That's what I think of Uber's (UBER) prospects after interviewing one of my absolute favorite CEOS, Dara Khosrowshahi, on Squawk on the Street this morning.
I think that Uber may be violating a fundamental tenet that I learned was crucial about business, the warrior dictum of Frederick the Great: "He who defends everything defends nothing." Uber may be trying to do too much to be able to dominate.
I know that the key to giving this company a stock premium on revenues despite the hemorrhaging is to have a platform, an ecosystem: Uber, Uber Eats, Uber freight, all sorts of in-the-works verticals.
But it costs a great deal to beat these entrenched interests at a time when labor, at least in this country, is at such a premium.
I want to analogize by thinking about Uber and another company: Starbucks (SBUX) . Uber sells a commodity at a discount. It's a labor intensive company at a time when workers are hard to find. Where is the economy of scale? Where's the leverage to the model?
Now contrast that with Starbucks: I have a cup of Starbucks coffee four days a week. I pay a premium for it. Why not? They call it the Cramer; it's my drink. I love that. They get $6 from me. What is the cost of that cup?
Meanwhile, judging by those losses, I can only surmise that Uber is selling a $10 ride for $8. The only way that they can make this work is if they can raise prices.
But can they? Do you think they can raise prices at Uber Eats when DoorDash is playing with free money? I don't think so. Uber Freight is great when freight rates are escalating, but not when they are going down.
And Lyft's (LYFT) a real challenger. The two companies need to get their prices up but they look like they are on the race to the bottom, and when they get there Lyft will be making money.
Random musings: Some of you might have seen the New York Post article about me and my twice a week fantasy football show. If you are a guy or a gal who is rabid about fantasy and you work on Wall Street or its equivalent in other cities let me know on twitter and I might just have you on!