Car sharing is no longer just a wonky alternative to taxis and a way for unemployed hipsters to make a few extra bucks. Investment analysts are estimating Uber’s value at $18.2 billion, according to Forbes and The Wall Street Journal.
If these reports are true Uber is worth almost as much as Hertz and Avis combined, Forbes writer Ellen Huet estimated. For the record, Avis is worth around $6.34 billion and Hertz is worth $12.4 billion.
With the venture capital money, Uber is now worth more than United Continental Holdings ($17.9 billion), Fiat (which owns Chrysler) Chrysler ($12.9 billion), and Mitsubishi Motors, which is worth $10.4 billion. Note: Uber isn’t the only cutting edge nerd favorite worth more than old companies with a storied history; Tesla Motors is currently worth $25.8 billion, largely because of stock value.
The number of rides booked at Uber are worth $1 billion a year which gives Uber a yearly revenue of around $213 million a year, Tech Cruch reported. Since this data comes from so-called leaked documents it may not be credible but it is fascinating.
Okay, so what does this all mean? Well, it’s hard to figure out because Uber is a privately-held company, which means it doesn’t have to reveal its value or any other financial data.. Among other things, it means that Uber’s ultra-arrogant founder, Travis Kalanick, could now be a billionaire.
It also means the auto business and the way that people get around cities is changing faster than we think. It also means that a lot of technology nerds think Uber is cutting edge. My guess is that a lot of them think Uber can be combined with Google’s self-driving car technology to produce a new business model. Google, after all, owns a piece of Uber, but it might really be after some of Uber’s proprietary technology to add to its self-driving car experiment.
How Will it Compete with Hertz and AVIS?
Okay, that doesn’t make too much sense. Zipcar, which is now owned by Avis, would be a far better fit for Google. So would Hertz, which has launched its own car sharing service called Hertz 24/7.
I have to wonder how Uber is supposed to compete with Hertz and Avis’s Zipcar, both of which have close relationships with the insurance industry and auto manfuacturers. One has to wonder if Uber is really the future or just a blip on the radar.
One group that will certainly notice this $18.3 billion valuation and take action is personal injury attorneys. My guess is that we’ll now see a torrent of lawsuits against Uber now that it has big bucks. Auto insurance fraudsters will probably start targeting Uber as well.
It looks like the car sharing wars have just begun and they’re about to heat up. So who will probably win these wars? My money’s on Google because it has deep pockets and technology. If Google can deploy its new technology with Hertz and Zipcar, it could develop a new business model that will change our communities and how we get around forever.
The real winner though will be all those who want to get around town fast. The losers will be all the taxi drivers who are going to be losing out on a lot of tips. They will either have to go to work for Uber or find real jobs.