
Google Ventures Puts $258M Into Uber, Its Largest Deal Ever - linux_devil
http://techcrunch.com/2013/08/22/google-ventures-puts-258m-into-uber-its-largest-deal-ever/
======
alariccole
This makes perfect sense, and if I had money to invest in this market, I
would. Self-driving cars coupled with such an infrastructure means a very
profitable business in the not-too-distant future.

The highest cost for taxis is not the cars, nor the gas, but the drivers. Get
rid of them, and it's all gravy.

Something like this is most certainly the "mass" transit of the future. It
would be lower cost, more convenient, and would actually pollute less than
buses during non-peak times.

~~~
psbp
It's more than that. Google is interested in the movement of goods and
services and how they can make those transactions more efficient. Google can
umbrella commerce in general and just take a small google tax. It's like
amazon's end game, except a lot more lightweight and uninvested.

~~~
001sky
_Google is interested in the movement of goods and services_

Quite a bit beyond "organizing the worlds information"[!]

~~~
jacobwcarlson
I'd argue those are the same thing.

~~~
acchow
Energy-mass-information equivalence

[http://en.wikipedia.org/wiki/Holographic_principle#Energy.2C...](http://en.wikipedia.org/wiki/Holographic_principle#Energy.2C_matter.2C_and_information_equivalence)

~~~
phreeza
I hope my power company doesn't decide to start charging me per kilobyte.

------
physcab
Uber makes absurd amounts of money. I've had many conversations with drivers
and they claim to be pulling in $35-$45 per hour after uber's 30% cut. I've
talked to drivers who have quit their full time jobs and love it. Some have
said that because the service is so convenient that people have started using
it as a _walking_ replacement, often opting to catch a cab for 5 blocks.
Lastly, many companies have enterprise uber accounts and will happily pay
their employee's $200 cab rides to the airport or even 45 minute drive home.

~~~
graeme
I live in Montreal, so I"ve never been able to use Uber. What makes it
different from a cab?

In Montreal, cab to the airport costs $50. Cab arrives in about 1-2 minutes
most locations, and drives you there as fast as taxis go.

I don't doubt that Uber's great - this is a serious question. How much of a
premium do people pay, and what are the main benefits in cities that already
have developed taxi networks?

~~~
brackin
Uber is 15% cheaper than cabs in the market's their in. So you get your phone
charged, a bottle of water, a nicer car, a lower price, no cards/cash or tips
and you only wait a couple of minutes. Regardless of your location.

It also stops discrimination of location or profile (They can't say they don't
go to X place or not pick you up).

~~~
pkteison
Uber drivers still discriminate on location. When I wanted an SUV near Golden
Gate Park, the first driver assigned to me cancelled the trip, and the second
phoned me to verbally confirm before coming that far.

~~~
mh-
I live a block from GGP and have never had this happen. (I've taken Uber a
couple hundred times.)

I'm not doubting your anecdote, just adding my own. I have definitely had a
handful of disappointing Uber experiences; however, 90%+ have been fantastic.

------
w3pm
"Given the scale of the cash injection, the company might not have to raise
another series round before going public, though a bridge round isn’t
inconceivable."

Why does a company need to raise so-much-money before going public? Isn't the
whole point of "going public" to raise money?

~~~
fpgeek
I'd say that the point of "going public" is to provide liquidity to existing
shareholders (e.g. founders, employees, outside investors). There are other
ways to raise money, if that's all you want.

~~~
backprojection
Sorry, I don't know anything about finance/business. What you say makes some
sense to me, that going public lets initial investors cash out, if they so
wish. But I'm still confused, why not sell public shares from the get-go. Is
it that it's easier to make your case (for investment) to a VC than it is to
Joe public?

~~~
mayukh
Its the bane of quarterly capitalism - once public, management focus is
diverted to managing earnings and increased amount of transparency needs to be
provided for the company's internal operations.

Companies would prefer to stay private (and away from the limelight) while
they're still figuring out product/market fit etc

~~~
paul_f
You really should find product-market fit before you raise any money at all.
However, it seems Uber has found it.

------
perfmode
For those who find this new baffling: Uber operates in the following cities:

    
    
      1 AMSTERDAM
      2 ATLANTA
      3 BALTIMORE
      4 BERLIN
      5 BOSTON
      6 CHICAGO
      7 DALLAS
      8 DENVER
      9 DETROIT
     10 HAMPTONS
     11 HONOLULU
     12 INDIANAPOLIS
     13 JOHANNESBURG
     14 LONDON
     15 LOS ANGELES
     16 LYON
     17 MELBOURNE
     18 MEXICO CITY
     19 MILAN
     20 MINNEAPOLIS
     21 MUNICH
     22 NEW YORK CITY
     23 ORANGE COUNTY
     24 PARIS
     25 PHILADELPHIA
     26 PHOENIX
     27 PROVIDENCE
     28 ROME
     29 SACRAMENTO
     30 SAN DIEGO
     31 SAN FRANCISCO
     32 SEATTLE
     33 SEOUL
     34 SHANGHAI
     35 SINGAPORE
     36 STOCKHOLM
     37 SYDNEY
     38 TAIPEI
     39 TORONTO
     40 WASHINGTON D.C.
     41 ZURICH

~~~
gwynp
I had a look at their careers page - that list will be expanding quite a bit
soon.

------
yapcguy
> "The $258 million is a 86% chunk of Google Ventures’ $300 million dollar a
> year fund, and its unclear as to whether the firm will continue to make such
> sizable investments."

So a towncar hire service, with an app, is worth over $3bn ? Really?!

Maybe there's one or two other metropolitan cities in the US where the taxi
service isn't up to scratch, but where is the growth going to come from?

I doubt whether regulators and taxi unions in London, Tokyo or Hong Kong would
sit idly by when some Silicon Valley kool-aid types come knocking.

~~~
garry
People spend $10B on taxis per year in the United States alone. Smartphone
adoption is going to reach 100%. I think if you put those two together, you
really can't pigeonhole this type of service as "just another Silicon Valley
app."

~~~
samstave
* Build out the technology so that every existing cab service can license and whitelabel

* Build out the service so that Uber is the central dispatch to any ride option based on price - also playing into the whitelabel/building of tech

* Provide Uber a significant fund with which to seek M&As of existing taxi cos all over the place

* Provide an investment sizeable enough to serve as national/global free PR for the service, investment

* Provide an investment large enough to back a significant legal team that can take on any metro taxi service's bitching

* Provide an investment large enough to lobby the hell out of local/national representation

------
lpolovets
A lot of people are commenting about Uber + self-driving cars. What's the
point of Uber if there are self-driving cars? Doesn't the existence of fully
automated, driverless cars kill the value of Uber's driver network while
equaling or surpassing Uber's no-hassle experience?

I think what I'm saying is: if Google actually created a fleet of driverless
cars, would anyone still use Uber?

~~~
siglesias
I think the idea is that you would not have to own, maintain, and park a car
if you could summon one on a whim.

~~~
lpolovets
I definitely get the appeal and the value of that kind of future. It just
feels like "driverless cars + simple Google-made reservation app" would send
Uber's value down to zero. So if driverless fleets of cars are the future that
Google is aiming for, then why invest in Uber? What does Uber currently have
that would still be valuable in that future?

~~~
siglesias
Probably the operational expertise in efficiently getting cars to pick up and
drop off people at arbitrary points throughout a city. They're building that
expertise right now with human drivers.

~~~
acchow
Organizing human operators and delegating machines are expertise that have
almost zero in common.

~~~
siglesias
I'm referring to logistics. I have 3 cars available and a set of 5 passengers,
their coordinates, and their destination coordinates. How do I efficiently
deliver these 5 passengers that minimizes their wait time and travel distance?

Please explain how it makes a difference whether humans are operating the
vehicles or whether they are self driving. In either case a larger network is
making the pickup, dropoff and navigation decisions, not the driver.

~~~
acchow
I humbly propose that if you have perfect agents, picking up 5 people with 3
cars is an incredibly simple problem.

It's only difficult because Uber has to deal with humans - will their cell
phone be charged? Will they hear the notification on their phones? What if
they forgot to indicate that they've taken the rest of the day off? What if
they claim to be available but are actually in the restroom at a fast food
restaurant? It's supposed to be a 6 minute drive but what if they make a wrong
turn? What if they glance quickly at the map of where they're supposed to go
but saw it wrong, then muted the turn-by-turn so they could blast some daft
punk? Working with human agents is hard.

If you have always-online self-driving cars, then you've already done the hard
part. Directing them where to go is trivial.

~~~
siglesias
Since when was traveling salesman trivial?

I'm only using 5 people with 3 cars as an example. In reality it's hundreds
upon hundreds of people and proportionally fewer cars. I understand there are
challenges with dealing with humans that will disappear when we switch to
robots, but I can't see the API changing very much. The concept of a vehicle
network, customers, app, doing clever things to anticipate traffic and
customer desires on certain days, all of these things take (I would imagine)
years to understand and optimize.

Your claim that operating such a network with humans versus robots, on a
logistical (API) level, have "almost zero in common" is rather brash.

~~~
IanCal
Travelling salesman isn't that hard when you 1) scale it down and 2) add in a
load of constraints.

Also, the travelling salesman problem is hard because you're looking for _the
best_ solution not a _good_ solution. A good one is pretty easy.

------
greendata
Regulation is the biggest obstacle with Uber. The Taxi services have the city
regulators in their pockets. Google, with their influence and money, may help
solve Uber's biggest issue.

~~~
arsenerei
It looks likely to not be a problem in California shortly.

[http://techcrunch.com/2013/07/30/california-regulator-
propos...](http://techcrunch.com/2013/07/30/california-regulator-proposes-new-
ride-sharing-rules-in-a-victory-for-uber-lyft-and-sidecar/)

~~~
gojomo
The federal FTC has also indicated it considers some of the state/local
transport regulatory regimes anti-competitive, though it's not clear they have
any legal authority to interfere with local determination.

------
subdane
Live in New York, think Uber is both more expensive and less convenient than
just hailing a cab and I never use it. They seem to want to skim money from
cabbies. I was also particularly appalled by their jacking up their prices
during Hurricane Sandy. Their one killer feature - being able to see your
car's arrival status on your phone, will be a commodity soon enough. Company
won't exist in 5 years.

------
dcpdx
Love Uber. After using it for over a year, just had my first negative
experience this past weekend in SF when the UberX driver had no clue how to
get from SOMA to Ocean Beach. I left negative feedback and in a few hours got
a response from one of their customer experience folks apologizing for the
poor service and refunding my money for the trip. Service like that is why
I'll always choose Uber over alternatives like Lyft, Sidecar, etc.

------
mistercow
I can't help but wonder if it might have been wise for them to wait until they
had widespread approval and adoption of self-driving cars. Completely
disrupting mass transit will threaten a very large number of people's bottom
lines, and many of those people have the ability to make things difficult for
Google. Not least among these are auto manufacturers.

~~~
psbp
This is an angel investment. Google is bolstering Uber, not competing
directly.

~~~
mistercow
Even so, I wonder if they might do better not to draw attention to the
disaster that "easy car sharing (or similar concepts)" \+ "self-driving car"
could be for car sales. Maybe I'm underestimating car companies in assuming
that the haven't already anticipated this (although in that case, why aren't
we seeing resistance), or maybe Google holds them in even lower esteem.

~~~
chromaton
My guess is that the car companies haven't figured this out. It takes two
steps of reasoning: 1. Figuring out that self-driving cars are practical in
the medium term and 2. Figuring out that widespread availability of self-
driving cars means that people might not want to own their own.

~~~
mistercow
Here's hoping that they, like many others before them, flinch away from the
mental pain of noticing that their business model is about to crumble until
it's too late.

------
ovoxo
So, you do all realize that this was an investment (of less than 10%) and not
an acquisition right? Everyone here is talking about how this plays right into
Google's plans - no. With their stake, Google does not have enough leverage to
direct what direction Uber should be moving in.

------
onedev
You know what, Uber is awesome. Congrats to those guys and gals.

I think Uber will evolve to become a service that even regular people can use,
not just a speciality service for the relatively wealthy tech community
(though it is necessary to start out as such; ala Tesla). I also think that
taxis aren't the only thing that it will offer in the future. There is a
wealth of potential for what they can do. They sometimes do fun one-off Ubers
like Helecopters or Ice Cream Trucks which don't quite capture this potential
but shows us that they realize that there's much more to experiment with and
that they're not afraid to experiment.

Imagine when we have self driving vehicles (which, incidentally Google is
helping develop).

~~~
dailyrorschach
I'd say that among people who take cabs, not necessarily wealthy, Uber is
growing fantastically in some markets. Here in DC - almost everyone I know
prefers and uses Uber now.

~~~
mattmcknight
Uber in DC is under attack from the government.

"DCTC passed a new set of regulations which bans mid-sized, fuel-efficient
vehicles from being hired, as well as places color restrictions on those
cars."

[http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-
co...](http://www.wjla.com/articles/2013/08/uber-and-d-c-taxicab-commission-
square-off-in-new-fight-92966.html)

~~~
dailyrorschach
I think Uber is pretty safe in DC.

UberX is under attack in DC. The Limo/livery (black car and SUVs) businesses
is now well protected by DC law and the definitions passed earlier this year.
The DCTC rules will classify the UberX hybrid vehicles as Sedans and subject
to the new rules. However, Uber has secured enough allies in the DC Council,
including the DC Transportation CMTE Chair.

I've watched this fight play out a few times now, and I think the worst case
scenario is no UberX through the end of 2013 prior to the next set of DCTC
rule-making or council intervention. Uber rightly gins everyone up in DC about
these issues, but the truth is they've done a great job in this market
attracting the right allies and have been consistently winning their battles.

------
malandrew
It would be awesome if they next look at Lit Motors or a similar safe 1-2
person pod. Lit Motors + Über + Self-driving cars is total win. Once you get
rid of the driver all you really need are 1-2 seats for most black car service
and taxi rides

------
qntmfred
self-driving taxis, here we come

~~~
yoshyosh
This is interesting because if we think, 100 years from now, on demand
transportation could be the most efficient way to go. Now Lyft, Uber's biggest
threat, has been winning market share by being the ride for the common man and
focusing on community. If that is Lyft's biggest strength, what happens to
Lyft when self driving taxis are the most obvious solution to transportation.

------
deegles
The current business models of transportation startups like Uber, Lyft,
Sidecar and Car2Go are merely a stepping stone to something much greater. It's
only a matter of time before self-driving car technology is developed enough
to be deployed widely. It seems clear to me that Google's investment in Uber
is their way to guarantee access to a large fleet of vehicles and an
established brand. The next 10-15 years are going to be very interesting :)

------
cheez0r
Anyone else see Google lining up Uber to get bought, so that they can
consolidate Uber with their self-driving car to provide an on-demand taxi
service?

------
cwilson
Is it not weird that Google Ventures also invested in Sidecar? Isn't that a
conflict of interest?

~~~
fsckin
Sounds like they're betting on two horses in the race.

------
flyinglizard
This is an incredible move on Google's part. Uber can be seen as the physical
arm of Google in meatspace; imagine having your flight information come up in
Google Now with a button to summon an Uber car.

I look into the future and I primarily see "Google".

~~~
ngoel36
From my understanding, Google and Google Ventures are 100% independent.

~~~
gojomo
I've seen alternate stories about GV which seem to want to have it both ways –
some that imply an ability for GV to bring in Google staff/expertise to help
investments, and others vaguely implying a more strict separation.

This page...

[http://www.googleventures.com/investing](http://www.googleventures.com/investing)

...touts "Uparallelled Access to Google", and supposedly GV won its share in
Uber's round with the help of direct lobbying from Larry Page.

So GV may be ostensibly empowered to seek return without regard to Google's
other objectives... but it doesn't appear there's a "Chinese Wall". If
theoretically the GV partners wanted to do something Larry Page absolutely
didn't want, I'm not sure I'd bet on the GV partners having their way.

------
benologist
This year will be remembered as the first year TechCrunch failed to break any
major stories.

------
psbp
A big piece of google's continued growth is going to be in mobile commerce.
Take offers, maps, search and self-driving cars and put them into an
amalgamated new product. Google's future is an ecological approach.

------
candybar
I'm surprised not to see anyone mention this but a large taxi service for
Google can become a huge competitive advantage if it can be intelligently used
to gather real-time traffic/street-view/etc data.

------
jasonmoo

        Step one: buy car service
        Step two: replace drivers with computers
        Step three: profit, optimize traffic patterns from within the swarm, decrease accidents, increase fuel efficiency, etc.

------
revorad
Travis Kalanick is the definition of relentless -
[http://www.youtube.com/watch?v=2QrX5jsiico](http://www.youtube.com/watch?v=2QrX5jsiico)

------
mason240
Looking at the Uber website, they refer the the Twin Cities as Minneapolis,
even though their service area includes St Paul and Minneapolis.

That's a deal killer for me.

------
logn
Will a web-bot be able to automatically order self-driving cars to pick up
robots so they can peaceably assemble outside Utah data centers?

------
arbuge
Aside: the quality of comments on Techcrunch seems to have really deteriorated
with their current comment system.

------
jfornear
Guber [http://imgur.com/Klr7cHY](http://imgur.com/Klr7cHY)

------
kailuowang
uber + Tesla + driverless = an environment friendly transportation system as
convenient as if you have a private car and driver and as cheap as public bus.

------
NN88
Basically Uber-driverless cars?

------
fsckin
Should have been 256M for a nice round number.

------
unz
This is kind of silly. If Google launched it's own uber with the google brand
on it, it would easily trump uber. Developing the the uber software would cost
way way less than $250 million. These large companies are throwing a lot of
money away on stupid acquisitions. (It makes sense in social networking, but
not with something like uber which isn't a network effects company).

------
clamprecht
Wow, corrupt governments everywhere, kiss your corruption goodbye.

