← The Compound and Friends
The Compound and Friends
Mark Mulhern (Manu Invests) on Autonomous Taxis and the Buying Opportunity in Uber
00:41:54
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- [00:00]
A
Foreign. Today's show is sponsored by Tucrium. Looking to diversify your portfolio beyond stocks and bonds? Commodities are getting more and more attention as we enter 2026. Tukrium's agricultural ETFs offer a way to access the futures prices of essential crops. These funds may help manage inflation risk and add diversification to your portfolio. Ask your financial advisor or explore Tukrium ETFs on your own. Visit tukrium.com that's T E U C R I U M.com Click the link in the show notes for more. Yep, it's your boy downtown. Josh Brown. I'm back for a new edition of Live from the Compound. We have a first time guest with us. I'm so excited to chop it up with Mark Mulhern, better known as Manu Invests to his audience. Mark is the creator of one of the best selling sub stacks in the in the category right now. It's called Fundamentally Sound. He has a degree in economics and finance, and after a decade in the industry, Mark now serves as the executive director of a nonprofit. He bridges the gap between high level financial analysis and the everyday investor with a mission to make research approachable and actionable for everyone. Mark, welcome to the show.
- [01:39]
B
Thanks, Josh. Thanks for reaching out. I'm super excited to be here. Big fan of the show and super excited to be part of it.
- [01:46]
A
All right, is that a couch behind you with like a little throw blanket? What's going on there?
- [01:50]
B
All right, listen, I got the wife too involved. She overthought it. You know, she thought it should look.
- [01:56]
A
I know, I like it. It looks, it looks nonchalant.
- [01:58]
B
But like, all right, it's a, it's an office slash, slash, guest bedroom.
- [02:03]
A
All right, before we get into the topic of the show today, can you tell us where the name Manu Invests comes from? Am I saying it right?
- [02:11]
B
Yeah, Manu. So, Manu. So, yeah, originally I was in a couple investing communities on Discord. And full disclosure, I'm a gamer, build my own PCs and stuff like that.
- [02:23]
A
Well, we knew that when you said Discord.
- [02:25]
B
Yeah. So an old gamertag was Manu Militari. And I built a little audience on Discord. People knew me as Manu. So as I launched a substack, I kind of rolled with it and it stuck.
- [02:36]
A
All right, we love it. Today we're gonna talk about a topic that you have been writing incessantly about. And you have become one of my favorite voices on this topic. You've been talking a lot about Uber and So have I. Full disclosure, both of us own the stock. I'm not trading it, I'm a shareholder and I've been in the name since it came public and I've added to it on the, on the massive sell offs that we've experienced and as a result it's become one of personally one of my largest positions. Uber had an awesome year last year and, and the year before but ultimately I think it's the most disrespected stock in the nasdaq. Like I think just people are giving them absolutely no credit and don't believe that Uber will be able to navigate the autonomous future. And that's evidenced by the valuation. So let's start there.
- [03:35]
B
Yep.
- [03:36]
A
I think this stock is now trading 16 times next year's earnings estimate with 25% cash flow growth expected and a big fat buyback too.
- [03:48]
B
Yeah.
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A
Why, why is this stock selling at half the multiple of, of the tech world stock universe? What is going on here?
- [03:57]
B
Yeah, so I completely agree with you. I think it's one of the miss most hated and misunderstood stocks that are out there right now. You know, surface level, people see AVs, it's funny because Uber has such like a love hate reaction with AVs. You know, Waymos come out, the stock price goes up. Tesla postpones, the stock price goes up. Waymo does well, stock price goes down. So you know, the thing about Uber is that its financials and its business I don't think are, are easily understood at a surface level. Right. So when you start talking about AVs, people see human R share and they make it make the assumption that it's going to like disappear overnight and simply that's not the case. You know, you've read my stuff, you know that I actually think AVS are going to be a big tailwind for Uber.
- [04:50]
A
Yeah. So why do you think? Is it just because people are scared of the resources of Alphabet and the, the kind of like the throat slitting mentality of the Elon Musk Cyber Cab project. It's cybercap talks in terms of they're going to own the whole industry. And Waymo basically has a money printer in the basement, otherwise known as Google Search and now Gemini and unlimited resources to do battle. And people look at Uber and they say, well you're not building cars, you don't have the money print through in the basement and you're not Elon Musk.
- [05:31]
B
Yeah.
- [05:32]
A
Therefore you must be, you must be screwed and this must be an existential risk for you. Why, why do people feel so strongly about that. I mean, when you hear me say it out loud, the narrative does make sense.
- [05:44]
B
Yeah. And yeah, so I think he nailed it. I think, you know, in regards to Tesla, those are shareholders of their own style, right? Anytime you speak about Uber, it's, it's as if you're speaking about shorting Tesla. And you know, Google Alphabet is one of my favorite companies in the world. Endless money, printer, endless resources, has their hand in everything. And so I think at surface level, people see like, Uber's just an app. Why can't Google or Alphabet just replicate it, right? They have all the data, they have all the user data, they have Google Maps, they have all our search history. Tesla is going like full stack. They're going to be cheaper than everybody. But what I think people fail to realize is that, you know, Uber took a long time to become profitable, right? It was, it was 10 years of cash burning to build this platform, to build, you know, and it's not just an app, right? It's a complex system underneath it all to make it work. And they spent all this money on building a consumer base that is more than 190 million monthly active users. So, you know, I don't see it. I think one of the biggest misconceptions, it's that it's like a this or that end game, right? Like Waymo's only gonna eventually go direct to consumer from their own app. Like Tesla's gonna take over the world. When the reality is, you know, Dara is very clear that, you know, Uber made the decision to go asset light for a reason and spin off their AV stuff because the, the largest service that they offer is maximizing utilization for people that are on the marketplace, right? So they already got partnerships with Uber, they already got a, a ton of partnerships with other AV providers. People see, you know, Elon Musk, they see the Waymo name and they talk about it like it's just going to be a market that is pick or choose, Tesla or Waymo. And I don't think that's going to be the case at all.
- [07:51]
A
Well, I think the thing with Waymo is that when people land in San Francisco or elsewhere where Waymo is operating or Austin, there's sort of like a thrill associated with download the Waymo app and try it. And who wouldn't? Myself included. Just because the novelty of, I heard everybody talking about these autonomous cabs. I want to take one on the way from the airport to my hotel and they work and people are really happy with them very well. And they, and they have Flooded the zone in those locations. And so you're not waiting 30 minutes now. It might be different if you're at a golf course somewhere in a remote area in the mountains, you know, somewhere in California, and you need a ride back to the resort hotel you're staying at. That might not be, snap a finger the way an airport ride to your hotel is. So there's that part of it. And so the trial makes sense. And so in places where Waymo is, and there's consumer awareness, the trial, new user trial goes through the roof. Of course it does. Okay. But the thing is, I sort of think the default becomes what car shows up faster. And for 99% of people who are not socially awkward or, or bizarre, they don't care if it's a person or a robot. They just want to get where they're going for a reasonable price. I don't think it's going to be like, no, I only take robots. So if, if I end up being right about that, then the network with the most ridership and the most drivers and the most vehicles and the highest availability across the board is going to be the default app that people open. If I'm wrong about that, it's a whole different story. Do you see it, do you see it that way? It's sort of a binary thing. You either think people want speed and convenience or you think they care about something different.
- [09:52]
B
Yep. So spot on. So I have a very similar take on the situation. You know, I, I try and look through investments through my lens as a consumer as well. Right. And you know, I, I, I'm willing to, I have a little saying, like buy nice or buy twice. Right. I'm willing to pay for convenience. And I think you're spot on right now. We're in these geofenced areas where supply is flush, prices are subsidized to really encourage ridership. But that's not, that's, that's only ridership isn't a problem right now because there's not enough wayos to meet demand. Right. To meet the novelty curiosity that people have, to scale that onto a major city level or nationwide isn't going to happen next year or the year after or the year after that. Right. As the novelty of like these AVs and cyber cabs kind of wears off, it really comes down to busy professionals or people that are trying to get where they're going as fast as they can. Right. I, you know, I'll go as far as to say, like, I genuinely don't think people will have any Preference. There will always be some people who have a preference, but yeah, majority.
- [11:07]
A
Some people will prefer the human.
- [11:09]
B
Yeah, the majority. My wife is one of them. She's like, I'm not getting in a Waymo. I'm like, we need to go somewhere that has a Waymo, you know, and because I'm in Boston, we don't got them yet. But people aren't going to care if it's a person or a car driving itself. Right. What it's going to come down to is what ride gets here the fastest. I want to ride in three minutes and I want to get there in a trusted ride, which is Uber. And like, and the reality is, over time, as AV prices come down as well, like, people pay for convenience. I mean, we see it with Uber eats, people pay 30% more.
- [11:45]
A
I know for a meal.
- [11:46]
B
My kids for, for something that's down the street because they're too lazy to go. So you're going to tell me that someone's not going to pay an extra dollar a mile to have a car show up in three minutes rather than 20 minutes? I think that's nuts.
- [11:57]
A
My, my kids will. Uber eats Starbucks. It's, it's a three quarter of a mile walk and my daughter drives.
- [12:05]
B
Yeah.
- [12:06]
A
And it doesn't matter. So you use the term subsidized. And I want to, I want to dig into that for a minute. There's just no possible way cybercab will be profitable anytime soon. Now, historically that hasn't mattered to Tesla shareholders, but just generally speaking, there is a limit somewhere where it's like, okay, we have revenue growth, but like, we can't keep losing billions of dollars quarter after quarter after quarter making these rides cheap enough to, like, prove a point. And, you know, Elon has kind of gone all in on autonomy, including cybercab and robots, et cetera, to the point where they've discontinued the manufacturer of, I think, the Model S and the Model X. So they're going to focus on Model 3 and Y, which are better sellers and they're going to divert resources toward more autonomous. So he's not going away and he's going to expand to more cities this year. He will never hit the targets that he's been talking about. For example, last year he said by year end will be in 30 cities or something. Like, none of that will, none of that's going to happen at the rate that he promotes it. But, like, it is inevitable. The question is like, is there any limit to how much money they're willing to lose in the Pursuit of market share in autonomous taxis. Maybe the answer is there's no limit. I think that's sort of scary for. And then we'll talk about Waymo subsidizing in a minute. But, like, what, what are your thoughts on whether or not there is any governor on what Tesla will be willing to spend here?
- [13:46]
B
Yeah, so obviously that is scary. You know, fully burning cash to gain market share. But, you know, at the end of the day, still like, one of the prime arguments too, is that like, why list on. Why list on Uber when you can go to direct and get a dollar, you know, get 100 of the money, Right?
- [14:08]
A
Yeah, but why would, in other words, why would Elon allow cyber cabs to be on the Uber app? Okay.
- [14:13]
B
And so Elon and Tesla are, you know, pretty black and white right now. They're saying they're not going to be on Uber, but the reality is, you know, if you, if you make 75 cents for every dollar on Uber or you make a dollar direct to consumer through the Tesla app. Right. 75 cents is better than a car sitting empty. And I think people are also thinking that it has to be like this or that, like, cyber cab can always prioritize direct to consumer. But. But there's no downside of having an empty vehicle be listed on the Uber marketplace. Right. It's the same way that planes, they're flying one way or another, so they'd rather list discounted seats last minute or put them on Expedia and booking and whatnot just to fill the seat and get some revenue for it. So I think down the line that'll become more of a reality. Me, as an investor, I do think there has to be a bottom line for cash burning to gain market share. But Tesla investors are a breed of their own and might not see things the same way, but, but the other reality is too that, you know, Tesla's not level four right now. There could be regulatory requirements that require lidar. Like costs could change before mass market adoption for cyber cabs.
- [15:33]
A
Yeah. To be clear, they have autonomous taxis with a human driver in them for the time being. And this is like one of the big things that they keep giving guidance about to the street is when will the drivers be removed from the, from the cyber cabs. Or also a lot of timeline shifting with, like, when people's regular Teslas are going to be lit up and turned on so that they themselves can become taxis. He keeps saying that's like, he keeps saying that's like tomorrow, but like, it never seems to happen. Okay. But to push back a little bit. The argument for Elon not having cyber cabs listed on Uber is if you want to change behavior and you want to stop people from opening the Uber app.
- [16:19]
B
Yep.
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A
And it seems like that's what he wants to do in a way that Waymo. So far, they've launched two cities with Uber and they're launching all the rest of the cities on their own. And I think that's sort of like a hedging their bet. And they might decide one day we are pulling our cars off the Uber app in Atlanta and Austin. I think uber goes down 10 points that day.
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B
Yeah, I agree.
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A
No matter what price it's trading at, it could be at 80, it could be at 100. It's. It's dropping 10 points. Or they might decide to announce three more cities with Uber because the partnership is serving their needs and they see the value in mass utilization of the vehicles more than proprietary app usage. I couldn't, I couldn't guess which way that's going to go, nor Kendara. Really. Nobody can handicap that. And I will tell you, the day that Waymo announces we're going to have more vehicles on Uber in more cities, America, international, it almost doesn't matter. Uber will go up 10 points. Yeah, I almost think that is the fulcrum issue. So what are your thoughts about Uber's willingness to burn cash and go it alone and have cars potentially sit idle rather than cooperate more with Uber?
- [17:42]
B
Yep. So I think we are definitely in like a one to three year kind of critical phase right now. You know, I don't think we're going to get much insight from Waymo about, like, what's working and what's not. I think they're going to keep it close to their chest until they make a decision. So like you said, they're probably in a little testing phase. And to your point about trying to pull consumers, very valid. And I think Uber, you know, Uber's a cash machine right now. Right. They're not the negative free cash flow company that they were a few years ago. And Dara has been very clear that Uber is willing to use its balance sheet to help fragment the market. Right. So Already Uber has AVs on the app and there's more coming. Right. They got all the partnerships with Neuro. Lucid.
- [18:29]
A
John. John, pop that slide, Pop that slide. While Mark is talking, we have all these logos that Uber has commitments and partnerships with on the left, and then on the right you see other players who might be potential partners. And of course, Tesla is listed there. But just let me fill people in who are listening, not watching. Mark?
- [18:52]
B
Yep.
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A
On the left, Uber Current partners, actual commercial operations with Waymo, which we talked about with We Ride and with Pony AI. A lot of this stuff is happening internationally in Asia, the Middle East. Then they've got announced deals with AV Ride, Neuro, Aurora Wave, which is backed by Nvidia, Motional and Wabi. And again, some of these are in the uk. Like there's, there's all sorts of global partnerships that Uber is pursuing and it's in there. But I think it's worth saying it's in their best interest for there to be a fragmented market with Dozens of different OEMs and software companies who have various types of autonomous services. And Uber becomes the demand aggregator that's got 190 million users and is diverting opportunities to all of those players. That's what Dara, that's his bet that he can do that. But the market doesn't seem to think that he can do it.
- [20:00]
B
Yeah. So that's the bet, that's the play. Right. And I think that's what we need to see work out. There was just a new investment in Wabi announced the other day. You know, CES is Nvidia keynote speech was awesome about essentially making AV tech plug and play for car companies.
- [20:21]
A
And I think every car company can build an autonomous vehicle via Nvidia's technology.
- [20:27]
B
Yep. And so Uber is providing them, you know, millions of miles to help train that. Uber's investing in these companies, they're getting equity back, you know, so they're getting kind of being a vc, helping these companies start up and, and build, build traction. But at the same time, they're getting exclusivity agreements. Right. They got cars lined up from Neuro and Lucid Wabi, you know, Mercedes Benz is a coming out equipped with Nvidia technology. So there's, you know, ideally, based on announcements, there's going to be a whole lot of rollouts in 2026, which, which I'm very excited about. And I think that that's what Uber needs to do. Right. Even, you know, in my opinion, even if you pull Waymo and Tesla off of the Uber marketplace, Uber can succeed and experience a tailwind from AVS by listing all the, like Tier 2. Because it still comes down to Uber is no longer. If you open the Uber app today and compare it to a year or two ago.
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A
Yeah, it's groceries, it's everything. Freight, it's.
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B
Yeah. Right.
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A
So it's not just retail delivery. Right.
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B
It's not just a taxi app, it's not just a real high ride hail app anymore. Right. They got Uber one, they got last mile drop off shopping. So there's a stickiness inherent to it. And I think that's also why they're launching a lot of the things like grocery and retail, because they see the threat of Waymo and Tesla trying to pull consumers off of their ecosystem and into their own apps. But when people are living in Uber, you know, consumer behavior is sticky, people have habits. I think it's stickier than people expect. And I think even, you know, even If Uber gets 15 to 25% of the AV market share with tier 2 providers alone, I think they're going to have a lot of success with margin compression, cost reduction, increased ride liquidity. I still think they'll be the number one place to get a ride in under three minutes for a reasonable price.
- [22:29]
A
That's a really good point. On the cost side, one of Uber's, obviously one of Uber's highest costs is the human being sitting in the seat. Whether it's a professional driver or it's an Uber X. The take rate for the driver versus the take rate for Uber is like one of the variables that could be most changed if and when there are autonomous vehicles in every city. I would have guessed that the street would see autonomy as a tailwind for Uber on the cost side. But again, the street seems to be consumed with this narrative that there's going to be two apps and Uber won't be one of the two. Yeah, but like financially, what does an autonomous vehicle with a lower cost per mile mean for the financials of this company?
- [23:22]
B
Yeah, so Uber, So spot on with the take rate, you remove the human driver. What a lot of people don't realize too is that Uber has a ton of pass through costs, right? So they gross their revenue. So included in their revenue is money they're paying out as incentives for like surge pricing and high demand events. And also Uber insures in house, so they are charging the driver for insurance per ride and it's coming into Uber as revenue, but then it goes right out for provision for losses. Right. So useless. Useless. So with an AV, the way AVs are set up right now is the states that do have laws require that the operator insures them and the states that don't, it defaults anyways to the owner of the vehicle. So having an AV on the Uber platform removes the insurance cost, which is like conservatively 30% of their take rate, removes the driver incentives which is like another 25%. Yeah. Of their take rate.
- [24:25]
A
50% of their expense dropped right down to the bottom line.
- [24:28]
B
Right. So with that, Uber can have a lower headline take rate number for AVs. Right. They don't have to be at 30%. They could be at 20, 18% and still end up with a higher actual margin than, than they do with the human driver.
- [24:45]
A
Yeah. So none of that, none of that is priced into the stock right now.
- [24:49]
B
None.
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A
No one appreciates it. And I, and I understand why, other than the Waymo partnership and some shit in Saudi Arabia, you do not see.
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B
Yeah.
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A
You do not walk out on. You do not walk out of the terminal at lax.
- [25:04]
B
Yep.
- [25:05]
A
Or in Las Vegas or anywhere that matters for visibility. And see an autonomous Uber. They don't, there's no autonomous Uber brand, so people don't understand how big of a player they could be in av. They think it's a, they think it's Blockbuster.
- [25:21]
B
Yeah, yeah, people, people regularly, you know, comment to me pictures of Blockbuster and BlackBerry and stuff.
- [25:27]
A
All right, put this slide. John, can you put this slide? A partners with Nvidia So this is part of Uber's last quarterly earnings supplemental materials. And they're showing for the listener, they're showing how Nvidia's L4 software and AI platform combined with Uber's network of users and, and, and data and what the. The benefits end up being. So basically they are pitching this as an AV technology ecosystem. Nvidia comes to the table with end to end AV brain. So that's their chip that's built deliberately for autonomous driving. They come with supercomputers for AI training and they come with a unified architecture for OEMs to build on. So Mercedes, Cadillac, Chevy, all of these OEMs can plug into or plug in Nvidia's chips and software and instantly they are producing autonomous vehicles. Very exciting. Uber brings to the table their global motility mobility ecosystem, which again is the largest in the world. Real world driving data, which they have been collecting and analyzing for 12 years. And AV fleet management expertise, which we could talk about in a second, but that's an underrated part of the story, fleet management. And the end result is more Uber ready autonomous vehicles hitting the market. Every OEM producing vehicles that instantly they just have to be owned by someone, probably a corporation or a private equity firm. But there will be autonomous fleets of every car you can imagine powered by Nvidia put into use by Uber all over the world. And their partner is Nvidia, for God's sake. If anyone Keeps Elon Musk up at night. It's in. It's. It's Jensen and his vision for robotics and autonomy.
- [27:30]
B
Why?
- [27:31]
A
What do you think it'll take for people to wake up to that, to that version of the future, which is clearly not priced in.
- [27:38]
B
Yeah, what I really would love, I mean, I think production is really going to be the wakeup call. Right. We've got a lot of. In 2026. In 2026 coming soon. So I think as things start to roll out this year. But also, you know, I would love, once we start getting like, AV KPIs from Dara on earnings calls and stuff to show that, like, the amount you, you know, the amount of miles that are being driven, you know, they got AVs operating in Dallas, I think it is right now, and then obviously internationally. But I think once they show that, like, where we have AVs on the.
- [28:15]
A
Platform, AVs were 3% of all ride share last quarter.
- [28:20]
B
Yeah.
- [28:21]
A
All we have now is press releases.
- [28:23]
B
Exactly. So partnerships, we don't get any hard data to show that, like, what we're doing right now is working. And it's probably the. Keeping a lot close to the chest as they work it all out. But such a great point over the next year as we start to get like, you know, these, these graphics and stuff with specific, you know, Uber does a great investor presentation every time they do earnings. So as soon as we get actual AV imagery and AV data points that are showing, like, this is the percentage of our rides in cities that are now AVs. This is the average time, wait, total between AV and human. You know, this is the AV demand. I think that the sentiment will really shift and people will see that, like, uber is listing AVs and they're working. You know, toss that, add that in with, you know, margin expansion and continued growth, and I think we get a sentiment shift.
- [29:14]
A
I think it's a great point. I want to go through some of these partnerships with you. So we. We'll skip Waymo. We ride. They have just expanded robo taxi services to 15 more cities and public operations in Saudi Arabia and the United Arab Emirates. These are big markets. It's not New York City.
- [29:33]
B
Yep.
- [29:34]
A
But it's a huge market that does not necessarily have a better alternative or like this entrenched thing with millions of drivers. So I find that, Look, I find that to be far out of the public eye of Wall street investors, there's no way a successful we ride partnership is priced into Uber stock.
- [29:55]
B
Right now. The whole conversation is us focused. Right.
- [29:59]
A
Okay, I agree with that.
- [30:00]
B
And, and I mean rightfully so. US is the main market and the, the fastest AV roll out in the world. But Uber, over 50% of their business right now is international. No one else is global. So Uber has the foundation built across the world to roll these partnerships out. You know, we're starting to see like WH mo in London I think, but no one else is in the Middle East. And you're talking about like Dubai and stuff as well. You're not talking about no name cities, you're talking about some of the technological capitals of the international world. Right. And I think that that's being completely overshadowed by the US argument.
- [30:37]
A
All right, you mentioned Dallas. That's the partnership with AV Ride.
- [30:41]
B
Yep.
- [30:42]
A
Robo taxi rides are now available in Dallas. AV Ride, was that the thing that spun out of Yandex and is now partially owned by a company that's based in. In, in. In the Netherlands?
- [30:58]
B
Yeah. Is that the Nebbyist it was from? Yes. Nbs. Yep. So it was the spin out and yeah, it is Nebbyous. All right.
- [31:07]
A
Baidu's Apollo Go, a collaboration announced to accelerate autonomous deployment in Asia and the Middle east with Uber.
- [31:15]
B
So Uber's the only one who's got a footprint in, you know, Southeast Asia at all.
- [31:20]
A
Okay. Volkswagen, which is a pretty big deal obviously in Europe. Long term partnership to deploy autonomous ID Buzz vehicles on Uber's platform. Is that a, is that a meaningful partnership or just one of many and not worth really diving into?
- [31:39]
B
Well, hold on, let me. Baidu I think is about to be involved in London actually as well. So I think Baidu's about to roll out in London with Waymo. Okay, Volkswagen. So, you know, not as big as the other names, but I think think it's still important. Right. You're talking about a major player player that's about, you know, a well respected brand that's about to roll out cars in the US And I think the more, you know, the more that Nvidia technology gets adopted, the more stuff we're going to see like this, Right, like car branded companies launching AVs on the Wayo platform. Right. They don't want, they have their own business, they don't want to develop an app. Right. Way wh Mo and Tesla are a different story. That's what they do. You know, Elon wants to take over the world. Google does everything. They have the data, they can do it. Volkswagen, Ford, Cadillac. Right. Car manufacturer.
- [32:30]
A
They're not going to build their own app, they're not going to create their own community of of, of riders. All right, Pony AI strategic partnership. This was one of the earliest ones they announced. Yeah, what, what is the meaning of Pony to Uber?
- [32:45]
B
So honestly, the more, the more partnership. The bottom line about all these partnerships is that the more there is, the more Dara's plan comes into effect. Right. So some of them are big, some of them are small. Pony AI is the Chinese company. You know, if Uber can get into the, you know, I mean, who knows what China. But you know, as we roll out in the Asian market, Pony AI is going to be a big part of that.
- [33:12]
A
Alphabet is not a player in China. No. Okay, the last one, this also was announced at CES. The Lucid Neuro partnership. It's a three way deal and it's a program to deploy 20,000 plus autonomous Lucid vehicles equipped with Neuro software over six years. I believe Uber now has a stake in Lucid. Lucid is the oem. They make electric vehicles. It's in that category with Rivian and Tesla. It's sort of, I think it came public in the 2021 bubble, but somehow survived. Is that, do you see Uber's ownership stake in deals with OEMs like Lucid as being another way forward that maybe someday they'll get credit for?
- [34:01]
B
Yeah, I don't think they're getting credit right now. So, you know, it's equity in the company.
- [34:06]
A
Too many logos on the corner.
- [34:08]
B
Too many logos. That's the problem.
- [34:11]
A
Did you see the, the picture of the car? It had a Neuro logo, a Lucid logo and an Uber logo. I know, guys figure it out.
- [34:17]
B
I know. And the cool thing about the car though, one of the biggest things that people love about WHMO is you can control like the temperature, music, ambiance, everything when it pulls up. Uber specifically designed the interior of these cars kind of to counter that. I believe, you know, really to have like control of it with the Uber app. But yeah, I mean these partnerships are huge. And I think too a lot of people are seeing like, oh, I thought Uber was asset light. There's, they're signing up for 20,000 vehicles. Right. So Dara has said we're willing to use our balance sheet to help roll this out to get stuff on the platform. The long term goal is to financialize the AVs, you know, but the agreement itself also says purchase and operated by Uber or one of Uber's third party operators. Okay, so the 20,000, you know, I'm sure Uber will purchase a good amount of them, but it's also just facilitating getting them on the on the marketplace. So, you know, a lot of people have brought up like Uber shifting away from its asset light model. I think that's temporary. I think it's to get AVs on the platform, to get those data points and to show that it's working.
- [35:25]
A
All right, last thing here we have a shareholder. We have another shareholder worth talking about in the Uber story, and that is Bill Ackman. And this must have been exciting for you. Obviously, legendary investor, Pershing Square, one of the largest, most successful, you know, long term, one of the most successful hedge funds. Bill Ackman came across your thread on X laying out your Uber thesis and he gave you the endorsement. He retweeted you and he said everybody should read this Bill Ackman. So let me just point out, I believe Bill Ackman has a very large position here. 30 million shares of Uber. And I'm reading this could be wrong. I'm reading it's 20% of his disclosed 13F.
- [36:20]
B
Yeah, I believe it is.
- [36:22]
A
So historically, Ackman runs a very concentrated portfolio. He's got 13 portfolio companies. This is one of those 13, but it's 20% of his fund. I would imagine he's calling Dara every 30 minutes and just blowing him up on days where the Stock is down 4%. Just telling him what to do, what to announce, who to hire, who to acquire. How did it feel to get the. To. To get the. How you doing? From Bill Ackman? That must have felt pretty good, right?
- [36:56]
B
Yeah. My, my. You know, shout out to my boy Bill. So he's hit me twice now since then, which is pretty cool. Yeah. But you know, it's always nice to, you know, I really try and bring a different perspective to my writing and company analysis and stuff like that and. Okay, you know, it's always been well received, but obviously to be acknowledged and received well by somebody like Bill Ackman was an awesome feeling.
- [37:19]
A
Okay. I have one estimate that his average purchase price is high 60s to up to $72 a share. Who knows? And of course, 13 Fs are. They come out 45 days after the end of the quarter. So you have no real idea. Assuming that's close to true, you got a stock in the high 70s, low 80s. We see this stock trend down toward Bill Ackman's average cost and his gain in the stock completely erased. What do you think the odds are of a 13D filing and a board seat demand? I would say very, very high.
- [37:58]
B
Yeah, I mean that. That's Bill. You know, he's Been even very vocal. He has like a minute stake in Hertz, and he was already pinging Dara about Hertz Uber extended Partnerships. Dara's like, yeah, we already work together, but I'm happy to talk, you know.
- [38:14]
A
Right, okay. So you would, you would agree with me, like, it's unlikely this stock gets into the low 70s without Pershing Square taking action.
- [38:23]
B
Yeah. Yeah.
- [38:24]
A
Okay. Is that, is that good or bad? You know, is that a distraction that takes Dara's focus away from building more opportunity, or is that what Wall street needs to see in order to start giving this stock some respect?
- [38:40]
B
I think a little bit of both. I mean, I have, I have a lot of faith in Dara. I think he genuinely has vision right here. I love him as a CEO. I love his earnings calls. He's straight to the point. He was. And like, you know, people don't talk about it, but he was Expedia CEO. Right. Like, this is. This is Marketplace part two. You know, the whole dynamic of rideshare is changing. And his experience at Expedia, I think it is lending a lot to the strategy that they're putting out here. And I'm very happy with it. So, you know, I think I'm confident in Dara's ability to also steer his ship with. With increased input from somebody like Bill Ackman. And I'm excited to see how it plays out. I think this year is going to be a big year.
- [39:25]
A
So I'm glad you brought up the Expedia thing. Daro is a protege, I think, of Barry Dillers at iac and Expedia was a port company. And the thing about Expedia is in the early days, there was this concern that hotels would go direct to consumer. And of course, the airlines already were direct to consumer on the Internet. So this idea like, well, what is Expedia really doing if people can just go direct to Marriott? And of course they do. Like, Expedia doesn't have the whole market to itself. However, it is still the demand aggregator. Every hotel chain works with them, Every airline works with them. Because to your first point that you made, why have idle capacity when there's a partner here to fill in those gaps? And maybe that's the playbook that Dara is running again here, and people just don't believe in it yet, or maybe they never will. But like, I just find it fascinating to see that playbook being repeated now in a brand new category with the guy that invented it.
- [40:29]
B
Yep, I completely agree. I. I don't think anybody. I never hear people talk about dar's Expedia experience. Nobody talks about, like, hotels and stuff like that. Like, that's essentially the playbook here, like you said.
- [40:43]
A
Yeah.
- [40:44]
B
If a hotel is going to have a room be empty, why not get it filled at a discounted rate by Expedia And Uber, as we talked about, they have the financial room to. To make it appealing to. To providers like Waymo and Tesla or not them and just doing it through everybody else. You know, they got a whole, A whole slideshow of partners, as you, as you pointed out.
- [41:06]
A
Well, Mark, we went longer than I told you, so I want to, I want to say thank you so much for your time and really appreciate you sharing some of your insight with us today. I'm sure there'll be no shortage of reasons for us to check back in with you, so stay by your phone and we will watch Uber go into its earnings report together, I suppose. And looking forward to it. We'll. We'll see the reaction after. Wish us luck. All right, guys, thank you so much for watching and listening. Go ahead and hit that, like, button for me. Leave a rating, leave a review if you are listening, and we'll see you next time. Thanks again, Mark.
- [41:39]
B
Thank you.
- [41:46]
A
Sam.