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Nightmare On Car Street: The Uber-Effect

So, as of its latest capital raising, Uber is now valued at USD$41billion. According to The Wall Street Journal, that valuation – which followed a competitive bidding process between heavy-weight investors – puts it at twice the USD$19.92billi


So, as of its latest capital raising, Uber is now valued at USD$41billion. According to The Wall Street Journal, that valuation – which followed a competitive bidding process between heavy-weight investors – puts it at twice the USD$19.92billion market value of Fiat Chrysler Automobiles NV, for instance.

Now who would have imagined that, and what does it mean?

It means a nightmare for carmakers in developed markets. Not now, but soon. 

The rapid spread and enthusiasm for Uber’s internet ride-sharing service, providing “mobility on demand” for its users, signals a change in the way people think about cars.

Why own an asset that sheds 10-15 percent of its value (or more) the day of delivery, and continues to fall until sold for a minor fraction of its purchase and ownership cost?

Why indeed; why not instead share a car? Uber, US-based Zipcar, and here, GoGet, among others, provide alternative ‘personal transport’ models that pairs the convenience and benefits of a car, without “the hassle and expense of owning one” (GoGet’s words). 

China

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