THE GHOST TRAIN
THE FINANCE GHOST: Why I’m hailing Uber
It offers the convenience of a single app that meets all transport needs, whether for people to travel or for things to be delivered, and the share has further scope to grow
In the past 12 months Airbnb has delivered a return of 16.5%. That’s certainly not bad, is it? But Uber is up 44%, so that has proved to be the right choice over this period. I can’t resist a cautionary tale about IPOs in frothy markets, as Airbnb is still trading below its hyped-up price on the first day of trading back in 2020.
Both these companies represent the new-age economy, in which platforms connect owners of assets with people who need to use those assets for a short time. At Uber, it’s all about transport — whether of people, food or parcels. At Airbnb, the focus is on accommodation and related experiences. On paper, these sound like very similar businesses. Both of them have even managed to achieve the ultimate success for any brand: becoming a verb! In practice, though, they appear to have very different moats and, arguably, growth prospects. This is why I’m a shareholder in Uber and not in Airbnb...
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