Uber Isn’t Worth $17 Billion | FiveThirtyEight: "Not only does this table point to devastating effects on its value should competition force Uber to cut its 20 percent take, but it also reveals a danger for Uber (and its investors) in focusing too much on growth in gross receipts. Uber may be able to expand its market by charging less, but the effect on value of doing so will be negative.
This framework lends itself easily to other narratives. For instance, one of the more optimistic takes says that Uber is in the logistics market, i.e. it’s a player in any business that involves moving people or things from one point to another. That would lead you to define Uber’s market more broadly and come up with a much higher valuation. As you consider these possibilities, though, it’s worth keeping in mind that investing is not a game of possibilities but one of probabilities.
The list of Uber’s investors includes some of the biggest names in venture capital, and you may be tempted to conclude that given their pedigree, they must know something we don’t. You may be right, but I wouldn’t be that quick to conclude that smart investors always make smart investment judgments."
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