly "bleeding" company is over $60 billion.


No. The last time anyone seriously looked at its value. Namely softbank it's value had softbank not backed away would have been 40 billion. There are fairly well educated people who put Ubers valuation at closer to 30 billion.
Uber is looking at a down round of of funding to survive when that gets done we will have a better idea of Ubers real worth.

The only people saying Uber is worth 60 billion are those who are trying to protect money already invested.


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## ChortlingCrison (Mar 30, 2016)

Nats121 said:


> We don't know how much "bleeding" is occurring because we can't see the books. Meanwhile, the valuation of this supposedly "bleeding" company is over $60 billion.


Allright if you want to put something in quotations. Instead of bleeding investors they're "screwing them over". Feel free to mock that as well.


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## Nats121 (Jul 19, 2017)

ChortlingCrison said:


> Allright if you want to put something in quotations. Instead of bleeding investors they're "screwing them over". Feel free to mock that as well.


Again, without seeing the books, we don't know how much investors have lost, if anything.

Remember, if an investor's share of Uber has gone up in value over what they paid, then they've made money, not lost it.

Certainly, the early birds like Travis (from $40 million net worth to $6 billion now), same thing for co-founder Garrett Camp $6 billion have profited spectacularly, despite whatever outflow of cash has been spent.

Of course, that's paper wealth, if there is even a slight chance of Uber imploding, Travis,Garrett,etc, would sell plenty of shares before the roof caves in.

If there's a collapse, the newest investors would take the hit, just like any pyramid scheme.


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## uberdriverfornow (Jan 10, 2016)

tomatopaste said:


> The only reason Uber still has a heartbeat is SDC's. Uber is already charging pax for rides in their test SDC's. House passed the SDC bill this week that allows 100,000 SDC's on the road. Here is a list of companies testing SDC's in California.
> 
> As of September 1, 2017, DMV has issued Autonomous Vehicle Testing Permits to the following entities:
> 
> ...


Simply put, who the hell cares ?

The bottom line is that when they finally give a real sdc ride where there is NO driver whatsoever and people see how ridiculously inconvenient they are and how safe they can be then that is going to put the brakes on these ridiculous death traps.

That's what you and all the other sdc advocates don't understand. It's all fun and games until either someone gets killed or people realize how ridiculously inconvenient these things are going to be.

But the real bottom line is that they don't seem to understand that when cars finally start rolling up with no driver whatsoever, how many riders are going to get in these things ? Have you done a real world study asking people on the street if they would get in one of these death traps when it rolls up and it's just the car and you with no driver ? No, I didn't think so.

I can go into all of the reasons that nobody in their right mind should get in these things but you can just sit back and actually think for yourself. When you do, you will realize the same exact thing, these things will never work. Period. End of story.

These aren't sdc's, these are cars with drivers in them that have to be there prevent that car from crashing.


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## tomatopaste (Apr 11, 2017)

uberdriverfornow said:


> Simply put, who the hell cares ?
> 
> The bottom line is that when they finally give a real sdc ride where there is NO driver whatsoever and people see how ridiculously inconvenient they are and how safe they can be then that is going to put the brakes on these ridiculous death traps.
> 
> ...


One of the key selling points is safety. Human error kills 40k in the U.S. alone. The House self driving car bill passed unanimously last week. That means even the dems realize it's going to happen, so we either lead or hand it over to the Euros and Japan



uberdriverfornow said:


> Simply put, who the hell cares ?
> 
> The bottom line is that when they finally give a real sdc ride where there is NO driver whatsoever and people see how ridiculously inconvenient they are and how safe they can be then that is going to put the brakes on these ridiculous death traps.
> 
> ...


Also, they'll be a lot more convenient than owning your own car. Right now how many cars are within half a block of you? 100? You'll never have to wait more than 2 seconds. You'll never have to find parking. You'll order a large SUV when you're in a group or going skiing. I'll cost much less than what you're currently spending on transportation. You'll never have to worry about putting in a new transmission. You'll be able to make use of the time now spent driving by being productive


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## uberdriverfornow (Jan 10, 2016)

tomatopaste said:


> One of the key selling points is safety. Human error kills 40k in the U.S. alone. The House self driving car bill passed unanimously last week. That means even the dems realize it's going to happen, so we either lead or hand it over to the Euros and Japan
> 
> Also, they'll be a lot more convenient than owning your own car. Right now how many cars are within half a block of you? 100? You'll never have to wait more than 2 seconds. You'll never have to find parking. You'll order a large SUV when you're in a group or going skiing. I'll cost much less than what you're currently spending on transportation. You'll never have to worry about putting in a new transmission. You'll be able to make use of the time now spent driving by being productive


Humans + driver assist technology(sdc technology) = safer cars on the road.

You don't go backwards by taking the human out of the car. That doesn't make cars safer, it makes them less safe. This should be common sense.

The idiots that love being distracted will be offset by technology that brakes when those same dumbshits aren't paying attention.

At the same time, those same humans help make up for the sdc shortcomings. Again, this should be common sense.


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## tomatopaste (Apr 11, 2017)

uberdriverfornow said:


> Humans + driver assist technology(sdc technology) = safer cars on the road.
> 
> You don't go backwards by taking the human out of the car. That doesn't make cars safer, it makes them less safe. This should be common sense.
> 
> ...


Driver assist and self driving cars are not the same thing. A fully autonomous self driving car means you can put a two year old in the car by itself and it will arrive at grandmas house better than if a human drove. Self driving cars will be much safer than human driven cars.


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## tomatopaste (Apr 11, 2017)

uberdriverfornow said:


> Simply put, who the hell cares ?
> 
> The bottom line is that when they finally give a real sdc ride where there is NO driver whatsoever and people see how ridiculously inconvenient they are and how safe they can be then that is going to put the brakes on these ridiculous death traps.
> 
> ...


Not everyone has the same risk tolerance. The more adventurous types, like this mother of four, will be the first to try it. After 10 or 20 years of adventurous moms using self driving cars for their transportation, the more risk averse types, like yourself, might be willing to try it.


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## uberdriverfornow (Jan 10, 2016)

tomatopaste said:


> Driver assist and self driving cars are not the same thing


Looks like Captain Obvious is here to save us.

Or more like Travis trying to sell some more naive investors on the pot of gold at the end of the rainbow or, rather, fools gold.



tomatopaste said:


> Not everyone has the same risk tolerance. The more adventurous types, like this mother of four, will be the first to try it. After 10 or 20 years of adventurous moms using self driving cars for their transportation, the more risk averse types, like yourself, might be willing to try it.


Unlike yourself, I have talked to many people about whether they would get into a car that rolls up and there's no driver in it and I have yet to meet someone that would. You can say whatever you want, but until you actually find people willing to get in these things all you're doing is spewing lies and innuendo.


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