▶ Full Post Text
I've always liked Uber as a company (active user, especially internationally) due to its nature of being an asset-light company that has been printing a lot of cash. But I've always wondered where does it fit in a self-driving world (the future) and why is this boring thing so cheap.
**TL;DR**
* Trailing 12-month free cash flow crossed **$10B** for the first time ever, and Uber got there spending only **\~$308M** on capex (**3%** of operating cash flow). One of the most asset-light cash machines at this scale.
* Reported Q2 net income was **$2.4B**, but **$1.6B of that was paper gains** on Uber's stock holdings in other companies (Delivery Hero, Aurora, Didi).
* On the call, Uber committed **$10B+ to a robotaxi/fleet program** (equity stakes in AV partners **plus** balance-sheet support for fleet ops, real estate, and off-take on **120,000 vehicles**). Separately it's taking **€14.2B of debt** to buy Delivery Hero (**€14.8B** deal).
* At **\~$75** it trades at **2.8x sales** vs a **4.1x** average over its own history. It really is cheap versus itself.
* It feels like the asset-light company is deliberately becoming asset-heavy.
\-------------------------------
Uber is committing **$10B+** to a robotaxi/fleet program as they've mentioned in their latest earnings call, and it's real (not detailed in the 10-Q tho). The 10-Q backs the direction in its own dry way, in the risk factors:
>we may need to incur additional debt to finance the purchase of autonomous vehicles or infrastructure to support autonomous vehicles
Uber's whole pitch was "**we own no cars**" is now moving towards "**Uber may borrow to buy cars and charging infrastructure**". That's a capital-allocation story that they can honestly back given their enormous FCF, and I think it matters more than the AV horse-race.
**On self-driving specifically**: Uber's answer is that it's the demand network the tech plugs into, not the tech itself. It sold its own AV unit years ago and now runs a "**hybrid network**" with **30+** partners. Just this week Wayve got a TfL license to run autonomous cars on Uber in London (electric Mustang Mach-Es, safety driver onboard, 100k+ Londoners on the waitlist). But if we actually take a look at the real scale. On the call the CEO said AVs are still "**less than 0.5%**" of Uber's \~300M weekly trips. This still is the bet of the future, and not their business today. The real risk, is that Waymo already runs a fleet on Uber **and** a competing fleet on its own app. So the network is real, but it isn't a moat if the AV owners decide they don't need the middleman. The **$10B** is Uber buying itself the option to own fleets if being the middleman stops being enough.
On another note, their **$14.8B** deal (**$14.2B on loan**) for Delivery Hero to expand to Europe, comes with them pausing **5 out of 7** planned new European market launches, keeping only Finland and Denmark. This pause is most likely tied to easing antitrust concerns around the Delivery Hero deal, as they already operate in several of those target countries.
I feel like Uber is pushing aggressively into different directions probably depleting their enormous FCF. They still have **$15.7B** in buyback, **$10B** to commit in autonomous program, and the Delivery Hero loan. Do you think it's better for them to focus on one direction, or push in all?
You can find my full analysis of Uber on my free substack here:
[https://secaura.substack.com/p/the-current-state-of-uber-uber-q2](https://secaura.substack.com/p/the-current-state-of-uber-uber-q2)