CHICAGO | Economic & Business Development

[glowrock]

Originally Posted by Chisouthside

based from the article and a quick search it seems chicago might've been in competition with Dallas for the expansion, especially as nothing has been confirmed in Dallas?

That's how I took this article as well. Seems like Uber decided on Chicago over Dallas.

Aaron (Glowrock)

[bnk]

I don't see how they can open both Chicago and Dallas at the same time.

Wishful thinking from Dallas news IMO.

[marothisu]

Originally Posted by bnk

I don't see how they can open both Chicago and Dallas at the same time.

Wishful thinking from Dallas news IMO.

I believe they raised just over $8B in their IPO, so ...not 100% sure if it's just wishful thinking.

[bnk]

Originally Posted by marothisu

I believe they raised just over $8B in their IPO, so ...not 100% sure if it's just wishful thinking.

We will see but IMO doing both is way over extending themselves.

What do they think that they are they suddenly the Amazon.com?


Not likely.

[marothisu]

Originally Posted by bnk

We will see but IMO doing both is way over extending themselves.

What do they think that they are they suddenly the Amazon.com?


Not likely.

Even if they did 450K sq ft in Dallas too, it would still be combined only a third of what HQ2 was supposed to be. So no.

[VivaLFuego]

Originally Posted by LouisVanDerWright

I'm not worried about Uber lasting, they too suffer from the Free Money VC bubble, but at least they've truly changed an industry and added real value. Even if they have a day of reckoning I don't think the company will disappear, I think it will just have to restructure. I think their real goal is to hold out long enough to be able to eliminate drivers and just provide their service with self driving vehicles. That would make them profitable real quick...

If I recall their biggest issue right now is a driver shortage, at least at the prices they are willing to pay drivers.

Part of the business model is also outsourcing the depreciation expense of the capital assets (vehicles), which has been estimated at something like $11 billion so far in the US alone. If you eliminate the drivers willing to acquire rapidly depreciating assets for you, who will eat that cost for the automated vehicles, which will be more expensive to purchase and maintain than a late model Camry?

I do enjoy that all of you real estate guys are getting woke now that the SV techbros are "disrupting" your industry... eventually a sufficient swath of national public opinion will turn against this entire class of rent-seeking a-holes wasting an entire generation's greatest creative human talent on valueless endeavors.

[the urban politician]

Originally Posted by VivaLFuego

Part of the business model is also outsourcing the depreciation expense of the capital assets (vehicles), which has been estimated at something like $11 billion so far in the US alone. If you eliminate the drivers willing to acquire rapidly depreciating assets for you, who will eat that cost for the automated vehicles, which will be more expensive to purchase and maintain than a late model Camry?

Well, Uber can purchase the cars and the consumer can cover the depreciation. The money saved is in not having to pay the driver

I do enjoy that all of you real estate guys are getting woke now that the SV techbros are "disrupting" your industry... eventually a sufficient swath of national public opinion will turn against this entire class of rent-seeking a-holes wasting an entire generation's greatest creative human talent on valueless endeavors.

I don't count on that happening--at least for our younger generation. Many Millennials, being the fools that they are, speak out of both sides of their mouth. On one hand they hate Capitalist "evil corporations" yet on the other hand they hold up these tech founders as their heroes, even though big tech pretty much has all of the same lousy and self-centered, monopolistic business practices as the industries that they've "disrupted".

[Handro]

Originally Posted by the urban politician

I don't count on that happening--at least for our younger generation. Many Millennials, being the fools that they are, speak out of both sides of their mouth. On one hand they hate Capitalist "evil corporations" yet on the other hand they hold up these tech founders as their heroes, even though big tech pretty much has all of the same lousy and self-centered, monopolistic business practices as the industries that they've "disrupted".

Hmm, that's not a phenomenon I've witnessed, as a millennial who hangs out with other millennials and consumes my fair share of media directed at millennials. I'd be interested to meet a person who shares these two opposing views... although I don't know how long I'd want to spend talking with someone who views Mark Zuckerberg or Adam Neumann as "heroes"...

[marothisu]

Originally Posted by the urban politician

On one hand they hate Capitalist "evil corporations" yet on the other hand they hold up these tech founders as their heroes, even though big tech pretty much has all of the same lousy and self-centered, monopolistic business practices as the industries that they've "disrupted".

Don't believe the media BS on this. Most people put on a facade but in reality this isn't as true as you think. Talk is cheap. When the rubber meets the road, many people who say these things backtrack a bit. I've worked for 2 of the largest corporations out there, seen by tons as "The Man." Suffice to say that many of my coworkers have been hipster looking people you'd stereotype as anti capitalist complete with tattoo sleeves. Typical people living in hipster areas of Brooklyn too and fairly left leaning. Many of them. Yet they are working for the "man" and have no problems with it and when you talk with them... not as much hatred for capitalism as you'd think. I think if you came to my office, knew who I worked for, and saw the people who work here... you'd think twice about what you just said.

Tons of millennials actually love capitalism but of course sure, there's many who don't. There's also tons of people in their 60s and 70s who aren't keen on it either. So what? Although there's some traction with it and increasing, I think the amount of people who truly hate it are overstated. The increase is a reaction to what's going on right now in the world IMO. You are seeing in some ways one semi extreme reaction to another semi extreme reality/reaction.

[OrdoSeclorum]

Originally Posted by VivaLFuego

... who will eat that cost for the automated vehicles, which will be more expensive to purchase and maintain than a late model Camry?
.

Everything I've read--and common sense suggests--is that EVs are cheaper to maintain than ICE vehicles. And these costs should drop further with scale and competition.

[the urban politician]

Not earth-shattering news, but another suburban company moving to the West Loop:

Tucker Development is latest company to move to Fulton Market
Tucker will shift its headquarters to an office building where it has had a presence since 2016
By Joe Ward | August 20, 2019 11:15AM


The newest firm relocating to Fulton Market is one of the neighborhood’s most prominent developers.

Tucker Development has relocated its headquarters from suburban Highland Park to 954 West Washington Boulevard in Fulton Market, the company announced. The family-owned developer has had an office in the building since 2016 but will take an unspecified amount of additional space to accommodate the relocation.

https://therealdeal.com/chicago/2019...fulton-market/

[the urban politician]

Originally Posted by bnk

I don't see how they can open both Chicago and Dallas at the same time.

Wishful thinking from Dallas news IMO.

Sorry to let you down, but Uber is moving forward with a huge Dallas hub as well:

https://www.dallasnews.com/business/...allas-end-year

But at least Chicago didn't have to resort to this:

State, city and county leaders approved nearly $36 million in economic incentives to bring Uber to Dallas, and some of those include job creation targets.

[Handro]

Originally Posted by the urban politician

Sorry to let you down, but Uber is moving forward with a huge Dallas hub as well:

https://www.dallasnews.com/business/...allas-end-year

But at least Chicago didn't have to resort to this:

Wow, about the same size as the new Chicago office, too (450K SF vs 463K SF)

[bnk]

Originally Posted by the urban politician

Sorry to let you down, but Uber is moving forward with a huge Dallas hub as well:

https://www.dallasnews.com/business/...allas-end-year

But at least Chicago didn't have to resort to this:

Bummer

[IrishIllini]

If they deliver on 3k jobs that’s $13.3k per job. Has anyone moved to Texas without massive subsidies? It looks like Toyota got $40m. State Farm appears to have received $50m...Waste Management received incentives to relocate from Chicago to Houston. Looks like they were considering moving back to Chicago or Denver, Austin, or Nashville last year...

[Randomguy34]

Originally Posted by bnk

Bummer

This doesn't have to be a zero-sum game, where we need Dallas to lose for us to grow. I think the fact that Chicago can now recruit companies w/o providing incentives is a good thing and is a product of how attractable we've become.

[LouisVanDerWright]

Originally Posted by VivaLFuego

Part of the business model is also outsourcing the depreciation expense of the capital assets (vehicles), which has been estimated at something like $11 billion so far in the US alone. If you eliminate the drivers willing to acquire rapidly depreciating assets for you, who will eat that cost for the automated vehicles, which will be more expensive to purchase and maintain than a late model Camry?

The consumers will still do it to some extent? Think of it this way, if you own a car and work downtown you could have it drive you to work and then, instead of sitting in a garage all day where you get charged to park, you could have it Uber all day and make you money, just not as much money as you would have made driving for Uber. But you don't want to drive for Uber anyhow because you already work downtown for someone else...

Combine that with the fact that a Model 3 is designed to semi truck grade design life standards (i.e. 1 million miles) and you have an awful lot of people who would probably like to change their "fastest depreciating asset" into an actual investment that makes them money when they aren't using it.

I do enjoy that all of you real estate guys are getting woke now that the SV techbros are "disrupting" your industry... eventually a sufficient swath of national public opinion will turn against this entire class of rent-seeking a-holes wasting an entire generation's greatest creative human talent on valueless endeavors.

What are you talking about being "woke"? Wework is a pyramid scheme, Airbnb is not, Amazon is not, Facebook is not. Not all VC funded tech companies are a scam defrauding a whole generation or whatever you called it.

Wework definitely is a scam with zero path to profitability.

Originally Posted by marothisu

Don't believe the media BS on this. Most people put on a facade but in reality this isn't as true as you think. Talk is cheap. When the rubber meets the road, many people who say these things backtrack a bit. I've worked for 2 of the largest corporations out there, seen by tons as "The Man." Suffice to say that many of my coworkers have been hipster looking people you'd stereotype as anti capitalist complete with tattoo sleeves. Typical people living in hipster areas of Brooklyn too and fairly left leaning. Many of them. Yet they are working for the "man" and have no problems with it and when you talk with them... not as much hatred for capitalism as you'd think. I think if you came to my office, knew who I worked for, and saw the people who work here... you'd think twice about what you just said.

Tons of millennials actually love capitalism but of course sure, there's many who don't. There's also tons of people in their 60s and 70s who aren't keen on it either. So what? Although there's some traction with it and increasing, I think the amount of people who truly hate it are overstated. The increase is a reaction to what's going on right now in the world IMO. You are seeing in some ways one semi extreme reaction to another semi extreme reality/reaction.

I find that most political "opinions" of our generation are not genuine, but rather driven by crushing white guilt and/or obsessive virtue signaling. It's not about actually saving the environment or helping the poor, it's about quick bullshit you can slap up on social media to make it look like you give a shit. The plastic straws thing is a perfect example of this. My brother in law lost it on me when I said I recycle them anyhow and he's like "they clog the recycling machines man" and then like 8 hours later he's asking me whether I can help him replace the front door to his house with a $800 new one with a bigger window...

I'm like dude, you realize the amount of foam insulation in the perfectly serviceable 10 year old door you want to replace for no good reason is like the equivalent of 100,000 straws right?

[marothisu]

Originally Posted by VivaLFuego

I do enjoy that all of you real estate guys are getting woke now that the SV techbros are "disrupting" your industry... eventually a sufficient swath of national public opinion will turn against this entire class of rent-seeking a-holes wasting an entire generation's greatest creative human talent on valueless endeavors.

I'm not a real estate guy, but the fact that they are losing $5200 per 'office' worker who comes in the door on average per year is pretty crazy. They should have a clear path to profitability too - though I admit I haven't read all of the IPO document but I understand enough based on what I've read and what my friends have told me. If they are leasing their space in a building at $X/square foot, then they should be figuring out what the margin is to break even $X+$Y/square foot. The fact that they owe literally BILLIONS in back rent to me at least is pretty crazy and shows that they are either charging too little for their rent relative to what they're paying and all the other overhead such as employee costs. How do they expect to pay all of this back without it adding up even more and then start to turn a profit? It's going to take awhile or they're going to have to start jacking up the rent on their existing clients, which isn't going to be appreciated by many of them.

Not only that, but they had a net loss of nearly $2B last year. Also not to mention that there's similar companies out there like IWG with actually more square footage than WeWork that actually have net income and had more revenue than WeWork...but are valued at something like 1/15 of what WeWork is valued at. WWC is severely over valued.

I'll be shorting their IPO. It's a great idea but WWC is not even close to the shining example of companies who can actually turn it into a profitable business. If you want that, look at companies like IWG. This whole thing to me just screams that they're trying to raise money to pay back some of the tons of rent it owes..except they still have an actual spending type of problem that will continue even with an IPO.

https://markets.businessinsider.com/...9-8-1028460674


Also, the CEO is doing some shady stuff. He's bought real estate and then leased it to his own company he's the founder/current CEO of, pocketing the $$$.

[Kenmore]

Originally Posted by VivaLFuego

Part of the business model is also outsourcing the depreciation expense of the capital assets (vehicles), which has been estimated at something like $11 billion so far in the US alone. If you eliminate the drivers willing to acquire rapidly depreciating assets for you, who will eat that cost for the automated vehicles, which will be more expensive to purchase and maintain than a late model Camry?

I do enjoy that all of you real estate guys are getting woke now that the SV techbros are "disrupting" your industry... eventually a sufficient swath of national public opinion will turn against this entire class of rent-seeking a-holes wasting an entire generation's greatest creative human talent on valueless endeavors.

[VivaLFuego]

Originally Posted by OrdoSeclorum

Everything I've read--and common sense suggests--is that EVs are cheaper to maintain than ICE vehicles. And these costs should drop further with scale and competition.

That's the promise of EVs, though there is insufficient lifecycle data/experience to actually draw that conclusion. The true impact of scale economies (which loops in issues like charging infrastructure, peak power capacity, etc.) is also an open question.

It's also a distinct issue from autonomous vehicles - the labor savings only exist if the car is truly driverless, and it's hard to see how this won't entail very frequent preventive maintenance testing and checks on all sensors and sub-systems to maintain reliability and safety. Remember, fail safe in transportation means either stopping completely or entering a severely-restricted performance mode, so that means a major degradation in service quality and desirability. Right now that risk is entirely on the human drivers and their vehicles that allow them to drive for quite a while with a check engine light, clunky front end, low tire pressure, passenger airbag warning light, bumpers and lamps covered by snowpack, etc.

Originally Posted by the urban politician

Well, Uber can purchase the cars and the consumer can cover the depreciation. The money saved is in not having to pay the driver

This gets at the peak/off-peak dilemma inherent to urban passenger transport. Do you amortize the capital cost of the peak period vehicle fleet across all riders or only the peak or peak-of-peak riders? The peak surge starts to look very different once you're charging people to cover the cost of that marginal extra vehicle that will only serve 1-2 trips a day in the peak of the peak demand.

Depreciation expense also isn't a terrible thing for profit-making enterprises since you get some of it back in reduced tax burden, but that doesn't apply to what is arguably the lossiest company in history before even counting the depreciation losses that they've outsourced to date.

There are potential efficiencies for long-haul freight trucking on standardized well maintained controlled access highways (interstates) with intermediate way-stations immediately adjacent. This is potentially positive for Uber Freight (and its Chicago office). Carrying passengers is a different manner, particularly in congested urban areas.