Starting from Tesla's self-driving technology and Uber's effort to create a non-human driven "taxi", the Softbank and associated investors thought it would be a wise investment decision to insert 1$ Billion into Uber, which is prepping for an IPO.
Under the terms of the proposed deal, investors would purchase from a pool of Uber stock specifically earmarked for the self-driving technologies unit. Uber would maintain majority control of the self-driving arm and would use the investment to fund its research and development. The deal would value the self-driving business at $5 billion to $10 billion, the people said.
So Uber's stock price will shore high, right? Well... not so fast. This investment might be a boom and bust.
But Uber is under scrutiny for its losses — its net loss was $842 million in the fourth quarter — and self-driving technologies are expensive. A $1 billion infusion could ease worries about how costly it is to develop autonomous cars.
What do YOU think? Do you think self-driving tech is just a gimmick or are we actually seeing the future?
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Has the potential indeed. I just don't know if Uber or other tech companies like Tesla can offer self driving cars with a consumer-friendly price; just not feasible.
But. Who knows. This R&D investment might lead to a breakthrough.
WeWork model is similar too... There is going to be a huge blowup at some point once all the free rent burns off.
It's just another way to get scrutiny off of the perpetual losses, and onto an area where the return expectations are pushed out years into the future, with the acceptance of a ton of risk. I'll assume that they will be heavily transparent to ensure that none of that money is used to fund their general operating losses... wink, wink.
That's not to say it doesn't make sense - their entire game is moving people from place to place, as effectively as possible and connecting people with transportation... how could you not want self driving cars to eliminate the hassle of independent contractors?
As to self driving technology itself? I think it's worthwhile for companies that make money with a vested interest in it. Why not? It could be huge! But again, it's suited for companies like Amazon, Google, Etc. who have the cash to do it paired with operating businesses that make money.
Moreover, whoever develops it should embrace a very large reserve of lobbying cash to make it a reality. You'll have to have entire industries change or modify how they do things - like insurance. Who is to blame in a driver-less car wreck? The programmer? - There are a ton of great, wonky podcasts about this but it's beyond me to think about.
Huh I didn't think about the question of insurance; I would wager that they will do some tests in order to find out whether it is the program's or driver's fault, but definitely that would come as a grey line in the insurance industry.
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