TIVP016: Uber (UBER): Cash Burner To Compounder? w/ Shawn O’Malley & Daniel Mahncke

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Investing, Education, Business

4.6 • 593 Ratings

🗓️ 20 April 2025

⏱️ 84 minutes

🔗️ Recording | iTunes | RSS

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Summary

Shawn O’Malley and Daniel Mahncke break down Uber (ticker: UBER), a ubiquitous tech giant that has changed how the world travels. Uber became profitable annually for the first time in 2023, and as its user growth accelerates, the company appears to be achieving modest economies of scale, making it an increasingly attractive business. In this episode, you’ll learn how Uber has scaled across the world and invested in competitors in areas it couldn’t win, why Uber isn’t as negatively exposed to autonomous vehicles as you might think, and why Bill Ackman invested in the company, plus so much more! Prefer to watch? Click here to watch this episode on YouTube. IN THIS EPISODE, YOU’LL LEARN 00:00 - Intro 06:55 - What it has taken for Uber to finally turn profitable. 09:25 - How regulatory risks are affecting the company. 12:37 - Uber’s playbook for global growth. 15:52 - Why international growth is more profitable than U.S. growth for Uber. 25:20 - Why Uber has invested in so many competitors. 50:52 - How Uber can actually benefit from autonomous vehicles. 56:47 - Why Bill Ackman invested billions in Uber. 01:03:30 - What is Uber’s intrinsic value per share. 01:15:09 - Whether Shawn & Daniel add UBER to The Intrinsic Value Portfolio. And much, much more! *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Get smarter about valuing businesses in just a few minutes each week through our newsletter, The Intrinsic Value Newsletter. Bloomberg’s reporting on how Uber bypasses minimum wage restrictions. Uber’s Q4 supplemental charts presentation. The New York Times’ coverage of driver lockouts. Check out our previous Intrinsic Value breakdowns: AutoZone, Alphabet, Ulta, John Deere, and Madison Square Garden Sports. Check out the books mentioned in the podcast here. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: CFI Education TurboTax Airbnb Connect with Shawn: Twitter | LinkedIn | Email Connect with Daniel: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	The beauty of Uber's model is that the vehicles are not on their balance sheet, and drivers
0:04.2	can opt to make themselves available in response to demand in real time. Thus, Uber drivers can
0:10.4	be incredibly flexible about responding to ride requests and a lack thereof. Another way to maybe
0:16.4	say that is that supply on Uber's platform naturally adjusts to demand. And for, say, Waymo, to try and
0:22.7	allocate XYZ number of cars to a city that will displace Uber, well, the reality is that they're
0:28.2	either going to under-allocate vehicles or over-allocate them at any given moment in time.
0:33.9	There's just no way to perfectly match demand with a fixed supply of vehicles driving around,
0:38.9	which is why it's better to deploy a more limited fleet and just partner with Uber,
0:42.7	tapping into their network for bookings,
0:45.0	and then the vehicles can be used for other purposes or as just an occasional alternative to a regular Uber.
1:02.0	So today's episode is on the mobility giant Uber, a company whose name is synonymous with its service, which is always a good thing, as we've seen with Airbnb and Google too.
1:07.1	I've always questioned how Uber could make the economics of its business work.
1:12.2	I've heard either drivers, users, or shareholders would win at the expense of the other,
1:18.1	and I struggle to see how they could balance all three interests.
1:22.0	It seems very difficult to price rights cheaply enough so as to continue attracting riders while also charging
1:29.5	enough to fairly compensate drivers in a sustainable way and still leaving enough meat on the bone
1:35.4	for the corporation behind Uber to generate sizable profits from fees. Even as I say it now,
1:42.1	I'm amazed that they have find a way to make it work.
1:46.2	But they really have.
1:47.5	And as we will explore in this episode, that core business only seems to be accelerating as the company expands into tangential areas too.
1:56.9	But with that, let me introduce my co-host, Sean O'Malley, who will be making the pitch
2:01.5	for Uber today, and I will just be sharing feedback and questions along the way.
	...

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