3 Reasons Why Uber Strikes Out in Ridiculous Ploy to Be Amazon 2.0
Uber CEO Dara Khosrowshahi misses the mark when he compares cars to books. | Source: (i) Frederic Legrand - COMEO / Shutterstock.com (ii) Drew Angerer / Getty Images / AFP ; Edited by CCN.com
By CCN.com: Uber is priming investors for its much-vaunted IPO, but there’s a severe problem. Namely, this problem is that Lyft IPO was a complete disaster and Uber is tarred with the same ride-share brush. To avoid the stigma, the Uber team is seeking an alternative comparison, with the wildly successful Amazon. In honor of this blatant misdirection tactic, here are three reasons why “UBER” is nothing like AMZN.
1. Uber Doesn’t Have Unique Projects (Or Profits)
Similar to Amazon, Uber is losing money headed into its IPO, but this is where the similarities end. Amazon evolved into a behemoth that could reach into every corner of your life. They have a side business called Amazon Web Services (AWS) that you probably don’t know about, which incidentally is wildly profitable . Where is Uber’s AWS? Self-driving technology? Well, maybe if they can take out Waymo, Lyft, Tesla, and practically every other car company on the planet. Paul Meeks of the Wireless Fund told CNBC :
“They’ll try to leverage their platform into other things, but the other things will be transport because that’s their gig and the transport business has a lot of established players.”
So without a competitive advantage, they are back to being a taxi service with an app that loses money. How much money can you make out of Uber Eats? There are dozens of food-delivery apps, and they all provide virtually the same service. Obviously, ride-sharing isn’t unique either. Uber Freight takes us on to point No. 2.
2. Uber Is Locking Horns With Amazon
If you want to be like Amazon, then you have to be prepared to divide and conquer. Yes, you are losing billions, but you are pumping cash-burn into projects with tremendous upside . Well, Uber’s plans to go after transport logistics have put them straight into the path of the disruptor in chief, Jeff Bezos. If there is one company you don’t want to get into a standoff with its probably Amazon. Today they announced a freight brokerage service that caused the shares of other logistics companies to plummet . Perhaps investors are taking note of this ahead of the Uber IPO. Additionally, Amazon plans to launch an “Uber for trucking app.” The mere fact that it has Uber in its description shows you precisely who they are trying to quash here.
3. It’s all part of the IPO “Hard Sell” Strategy
Here is Uber CEO Dara Khosrowshahi attempting to sell the Amazon comparison in a NY Times article:
“Cars are to us what books were to Amazon. Just like Amazon was able to build this extraordinary infrastructure on the back of books and go into additional categories, you are going to see the same from Uber.”
This is obviously a marketing tactic that will likely fall flat. The overvaluation of Lyft has burned many investors and sparked a lot of anger. It’s clear that Uber has a lot at stake and is protecting their interests here. It’s true that Amazon cared more about customers than Wall Street. But you can’t help but feel like Uber is just telling us they care about customers to please potential investors. Driver’s are already unionizing and forcing higher wages, which could hit either demand or the bottom line.
AMZN’s market cap is $955 billion, Lyft’s is $17 Billion, and Uber wants to be around $90 Billion . The last word goes to Mr. Bezos :
“You can be two sizes: You can be big, or you can be small. It’s very hard to be medium.”
