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Earners. What's up?
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Look.
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Why Uber? Well, there's a couple of reasons and this is how we break down from an analytical standpoint, right? There's technical analysis and then it's fundamental analysis. Right now we're going to go into the fundamentals because we want to see from a business standpoint what separates them and what why are they a great opportunity? So this is the call again. We're going to keep reiterating it. You can write that down, you can circle it, you can go to your brokerage account tomorrow and say, all right, I'm going to put this on my watch list. Well, here's why I liked it and I think a lot of people in EYL you liked it as well. All right, so Uber is finally profitable. We talked about this as a ride sharing company when it initially IPO in 21 but turned into something so much more. And when it started it wasn't profitable, but it recently has been. Right? So they've increased demand for ride sharing and delivery services. Obviously Uber Eats is a huge, huge revenue generator for them and they've done cost cutting measures potentially and they've shifted their growth at all costs to a sustainable profitability model. Right? They want to make sure that they're making money all the time. They didn't. Debt was something that they were accumulating over the first three years of business. Obviously that didn't work for them. They had to make some adjustments and they have. They've done a nice job. Huge congrats to Dar and the entire team at Uber for making those adjustments. All right, so Uber's revenue has consistently grown, but the company also implemented cost saving strategies, including job cuts and expanding advertising on its platform platform. So they've done a nice job on that, which wasn't always the case inside of the Uber's apps. But you've also seen them starting to advertise a little bit more on linear television and also on streaming services as well. So they're getting this thing right. They've adjusted and the adjustment is paid off. Why else do we like Uber? Oh, two words, Autonomous vehicles. Yes, that is right. Autonomous driving will be a game changer. Like it or not, this is going to fundamentally transform the transportation economy, right? This is going to disrupt everything. Now, when we talk about Uber, we always think about who makes money in business. And if you know business, you know it's the middleman, right? And so we always use Amazon as the example. Amazon doesn't make a product, but what they do is make sure that products can make it to you, right? So you have the person that creates the product, you have the person that needs the product, and you have the middle person that delivers, picks, ups and ships to you, right? So that middleman is Amazon. In this case, Uber is just that, right? Uber doesn't own a car, right? Uber doesn't need the ride, right? They're not the person and they're not the vehicle. They, they're not a automobile build company. They are a service that provides ride sharing and services to people to get to and from places. And so when you think about that, they don't have to make a vehicle, right? Which is high cost and the margins. And we can tell from some of the automotive industry companies that we know, right, they're not making as much as a profit as they like. In fact, some of them in debt. They're going to be in for a rude awakening here in the future when autonomous comes to spend scale. But they have a role in this ecosystem where they are not just doing ride sharing, they're actually creating a technological platform that more people are going to be able to use. All right, so here is the competitive moat. Why do we like Uber so much? Well, a couple of things. Uber has already has a massive global network of riders and infrastructure. They built that out. So if you think of the number two in the space is probably Lyft, which is cool, but Lyft and Uber are completely different in terms of business structure. In fact, Uber is almost becoming synonymous with ride sharing services. Right. It's almost like when we think of adhesive bandages, we think Band Aid. When we think of ride sharing, we think of Uber. They already have, right present day, over 200 million monthly active users. That's a lot. That's a lot. And that's only going to grow when you talk about international opportunity, when you're talking about business opportunity, and now when you talk about, about potential autonomous driving. Right. Uber also has a vast amount of real traffic routes, logistical algorithms, driver. Right. Rider matching and payment systems, a demand data and customer support. So they have all the infrastructure ready for this monumental shift that could potentially be happening in the automotive space. Now, why does that make sense? Well, partnerships are important, right? If they don't make vehicles, they need to align themselves with companies that do. And there is a company that does have autonomous vehicles and the name is Waymo. That's right. We talked about this a few weeks ago. Uber has already partnered with Waymo. In fact, if you're in Austin, Texas, if you're in Atlanta, Georgia, and we actually saw this on the road in Atlanta, I think shot, he posted it in one of his stories. There was autonomous vehicle that was driving. Well, why does that make sense for Uber? Well, like I said, if you look at their revenue model and their expense sheet, right, the majority of their expenses goes out to one key category in their business model and that is the driver. Well, if I remove the driver from the balance sheet temporarily, right. If I remove it, hypothetically, my revenue is going to go up because I no longer have to pay for the driver. I no longer have to pay for his insurance. Right. And so now you start seeing ways of increasing revenue by switching from a service that you had to a service that is going to potentially disrupt the way of the future for your space. And so Waymo is a key partnership. Like I said, Atlanta has already implemented it. Texas, Austin, Texas has it. New York is applying for application to see how Waymo moves in its jurisdiction. And, and Philadelphia is next up. And so when we take all these things into account, you can see why two to three years out, I'm looking at Uber as something that has potential growth. On the upside, a lot of positives. Now we can talk about Tesla. Yeah, Tesla makes a vehicle, so that's going to be a cost expense. And Tesla, let's go back to that last slide. Tesla doesn't have this last key piece down here, right. They don't have the logistical algorithms, they don't have driver ready matching. Now there is a button inside of the new Tesla models that can shift that. But what Uber does have is trust. Right? I used to talk about some of my peers and I'm saying, hey, can you imagine the time when you were younger where you would get in the car with a stranger and you would tell them to take you somewhere and that would be okay? Your parents would trust that Uber has just gradually done that for us. Right? We're liable to put our young teens and sometimes our young school age children in Ubers to get to and from places. So they've built up a trust. Tesla is going to have to. It's going to take time for them to do that. The fastest way for them to do that is potentially partner with a company like Uber, such as what Waymo has done. And that could be a game changer as well. So Uber is something that we like.
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