David Rosenthal: belief

Transcript context

…And not from the usual suspects either. And not from the usual suspects, yeah. They already have the investment from the internet portals, but Uber raises $3.5 billion from Saudi Arabia’s public investment fund and Didi raises $7 billion of its own. So that’s over $10 billion raised within a couple of months and they just basically start giving this money away to subsidized rides. Didi does something that I suspect even Travis and Uber, as Machiavellian as they are in the US, couldn’t even imagine and see it coming. Didi starts investing in all of Uber’s rivals around the world including Lyft in the US and Ola in India and Grab Taxi in Southeast Asia, and they announced that they’re going to literally, it's like the allies fighting the Nazis here. They have this global alliance to fight Uber that they start building. When people, investors and executives at Uber start seeing this happen, like what was going through their heads? I think they were dismissive of the global alliance because it was unclear what it really meant or whether there was much value in sort of integrating each other’s apps or how smooth that would be. I think the more meaningful thing, like Uber is bringing a couple of assumptions to its battle with China that I think are interesting to examine. One, obviously I think at the time Travis is pursuing a global network but this is not really a network effects business or if it is, it’s very local. So it was sort of unclear that Uber’s strength and the rest of the world would even translate into China. The great contrast is with Airbnb where I think they do have more of a global network effect because they’ve got travelers going back and forth across oceans. The other advantage I think Uber thought it had was capital advantage and what we really started to see in 2015 and 2016 was this unique capital market where there were all sorts of unique sources of capital that were willing to shower all these companies with money. I think it was more the fact that Didi goes in and gets money from Apple or that these sovereign wealth funds start to kind of provide capital that begins to convince all these companies that they are on a sort of unsustainable path. The investment in Lyft, the global alliance, I think the Uber guys, as arrogant and confident as they are, sort of shrug but it’s when a company like Apple or FoxConn gets into fray and starts putting money into Didi that I think Travis and Emil Michael, his deputy, start to wonder can they really win this battle.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.