Chief executives at Uber and Daimler ruled out acquiring each other’s companies or making a deal on buying 100,000 new cars.
What was expected to be a verbal sparring match turned into a thoughtful conversation between Uber’s Travis Kalanick and Daimler’s Dieter Zetsche. The two spoke Wednesday during an on-stage interview at Axel Springer NOAH, a two-day conference in Berlin of venture capitalists and technology companies.
Both executives ruled out rumors that each company was planning to acquire the other. They also denied a German magazine report published in March that Uber may purchase up to 100,000 cars for its fleet from Daimler.
They made a few good-natured jabs at each other as inevitable competitors. While Daimler has been investing in mobility services, Uber won’t be going into the car manufacturing business.
“Cars are not going away soon and companies like Uber are not going to be making them,” Kalanick said.
Zetsche said he’d met Kalanick several times and described him as a “frenemy,” a combination of friend and enemy. “We call that marriage in German,” Zetsche joked before turning more serious.
“We are competitors, of course,” he said. “There might be many areas where we are competitors in the future.”
Daimler has been making inroads to mobility in recent years that can compete with Uber. In April, Daimler announced that it’s merging two more mobility services in the U.S., RideScout and GlobeSherpa. These mobility firms join Daimler’s car2go carsharing business operating under Daimler’s Moovel Group subsidiary. Moovel also owns taxi-haling app MyTaxi and other mobility services.
Some of the speculation of a debate between the Daimler and Uber chiefs comes from speculation that Uber’s market value is close to Daimler’s. There have been recent announcements of a $3.5 billion investment in Uber by a Saudi Arabian sovereign wealth fund and a partnership deal with Toyota. At $62.5 billion, Uber is now potentially worth more than the stock market capitalizations of automakers BMW, GM and Honda and close to those of VW, Daimler and Ford, according to financial analysts.
In one of the more tense moments of their conversation yesterday, Zetsche asked Kalanick to justify how Uber was worth nearly as much as Daimler’s $70 billion stock market capitalization. Uber is a seven-year old company that has never produced a profit, Zetsche said.
Kalanick said that Uber is profitable in at least 200 cities it operates in, but is investing heavily in markets like China. Uber entered its 467th city in Accra, Ghana, this week.
“In the developed markets we are profitable, in the developing markets, we are massively unprofitable,” Kalanick said.
When asked by an on-stage interviewer about Uber becoming profitable, Kalanick acknowledged that investors do ask that question. He said it was largely a matter of entering enough cities, for long enough, to generate enough volume of its on-demand services to turn a profit.
As far as going public on the stock market, Kalanick was vague about the details but acknowledged it may happen.
“It is going to be somewhere between one year and 10,” Kalanick said about an initial public offering for Uber.