A2B - A2B Australia

[skc]

I don't deny that. But that was not the point of the Amazon analogy. The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.

But the reality is that Amazon has impacted only brick-and-mortar bookstores. Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.

I think there are 2 different points.

1. Does Uber need a profitable business model to compete with CAB's business? You seemed to use that as argument against the case. But the Amazon analogy showed that there are always a bunch of fools with their fantasy valuation models willing to fund the bleeding contest, so a profitable business model (short term or long term) is not a pre-requisite.

2. Will Uber successfully inflict damage on the incumbent? This is where the Amazon analogy isn't perfect...although it has taken sales away from incumbents that would otherwise have been there, and probably brought down margin in those specific categories that it sells. But these damages are hard to measure and involved what-ifs. Perhaps Xero would be a better example. Having said all this.... judging by how upset the Cabbies are, I am guessing Uber isn't exactly enhancing their business.

http://www.abc.net.au/news/2015-09-10/taxi-drivers-protest-outside-nsw-parliament-over-uber/6764398

If you think that Uber and the other ride-sharing service companies are seriously going to shrink the market for CAB's payment system, don't you first need to satisfy yourself that Uber and these other ride-sharing service companies have a profitable business model?

At some point, the investors that are funding these massive money-losers are going to demand to see a return. I have not seen any evidence yet that ride-sharing service companies are capable of making any return, let alone a cost-of-capital return, on investors' funds.

 

[Rainman]

I think there are 2 different points.

1. Does Uber need a profitable business model to compete with CAB's business? You seemed to use that as argument against the case. But the Amazon analogy showed that there are always a bunch of fools with their fantasy valuation models willing to fund the bleeding contest, so a profitable business model (short term or long term) is not a pre-requisite.

2. Will Uber successfully inflict damage on the incumbent? This is where the Amazon analogy isn't perfect...although it has taken sales away from incumbents that would otherwise have been there, and probably brought down margin in those specific categories that it sells. But these damages are hard to measure and involved what-ifs. Perhaps Xero would be a better example. Having said all this.... judging by how upset the Cabbies are, I am guessing Uber isn't exactly enhancing their business.

http://www.abc.net.au/news/2015-09-10/taxi-drivers-protest-outside-nsw-parliament-over-uber/6764398

Governments the world over will sooner or later take steps to regulate share-riding service companies and their contract drivers. I can guarantee that. What that regulation will look like is hard to say. How the cost of that regulation will be shared between the drivers and the share-riding company is even harder to say. For those reasons, I'd be very reluctant to forecast ride-sharing service companies as offering a sizeable and sustainable threat to CAB - and I say this as someone who uses Sydney cabs regularly and would prefer an Uber car any day if it was as convenient.

 

[McLovin]

I don't deny that. But that was not the point of the Amazon analogy. The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.

So between 1994 and 2003, while it was unprofitable, in your view Amazon did not wreck the traditional book business?
Was Amazon not at least partly responsible for Circuit City closing or for the trouble Radioshack has been in?

What explains the stagnation in Best Buy's revenue while Amazon chased them down and breezed past them?



That graph is the high water mark for BB, revenue has now fallen ~20%. On the other hand, Amazon's revenue has doubled. Just a coincidence? Maybe. Pretty damn big one though.

You'll never get a comparison that fits like Cinderella's slipper, but this sort of conclusion seems to be viewing things the way you want to view them...

But the reality is that Amazon has impacted only brick-and-mortar bookstores. Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.

 

[McLovin]

Governments the world over will sooner or later take steps to regulate share-riding service companies and their contract drivers. I can guarantee that. What that regulation will look like is hard to say. How the cost of that regulation will be shared between the drivers and the share-riding company is even harder to say. For those reasons, I'd be very reluctant to forecast ride-sharing service companies as offering a sizeable and sustainable threat to CAB - and I say this as someone who uses Sydney cabs regularly and would prefer an Uber car any day if it was as convenient.

Everyone seems so hung up on UberX. The threat to CAB's business remains the proliferation of app based payment systems for taxis. UberX has done a pretty good job of distracting everyone though. Given the stance of the ACCC it seems to be open season on that side of CAB's business.

 

[Rainman]

So between 1994 and 2003, while it was unprofitable, in your view Amazon did not wreck the traditional book business?

No, I didn't say the "traditional book business". I said:

... The point of the analogy was to show the damage that Amazon was supposed to have inflicted on incumbent retailers while it remained unprofitable.

Was Amazon not at least partly responsible for Circuit City closing or for the trouble Radioshack has been in?

I don't know. Is it?

That graph is the high water mark for BB, revenue has now fallen ~20%. On the other hand, Amazon's revenue has doubled. Just a coincidence? Maybe. Pretty damn big one though.

I don't know enough about Best Buy to say whether its decline in revenue is due to Amazon stealing market share from it. Was does Best Buy sell? I thought it was a big box electronics retailer.

But if that's the case, why has JBH not suffered a similar decline in revenue? Is it because Amazon is not in Australia? But there are plenty of Amazon-like on-line retailers in Australia selling exactly what JBH sells.

 

[McLovin]

No, I didn't say the "traditional book business". I said:





I don't know. Is it?



I don't know enough about Best Buy to say whether its decline in revenue is due to Amazon stealing market share from it. Was does Best Buy sell? I thought it was a big box electronics retailer.

But if that's the case, why has JBH not suffered a similar decline in revenue? Is it because Amazon is not in Australia? But there are plenty of Amazon-like on-line retailers in Australia selling exactly what JBH sells.

Fark mate. Are you a lawyer perchance?

If you don't know about Best Buy and Amazon's impact on their business then how did you reach the conclusion...

But the reality is that Amazon has impacted only brick-and-mortar bookstores. Other retailers it has not affected in any meaningful way, so the analogy falls a little flat.

WTF is a brick and mortar bookstore if not a traditional book business?

Anyway, I'll leave the parsing of statements to you. I made my point, you made yours, clearly we disagree.

 

[Rainman]

... If you don't know about Best Buy and Amazon's impact on their business then how did you reach the conclusion...

Calm down, Josephine. My remarks were intended for Australia. I simply don't know enough about U.S. retailing to meaningfully comment on the situation there. Maybe you do. But the fact remains that I was and am talking only about Australia.

WTF is a brick and mortar bookstore if not a traditional book business?

I really don't understand your point here. To be clear, I accept that Amazon, profitable and unprofitable, has wiped out traditional bricks-and-mortar bookstores.

But the contention that Amazon (and Amazon-like companies) have had or will have a significant impact on traditional retailing in Australia is less clear. I have offered JBH as a case in point whose ongoing business strength I don't think can be just explained away by saying that it is due to Amazon not being here, since there are plenty of on-line retailers in Australia selling exactly what JBH and HVN sell and both businesses are doing excellently.

 

[craft]

Fark mate. Are you a lawyer perchance?

He's an excellent driver.

 

[Smurf1976]

I have offered JBH as a case in point whose ongoing business strength I don't think can be just explained away by saying that it is due to Amazon not being here, since there are plenty of on-line retailers in Australia selling exactly what JBH and HVN sell and both businesses are doing excellently.

Books - if I know what book I want then all I need to do is purchase it. Online is far easier than going to a physical book shop. It is also reality that physical book stores, like record / CD stores, only ever carried a very small percentage of the total books / music available. If you want something that isn't absolutely mainstream then physical stores were always at a disadvantage there.

In contrast, if I'm buying furniture or a new TV then I want to see the furniture prior to purchase. Stores selling furniture won't disappear anytime soon for that reason. Some might buy a new sofa or dining table online but many will want a close look at it first and that requires a real, physical shop not just a website.

Taxis are a very different beast. It's a physical service, an actual car with a human driving it. You can't get from home to the airport online, you need a real car (or bus or train) to do that. All you can do online is the administrative side.

A better analogy than the likes of HVN is solar power in my view. It was never illegal to generate electricity for your own use, but doing so was totally impractical and uneconomic for 99.99% of ordinary households prior to the emergence of cheap solar equipment. What solar has done is to give consumers the means to use a resource they already have, sunlight, to provide a service comparable to that which was previously only available from a utility company. As a broad concept that's similar to ride sharing - technology enabling the use of cars that already exist to provide a service that was previously only available from a licensed taxi operator.

 

[Value Hunter]

I think Taxi drivers will start becoming Uber drivers en masse over the next few years. I recently caught a taxi that was passing by because I was in a hurry to get somewhere. It was a short trip and I paid the guy about $12. When I was talking to him he said he was going to become an Uber driver in a few months time.

He said he has been driving a taxi for 20 years. He said he paid $150 per day to rent the taxi for 12 hours. After paying this $150 he was netting $120 per day for driving 12 hours (and in busy areas of Sydney, not in the middle of nowhere). The reason is because although taxis still get some customers when they drive around, customers who actually phone a taxi to come and get them and mostly using Uber now, hence the volume of business for many taxi drivers is not enough to make a living. The taxi driver said the guy he rents the taxi from had 70 taxis originally but has now taken 30 of them off the road due to waning demand.

 

[galumay]

I think Taxi drivers will start becoming Uber drivers en masse over the next few years.

I doubt it, the UBER model is based on paying their drivers next to nothing, its basically slave labour. I dont think Taxi driving is paid as poorly generally as your driver implied.

 

[Rainman]

... The taxi driver said the guy he rents the taxi from had 70 taxis originally but has now taken 30 of them off the road due to waning demand.

I seriously question this. Are you sure the driver didn't say 7 instead of 70 and that he had taken 3 cabs off the road instead of 30?

There is scuttlebutt. Then there is good old fashioned BS. I think your taxi driver's claims are the latter.

 

[Wysiwyg]

Another stock selection lesson regarding buying in a downtrend. As I mentioned before, the lure to buy at cheap, bargain, perceived value levels is overwhelming for myself (very much less nowadays) and many others.

p.s. this could be the bottom :dimbulb:

 

[Value Hunter]

Rainman the cabbie struck me as an honest guy and I sensed he was telling the truth and yes he said 70, and the cab fare was $10.40 and he said just to pay him $10.00. I ended up giving him a tip and paid $12.00. Can I be absolutely sure he was not lying? No.

He (cab driver) said that he thought he could net $250 a day in profit (for 12 hours driving) if he was an uber driver. A work colleague of mine does Uber driving on the side one day a week. He says he drives a 12-14 hour day (he is available for 12-14 hours but is obviously not drivin the whole time and is at home a fair chunk of it) and makes an average of $500-600 in revenue per day. I guess once you properly deduct petrol and depreciation and maintenance on your car you are making a similar hourly rate to an entry level job. Not great but not terrible either.

 

[galumay]

He says he drives a 12-14 hour day (he is available for 12-14 hours but is obviously not drivin the whole time and is at home a fair chunk of it) and makes an average of $500-600 in revenue per day. I guess once you properly deduct petrol and depreciation and maintenance on your car you are making a similar hourly rate to an entry level job. Not great but not terrible either.

mmm....thats a hell of a lot more than my understanding of what Uber drivers earn. Like more than double.

 

[Rainman]

A work colleague of mine does Uber driving on the side one day a week and... makes an average of $500-600 in revenue per day...

$500 day? That is $2,500 for a 5 day week and $10,000 a month. That is far, far in excess of what I've heard Uber drivers are making.

 

[Triathlete]

Another stock selection lesson regarding buying in a downtrend. As I mentioned before, the lure to buy at cheap, bargain, perceived value levels is overwhelming for myself (very much less nowadays) and many others.

p.s. this could be the bottom :dimbulb:

Agree with your comments .....the question has to be does the stock hold here or continue to fall or does it go sideways now for who knows how long????

Definitely one to stay away from at this point in time...

Uber has had an impact on this stock.

 

[McLovin]

UberX legalised in NSW. This is a big announcement I think. CAB now has to not only fight to maintain it's traditional payment's business, but now has at risk the $100m or so in taxi services revenue, especially the radio network requirement for taxis.

Owners of taxi licence plates in NSW will receive compensation after the Baird government decided to legalise ride-sharing services such as UberX.

In a widely expected decision, the NSW cabinet has signed off on a compensation package for about 6000 people who own taxi licence plates in perpetuity, which is understood to include payments of $20,000.

Transport Minister Andrew Constance will hold a press conference on Thursday afternoon to unveil the details of the reform package following the decision to legalise UberX and other ride-sharing services, which is expected to include about $300 million a year in reduced regulatory costs.

Read more: http://www.smh.com.au/nsw/uberx-leg...ate-owners-20151217-glpt6r.html#ixzz3uXjqLVcb

 

[Klogg]

What's more is they're also under threat from SmartPay (SMP). They're growing relatively quickly in VIC - shown in their AGM presentation...

 

[So_Cynical]

(25th-February-2014) The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.

(26th-February-2014) Yes you are correct. Kids not fumbling with apps will be the downfall of Cabcharge. Wish I realised this before investing my money.

What's the bet Mike comes back saying he miraculously sold out in Sept 2014 at 6 bucks ~ CAB was $4.25 when Mike and i expressed our differing views.

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Just watched the CAB CEO interviewed on ABC24 re the NSW Govt Uber decision today, the guy seemed to be out of his depth.
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