Prepared Remarks
Equity Investor, Macro Commentary
Uber's potential Instacart acquisition could create valuable marketplace and route-density synergies. Scaled marketplace assets are rare; buying one would also keep competitors from consolidating grocery delivery, a sticky category with large average orders. Growth alone is not the measure of the deal, and tech buybacks are overrated. x.com x.com x.comÂ
M&A beats buybacks at Uber, and @_balaji_km's defense of its deals is turning the stock into a buy. Per @_balaji_km, ezCater has nearly 10 times a typical US delivery order size, is accretive to delivery margins and earns a better return than buying back Uber's own stock. He adds that Uber deployed no capital on M&A from 2022 to 2024 while organically building category-leading positions, and has spent a smaller share of free cash flow on deals than DoorDash while growing about 20%. x.comÂ
DoorDash may be seeking acquired growth because its market share looks to have peaked. Its interest in buying Instacart looks desperate given its poor platform, adding to the short-DoorDash side of the long-Uber pair. x.comÂ
Uber's large, successful network and marketplace give it a moat. The stock is in stage 4, but its fundamentals still appeal. x.comÂ
Uber's demand-side scale could let it aggregate fragmented or commoditized autonomous vehicle supply, though judging by the stock price nobody believes this. @WaterworldCapi1 argues autonomy at scale removes the need for its driver network and invites many competitors. But scaling rivals may not be cheap, Uber need not build its own fleets, and the shift will take decades, giving a hybrid network time. The stock becomes interesting only if the price gets low enough. x.com x.com x.com x.comÂ
Potential buyout news involving DoorDash could fuel substantial upside for Instacart. It is finally starting to break out, and could easily double from here. x.comÂ
American demand for delivery makes DoorDash hard to bet against despite reports it may acquire Instacart. Analysts target over $250 against a $169 share price. x.comÂ
Uber has big long-term secular problems, enough to make even CEO Dara Khosrowshahi's $10M token insider buy a moment to consider shorting, though actually shorting is not recommended. Beyond the Waymo and robotaxi threat, an AI agent that constantly checks every app for the best price would hurt Uber, consistently the highest-priced ride service. Uber would need to lower prices, and it lacks the tech stack. x.com x.comÂ
DoorDash's EPS beat is mostly tax-driven, and the apparent discount on its Instacart purchase will take time to matter. Despite a strong quarter, $1.06 GAAP EPS at a 3.9% tax rate would be about $0.85 at 23%, roughly in line with consensus; organic GOV growth stayed at 23%. DoorDash is paying 11.7x annualized Q3 EBITDA for Instacart versus its own 16x multiple, but the $17B deal won't close until late 2027 or 1H28, and management plans to reinvest more than 100% of first-year synergies. x.comÂ
Uber looks cheap, and insiders who know the company best are buying, a point @SteurJonas69716 raises. The stock is a solid buy as long as robotaxis do not kill the business, which is doubtful. x.com x.comÂ
Uber looks rather negative because driver reclassification, consumer cutbacks and easy switching threaten its business. Making drivers employees could raise costs and push ride prices up around 40%. Food delivery and comfort rides are cut when budgets tighten; riders switch to Lyft or Bolt for a few euros. Tesla or Waymo could bypass Uber with their own apps, and Google can scale quickly. Despite being a great company, Uber has too many unknowns; it is preferable to stay on the sidelines. x.comÂ
Autonomy could expand the ride market tenfold, giving Uber a long growth runway if it does. That is the true 10x opportunity, like ridesharing's expansion of the taxi market. Uber will be a $1 trillion company by 2035. Improved autonomous-vehicle margins are possible but uncertain. x.com x.com x.comÂ
