What Does the Future of Uber Look Like?

Uber might be one of the most popular companies in the world right now. Almost all of us have used their service. Uber describes itself as “A technology platform.” They go on to say that, “Our smartphone apps connect driver-partners and riders.” Therefore, the drivers are technically independent contractors that don’t work directly for Uber.

Uber went public on May 10th of 2019. They’ve only been on the stock market for little over a month, but have already caused a storm with investors. Uber’s stock started out as $45 per share, and it’s only decreased in value. After launching at $45 per share, Uber ended May 10th at $41.57 per share. Three days later on May 13th, the stock hit an all-time low at $37.10 per share. It’s steadily increased since then but still hasn’t gone above its opening price of $45. On June 5th, it actually hit $45 per share, but then quickly declined and hasn’t caught up since.  Some analysts say that you should stay far away from Uber’s stock, while others think buying is a smart move. So, what does the future of Uber look like?

From a simply financial standpoint, Uber is an absolute mess. Uber is losing more and more money from every ride they’re a part of. Research from Recode shows Uber loses an average of $1.20 on every ride. In 2018. Uber reported an operating loss of $3 billion on revenue of $11.3 billion. These are concerning numbers from a company that launched in 2009.

Uber’s IPO was probably the most hyped technological event since Facebook became public in 2012. People know that Uber is losing money, but the allure of investing in another “Amazon” is too much to keep people away from putting their money into Uber. However, there’s a problem: Uber has burned more money in the past 9 months than Amazon did in 7 years. This is alarming and should be a HUGE red flag to investors. The company is spending so much money that just to break even seems like an insurmountable task.

Recent reflections say Uber is losing around $1 billion per quarter. The company simply doesn’t charge its users enough to make up for these losses. Here in the Tampa area, here’s a pricing outlook for an Uber X (the standard one):

SEAT CAPACITY: 4

BASE FARE

USD 1.11

PER MINUTE

USD 0.13

PER MILE

USD 0.96

CANCELLATION FEE

USD 5.75

BOOKING FEE

USD 2.45

MINIMUM FARE

USD 7.15

These prices are much cheaper than they should be, and Uber knows this. They’ve invested in self-driving technology that will eventually eliminate the need to pay their drivers altogether, which eliminates the need to pay 80% of a ride’s fare to its driver. However, recent reports show that the cost of operating an autonomous vehicle could still be more than personal car ownership.

Forbes writer Stephen McBride is so pessimistic in Uber’s long-term evaluation that said: “As far as I can tell, Uber will never make money.” Many analysts have been saying this. Even Uber itself has told people that they don’t think they’ll be profitable for a long time, as noted in Uber’s SEC prospectus: Uber said it expects operating expenses to increase “significantly” for the “foreseeable future,” warning that “we may not achieve profitability.”

Gad Allen, Director of the Jerome Fisher Program in Management and Technology, agrees that the idea of Uber being just a ridesharing service won’t keep the business sustainable. However, due to its ventures in meal delivery, electricity, aviation, and others, Allen thinks that “Uber is going to turn out to be quite different than what they are now.” I think the idea of Uber expanding its horizons and becoming more of a technology company is a great move. This will keep investors curious about what’s next to come.

Allen even compares Uber to Netflix. Netflix shipped out DVD’s to people’s homes, a business that wasn’t sustainable. What this did, however, is bring Netflix’s name to millions of households. When Netflix became an actual streaming service, that brand-recognition helped get its name off the ground and running. Allen thinks Uber could be doing something similar, and ridesharing is just the “shipping DVDs to homes” of Uber.

In a report from Wedbush, the point was made that Uber is just beginning with rideshare. “A core tenet of our bull thesis on Uber is around the company’s ability to morph its unrivaled ridesharing platform into a broader consumer engine with Uber Eats, Uber Freight and autonomous initiatives ‘just scratching the surface’ of the full monetization potential of this platform over the next decade.”

Uber’s CEO Dara Khosrowshahi has been credited with helping cut down spending. Some investors place their confidence, and money, with him. Evan Rawley of the University of Minnesota even believes that Khosrowshahi can help make Uber have positive cash flow in the “not too distant future”

Uber is a company, like Amazon, that has taken enormous financial losses in hopes of someday becoming profitable. It has a 68.9% market share and is slowly becoming more of a technology service than just a driving app. One reason why Uber is valued so highly is market domination. From 2016 to 2018, the company almost tripled its revenue from $3.84 billion to $11.27 billion.

I think the future of Uber will come down to its ability to create. If it can innovate the market with its new technologies and really stand out, then the company has a chance to be really special. The issue is that no one knows when this is going to be. If Uber isn’t able to become profitable until something like 2024, will they be able to keep investors happy with billion-dollar losses per quarter? What happens if they aren’t profitable for 10 years? All these questions make Uber one of the most fascinating companies to watch for the next few years. They’ve created something that absolutely makes human life easier, but will investors be optimistic about its future in different technologies, or give up on a company with zero cash flow? We’ll have to wait and see.

What Does Netflix’s Financial Future Look Like?

I think almost all of us use Netflix (even if we use someone else’s account) pretty often. The company has become so big that the name Netflix has even become a verb in pop culture. It has movies, TV, and its own original programming. Despite all these positives, many are concerned about the future of the company. The company has burned through $13 billion since 2011, while also carrying around a large amount of debt. This leaves us with the question, what does the future of Netflix look like?

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Company Update: Series A Financing Round Announcement

INTRINIO SECURES $5 MILLION IN SERIES A FINANCING ROUND LED BY NYCA PARTNERS

Financial data platform poised to aggressively expand and continue providing the most affordable, accessible data to financial programmers 

SAINT PETERSBURG, FL (April 24, 2019)– Intrinio announced today that it has raised $5m in a Series A Financing Round led by Nyca Partners (Nyca), with participation from existing investors, Engage, Bascom Ventures and VilCap Investments. Intrinio democratizes market data – enabling fintech developers to efficiently incorporate vast amounts of data in their applications in minutes. This investment will allow Intrinio to expand its product development, data coverage, and market penetration to further make an impact on the fintech developer and institutional investment landscape. Nyca Investment Partner Tom Miglis will join Intrinio’s Board of Directors.

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Developer Spotlight #15: MarketBeat

Our mission at Intrinio is to power a generation of applications that will fundamentally change the way our broken financial system works. Intrinio's financial data feeds form the basis of large enterprise business reporting applications, fintech web-apps, mobile apps and even blogs. It's rewarding to see our stock API come to life at the hands of today's most innovative developers. They are building powerful things.

We're lucky to be in a business where we grow together with our customers, and we're proud to show off their hard work. Each blog in this series will feature a developer or a startup that has leveraged our financial data feeds to build something incredible.

These are their stories.

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Developer Spotlight #14: DiscoverCI

Our mission at Intrinio is to power a generation of applications that will fundamentally change the way our broken financial system works. Intrinio's financial data feeds form the basis of large enterprise business reporting applications, fintech web-apps, mobile apps and even blogs. It's rewarding to see our stock API come to life at the hands of today's most innovative developers. They are building powerful things.

We're lucky to be in a business where we grow together with our customers, and we're proud to show off their hard work. Each blog in this series will feature a developer or a startup that has leveraged our financial data feeds to build something incredible.

These are their stories.

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Developer Spotlight #13: Threadvest

Our mission at Intrinio is to power a generation of applications that will fundamentally change the way our broken financial system works. Intrinio's financial data feeds form the basis of large enterprise business reporting applications, fintech web-apps, mobile apps, and even blogs. It's rewarding to see our stock API come to life at the hands of today's most innovative developers. They are building powerful things.

We're lucky to be in a business where we grow together with our customers, and we're proud to show off their hard work. Each blog in this series will feature a developer or a startup that has leveraged our financial data feeds to build something incredible.

These are their stories.

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Top Dividend Stock Picks for 2019: A Guest Post by The Dividend Pig

With 2018 wrapping up in a rather ominous manner, I thought it would be an interesting experiment to use only Intrinio data to try and decipher which dividend growth stocks might perform the best in 2019.

For this exercise, I will ONLY look at Intrinio data and their built-in financial ratios and formulas to evaluate a rather large list of stocks (roughly 115 individual companies) I currently hold in my dividend portfolio.

Below are the top 7 companies that rate well.  As I have no certainty if this is the start of a bear market (with some sectors & companies down 20%) or just a steep correction, I have attempted to assemble a list of high-quality, dividend growth stocks with stable earnings, increasing dividends, manageable debt and plenty of cash flow to cover those (hopefully) rising dividends - even during difficult times.

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