Insane New Uber/Waymo Competing With Tesla Theory

Well, everybody's favorite early Uber investor is on a bit of a tear at the moment, sharing his opinions, thoughts, ideas, and even conspiracies about what might occur in the future. I wanted to start with this one today. A key standout quote here from Jason Onx. Don't be surprised if Tesla, Amazon, or Google buys Uber for 300 billion in order to win the deployment of autonomous vehicles. Now, putting aside Amazon and Google for a moment, if Tesla buys Uber, I'll retire from creating content. That's how confident I am that is not going to happen. Apparently, I'm not the only diluted Tesla fanboy of that opinion. So, a merit onx replying to this, there is a 0.0% chance that Tesla buys Uber for 300 billion or even for a pack of gum and some Skittles. Now, we'll get to some of the engagement here. Jason replied to this post, but first to be fair to Jason, let's read his full original post. He says there will be significant M&A merger and acquisition activity in the autonomy space. He then goes on to tell us not to be surprised if Tesla, Amazon or Google buys Uber for around $300 billion, which for the record would be about double its current market cap in order to win the deployment of autonomous vehicles. He also adds also don't be surprised if Whimo buys a car company. He adds, finally, don't be surprised if Door Dash, Uber, and or Lyft merge and then buy a car company. He then mentions a few specifically Lucid Rivian VW and an autonomous vehicle company VA in order to compete against Tesla and Whimo. Now this is quite an interesting idea from Jason. I actually think that odds are some of what he suggests might occur has a decent probability. Tesla buying Whimo, no [ __ ] chance. But Whimo buying a car company, that would be the next logical step for them to try to reduce their absolutely embarrassing current hardware costs. It's not going to be enough to compete sustainably with Tesla over time. So, I would suggest it' be a waste of capital, but that would buy them a little bit more breathing room and a little bit more runway before they inevitably realize there's no point. We can't catch Tesla's cost. Therefore, what are we doing? I also strongly suspect that Lucid, just between you and I, quietly are hoping to get acquired. I think Rivian wouldn't rule out that possibility as well, nor even the burning dumpster fire that is Volkswagen. Let's just zoom out for a moment though and talk about the potential combination of some of these entities. As it stands today, Uber is an excellent company as in the product, the service. It's not just the convenience of being able to organize a lift. I mean, if you're in like a downtown of a major city, you can dead ass pull out the Uber app and within 1 2 3 4 minutes at most have someone picking you up. It's incredible. Then there's Uber Eats, the equivalent of Door Dash for food delivery. Also an excellent service. I mean, you pay quite a bit, but Uber's done very well to expand their service offering to be ubiquitous in all of the major markets around, at least in the West. But their entire business model hinges on humandriven vehicles. Likewise, Lyft, even Door Dash, the food delivery. So, you need a person involved at this point in time. If they do nothing, they're absolutely [ __ ] cooked. With the advent of cheap, affordable, ubiquitous autonomy, they got no hope of competing cuz they can't compete with their biggest cost being the human, which is no longer required for autonomous vehicles. These hypothetical mergers, acquisitions that Jason is suggesting could occur will be coming not from a place of strategic brilliance, but of sheer desperation in the threat of an existential crisis. Now, imagine for a moment, if you will, what it could look like. Let's just say hypothetically, that Door Dash and Uber do actually merge. So you got the king and queen of food delivery plus transport as a service and then they decide to gobble up Lucid and VW then pick up an autonomous vehicle company as well. What are the odds this new giga entity will miraculously be able to match Tesla's capability for affordably producing autonomous electric vehicles at scale? By the way, the answer to that question is there's no chance that's going to happen. In case you guys are unaware or have forgotten, the list of companies today profitably producing electric vehicles at scale has only one name on it, Tesla. So I can understand the thinking behind Jason's theory here. The thinking would be well if you don't have autonomy vehicle production and an existing network for ride hail, food delivery all under one roof, you're not going to be able to reduce your cost enough and you're cooked, which is true, but Lucid is on paper losing catastrophic amounts of money for every vehicle sold. and there's not a lot of vehicles actually being sold. Rivian likewise and BW despite being depending on the year the largest or second largest automotive manufacturer by vehicles sold can't make electric vehicles that they can sell to consumers for a profit getting their ass kicked by Tesla. So if this happened, this new entity would have an unprofitable EV business at very small scale from Lucid and Rivian with some reasonable tech plus a burning bureaucratic red tape and crusted dumpster fire known as Volkswagen just to slow things down even further and then would somehow also need to integrate the autonomous vehicle technology into the mix. In this hypothetical world, this new entity would somehow need to do things it has not already been capable of doing. The only thing that's already been achieved with Door Dash and Uber is building out the existing network and the infrastructure, the app, the dynamic pricing, an app. Now, I don't want to downplay the significance of building this, but relative to solving general autonomy to profitably mass-producing autonomous electric vehicles, handling the app, the digital bookings, matching customers based on the location with the ride, a Door Dasher, it's trivial. The question I want to ask everybody watching is, do you think this new giga entity would actually be able to compete against Tesla? Back to Sawyer's post, 0% chance Tesla buys Uber and Jason's reply. Big M&A is coming to space. Now, on this point, by the way, I actually agree. I think out of desperation, there will be many mergers and acquisitions here. I'm not very good at math, though. But if one Titanic merges with another Titanic, doesn't that just mean you have two Titanics? Anyway, back to his post. If you don't believe me, the best thing to do is short Uber, Door Dash, Lyft, Riven, and Lucid. I don't recommend you do that because in 18 months, those four companies will be worth 50 to 100% more and or have been involved in some form of M&A transaction. Amazon, Google, Whimo, and Tesla can buy these assets for 1 to 15% of their valuations. And any of these transactions moves them right to first place in what? in autonomy. So the answer biased thinkers need to ask, well that would be me, is why wouldn't they? Amazon plus Uber plus Whimo equals number one player. Tesla plus Uber equals number one player. Now I'm going to jump in here and just say that Tesla plus time equals number one player. He adds Uber plus Door Dash plus Euro plus Lucid equals number one by far player. and Whimo plus Door Dash plus Uber equals number one player. When a huge market like autonomy emerges, the next thing that happens is consolidation. By the way, I agree on this. There will be some. I suggest you research this. In the PC and internet eras, which I lived through and participated in. All the best, JCL. A disclaimer, I have stakes in almost all of these companies. So, I am not talking my book around any single one. The entire book is what I'm talking about. That might explain something. Now to Jason's overall point, I do actually agree there will be mergers, acquisitions. There'll be a lot of talks. Maybe not all of these will actually result in a transaction, but any company, whether it's the food delivery business, the human transport business, Uber, Lyft, and so on. The automotive business, if they have any sense at all, they realize the existential threat represented by safe, ubiquitous, lowcost general autonomy. As a card carrying member of the extremely biased thinkers club, I don't see any way other than the ability to press multiple magic buttons to just magically catch up to Tesla. I don't see any way that one any company is going to come close to matching Tesla's hardware cost. Meaning the amount of money Tesla spends, the capital required to put a single autonomous vehicle on roads at scale Cyber Cab easily going to be sub $20,000 for Tesla to produce. I do not see any way that any company period will be able to put a comparable autonomous vehicle on roads for even close to as low a cost as Tesla. Now, some people would say, "Well, you're just a biased thinker, Stephen." And I would say, "Did you know the list of companies today profitably producing electric vehicles on Earth is just Tesla?" So please explain to me how Tesla who have just reinvented the automotive manufacturing system to dramatically lower the cost to produce a vehicle. That vehicle is CyberCap by the way and that vehicle itself being a dedicated robo taxi doesn't have a lot of the unnecessary cost and mass and complexity of a human-driven vehicle. It's a two-seater. Less material, less mass, less everything. Meaning it's material cost will be significantly lower. Its production cost will be significantly lower. This is the only company today profitably producing EVs at scale. I've yet to hear a single reasonable argument for how any company, whether or not they're part of some giga merger or not, could come even close to matching Tesla's Cybercap hardware cost. And Jason's a very smart guy. So surely he's not [ __ ] enough to think they'll be able to match Tesla's hardware cost either, cuz he's not a total [ __ ] So presumably, please correct me if I'm wrong, Jason. Presumably then the thought is they'll either have extremely lowbudget tacky non-luxurious alternatives but ass ugly less safe no screen blah blah blah and try and match on cost or they'll try and match on the features and functionality but be at a massive cost disadvantage. So this new Giga Edity will not be able to match Tesar on cost or if they do they'll have a dramatically inferior service. So they're not going to benefit from enormous margins on their service. They'll have to compete with Tesla in cost per mile, but they won't have juicy margins. So, they'll either lose money or barely make any. Also, Tesla's the only company with the enormous amount of data required to solve general autonomy. So, I'm not sure what Jason's thesis is around how the autonomy piece of the puzzle ties in. So, let's just recap where we're at. No one can compete with Tesla's hardware cost. And I'm sure Jason understands that as well. No one's going to have comparably generalized autonomous software. So, what are we talking about? really limited rollouts in niche markets at a very slow pace while Tesla just blasts ahead. My best guess then is that Jason is of the belief that the Uber network, the Door Dash network, everything that entails, their existing app, their existing customer base, the software, the algorithms able to match people with rides so efficiently is such an enormous advantage. plus the existing brand that they won't go away even if they're crippled by a massive cost disadvantage because people are used to using Uber, they're used to using Door Dash. They'll somehow be able to overcome insurmountable cost disadvantages by having an existing brand and platform that people know and use. Is this what I'm hearing? Here's my extremely biased opinion. I believe that even if some kind of giga merger does occur between a bunch of different companies, Uber, Door Dash, Rivian, Lucid, VW, some autonomous vehicle startups, they will not without having access to multiple magic buttons be able to match Tesla's cost, their scale, their general autonomy. If they somehow were to have a business, they can operate without losing money on every ride offered to customers trying to compete with Tesla on cost, which I find exceedingly unlikely over a long time frame. Don't get me wrong, I think they could limp along for at least a decade plus. But at some point, you just got to pull the plug. But even if this were to play out, and they somehow are still solvent a decade from now, Uber does have a platform. They are partnered with a dozen plus other companies all offering autonomous vehicles trying to compete with Tesla on cost. Tesla's business would be like a golden encrusted diamond and whatever this other thing is that Jason is proposing would be like a turd with sprinkles on it. What am I missing here? Thanks for watching. If you appreciate the content and want to support the channel, check out the links below where you can get early access to daily videos, unlock hundreds of exclusive pieces of content, and plenty more. My new 20-year Tesla and SpaceX valuation model is now also live on Patreon to supporters at the investor level and above. AG1 has been part of my daily health protocol for half a decade. It's packed full of vitamins and minerals and helps me fill in nutritional gaps while supporting energy, digestion, and immune function. It also has prebiotics and probiotics to promote gut health. I take my health very seriously, and so should you. Try AG1 today by visiting drink ag.com/smr or click the link in the pin comment and enjoy a free welcome kit with vitamin D3 plus K2 and AG1 travel packs. 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