Uber is dying. How and why?

  1. vs. Uber ride is split according to the countries.
Photo by Viktor Avdeev on Unsplash

A corporation with declining valuation issues share buybacks, cuts workforce, and slows down hiring. Uber and Meta (creators of Facebook) have already slowed down hiring. How does that help them in these bleeding markets? What are some tactics and strategies corporations deploy when the market enters correction? Which valuations are accurate and which are below their actual market value?

First, stocks get cheaper, and then your gas, commodities, and food. A recession follows inflation. Everything is priced in, really?

By the end of this article, you will be able to think about the above questions through the case of Uber Technologies Inc.

Uber — Asset Analysis

Let me shift your focus back to Uber. There are more problems than possible solutions. Not all tactics can save a company from a downward spiral. Below I will present four facts and sum them up to give your free-thinking some gas-

Primer (0) — Issuing bonds means increasing debt and buying back stock means decreasing equity.

Uber Technologies Inc has a bigger problem with its internal issues and a growing number of assets with negative enterprise value, or according to the BCG matrix — a dog. With Uber Eats, and Uber from countries surrounding Russia, with rising gas prices, Uber has become more expensive than renting a car and driving yourself.

BCG Matrix- Image Drawn by Author (may resemble free images)

Regulation and Equity Outlook

In recent form 4 filed by the Director ECKERT ROBERT uber sold 2460 shares for zero dollars, and they filed the same form about eleven times this month.

Primer (1) — Form 4: Stock or asset transfer to insiders for a price that may or may not be related to the market price filed with SEC.

Primer(2) — Form 10Q — Quarterly reports filed with SEC

Uber disclosed that its autonomous car program is at severe risk in its recent quarterly filings and may never launch. Uber is fighting a battle with Google for the same. Among other legal battles, a growing cash outflow toward settlement of 551 million USD contributes to one-third of their losses from operations (1524 million USD). The statement does not disclose the sexual harassment cases internally filled.

Photo by Maxim Hopman on Unsplash

Uber Eat vs. Uber Ride

Uber Eats owns —

  • Postmates. Type of business: Delivery anything app. …
  • Drizzly. Type of business: alcohol delivery service. …
  • Careem. Type of business: Mobility, delivery, and payments businesses. …
  • Cornershop. Type of business: Grocery delivery. …
  • Uber Eats. Type of business: Food and grocery delivery app. …
  • Raiser LCC. …
  • Uber Freight. …
  • Transplace

vs. Uber ride is split according to the countries.

Legal Battles

Finally, Uber is growing hostile towards its contractors and customers by denying refunds and support in times of inflation. Uber also has a history of technical failures and poor support. To close this opinion, I want to share a theorem —

The Modigliani-Miller theorem (M&M) states that the market value of a company is correctly calculated as the present value of its future earnings and its underlying assets and is independent of its capital structure.

M&M theorem means that cutting workforce, legal settlements, and other balance sheet adjustments or issuing debt does not increase the net valuation of any company.

Summing It Up

All these factors cause Uber to spend more money fixing issues than investing in developing better solutions or hiring better talent to fix the problems with existing platforms. Acquiring eleven food delivery companies might not solve the problem of technical failures or poor public image. However, Uber may have a light in the present darkness with the recent New York Taxi inclusion.

Image is taken from Google Search — All credits to Alphabet Inc.