Thoughts on Uber IPO?

As Isaac and Sandra shared Lyft's poor start has definitely affected sentiment heading into Uber's IPO.

Just read from https://www.reuters.com/article/us-uber-ipo-exc... that Uber dropped 20$B in valuation justf from Lyft's poor IPO.

Morgan Stanley being sued by Lyft for advocating a sell-side and Damodaran's assessment of Lyft being closer to $59 also doesnt help the case of Uber. Highly doubt the market sentiment will shift unless there's a big headline positive or quarter earnings improvement.

Update: Saw this meme and I figured to share it here-

"Scientists reveal to us the first ever image of a black hole"

It is difficult to make a case to invest in ride-sharing companies other than based on a hope that they’ll figure things out. Using the current business model, the more the ride-sharing company expands, the more money it loses. They have been able to survive so far thanks to venture capital backing. With the IPO, the bag is being passed on the retail investors.

The main problem with ride-sharing companies is the lack of ”stickiness” or customer loyalty in their current business models. Consumers just book through the service that can get them from point A to B in the cheapest way. This means the only way to compete is through price wars and a race to the bottom.

The only path to profitability I see is if the ride -sharing industry becomes a monopoly or at best a 2 player oligopoly. With anti-trust laws in place, I doubt this will be allowed.

As such, until the industry dynamics changes or until ride-sharing companies find a new way of doing business, I am staying away.