Why is Uber raising more money? Last month the upstart transport darling raised $1.2 billion, valuing the company at over $17 billion. That’s higher than any valuation on the Russell 2000 and higher than over half of the S&P 500. Now Uber breaks news again announcing that it has lowered prices in NYC to compete with (read undercut) licensed taxis. Uber is as much a super-intelligent communications company as a ride platform–and the Uber website today features a full page comparison of common trips across Manhattan. Looking at it, you’ll never hail a cab again. (UberX in NYC is different than UberX in other US cities, where it’s primarily a ride-sharing service. In NYC the Uber drivers have taxi licenses–they’re required to.) But with a valuation like Uber has, they could give the rides away for free for a long time, just to dominate market share. So why would Uber need more money?
If Uber has learned anything from Amazon and Google, it’s that you can’t have too much money. Uber’s ambition is massive: they want to do everything–water your flowers with drones, deliver pizzas with automatic cars and copter you to the Hamptons. When your business plan is to hurry the future forward, there is no such thing as too much cash. The taxi is to Uber as the bookstore is (was?) to Amazon–about to go extinct.