David Hay — Making Hay Monday: mobility as infrastructure & Uber (UBER)
"To Uber" has become a verb — like "to Xerox" and "to Google" before it. The reclassification of mobility from a margin-challenged convenience sector into a capital-light, AI-optimized infrastructure layer — and the platform that has already won the scale war.
One-line take: A themed MHM arguing that mobility is quietly being reclassified from a convenience sector into infrastructure — a capital-light "urban operating system" where software-defined routing + AI (matching, routing, pricing) lift once-break-even economics, cities subsidize platform transit (~$39B earmarked in the U.S.), and last-mile logistics platforms (Amazon, DoorDash, Uber, JD Logistics) capture the rent. The pick: Uber (UBER) — a ~$170B platform that has "won the scale war" and crossed from cash burn to return: Q3-2025 revenue $13.5B (+20%), gross bookings ~$50B (+21%), Adjusted EBITDA +33%, and ~$9.2B 2025 FCF (~5.2% yield). Three engines (Mobility / Delivery / Freight) on one platform, plus a fast-growing fourth — Advertising (~$1.5B run-rate, +~60%). Yet it trades ~21× 2026 earnings / 3.4× sales vs a frequent 4.5× sales (→ ~$135 one-year target). Risk is sentiment + AVs, but Hay sees self-driving as more catalyst than threat (Uber may integrate AVs in the U.S. this year). "Growth at a reasonable price."
1. Stocks & names mentioned
| Ticker | Name | Research | View | What he said | At |
|---|
| UBER | Uber Technologies | QT · SA · STK · FA | Positive | The week's pick — a ~$170B platform that "has already won the scale war" and crossed "from investor burn to shareholder return." Q3-2025 revenue $13.5B (+20%), gross bookings ~$50B (+21%), Adjusted EBITDA +33% ("textbook operating leverage"); ~$9.2B 2025 FCF (+30%, ~5.2% yield; ~$7B+ even backing out stock comp). Three engines (Mobility / Delivery / Freight) on one platform, plus a rapidly scaling fourth — Advertising (~$1.5B run-rate, +~60%, higher-margin). Valuation "stuck in the loss-riddled past" — ~24× 2025E / ~21× 2026E earnings, 3.4× sales vs a frequent 4.5× → ~$135 one-year target on 20% 2026 revenue growth. Risk is sentiment + AV competition, but Hay views self-driving as "more a growth catalyst than a threat" (Uber may integrate AVs in the U.S. this year). "Growth at a reasonable price." | read |
| GOOGL | Alphabet (Google) | QT · SA · STK · FA | Neutral | The verb-as-moat analogy — "to Google" (like "to Xerox") became a verb, and both were "massive winners in their heyday"; Google now "continues to make hay in a big way" at a ~$4T market cap. Cited as the precedent for Uber's noun-becomes-verb dominance, not a fresh call on Alphabet. | read |
| AMZN | Amazon | QT · SA · STK · FA | Neutral | Named among the last-mile logistics platforms (with DoorDash, Uber, JD Logistics) "now orchestrating fulfillment in real-time," and as the AWS analogy for how monetization expands with usage as movement becomes programmable. A sector-illustration reference, not a call on AMZN. | read |
References only (no ticker created): DoorDash (DASH) & JD Logistics — named with Amazon/Uber as the platforms displacing legacy gig logistics; Waymo (Alphabet) & Tesla (TSLA) — the autonomous-vehicle competition cited as the main risk (and possible catalyst); plus Xerox (the earlier noun-to-verb winner), Momo/PChome (n/a here), and Satya Nadella (the epigraph). The bottom Tracked Portfolio is deferred to the following week (and renders as an image elsewhere), so david-hay/portfolio.json is unchanged.
2. Talking points
Mobility's overdue reclassification — convenience → infrastructure
- For decades mobility was seen as a margin-challenged, cyclical convenience sector. Quietly underway and "almost completely underpriced": its reclassification as a capital-light infrastructure layer underpinning urban logistics, commuter flow, and real-time economic routing. "Movement is becoming essential infrastructure."
The structural shift — fractured travel patterns, fewer cars
- Post-COVID, the 9-to-5 traffic wave fractured: U.S. midday transit +15–25% vs pre-pandemic, weekend mobility now exceeding weekday in some cities — yet car ownership is falling (e.g., Seattle's residents-per-vehicle ratio). Higher rates, insurance up 25% in 18 months, and congestion make personal cars "a luxury good rather than a default."
Cities are accelerating the divergence
- Congestion pricing (NYC's $15 Manhattan toll), micro-mobility filling bus gaps, low-emission zones, and flexible-routing maps push riders toward platform-based services — "software is as critical as asphalt."
Last-mile logistics — from warehouse minimization to dispatch responsiveness
- With just-in-time mothballed, the focus shifted to maximizing dispatch responsiveness. Software-defined routing (Amazon, DoorDash, Uber, JD Logistics) is displacing legacy gig logistics; AI dispatch already cuts cost-per-delivery 5–12%, worth 200–500bps of gross-margin expansion.
The "platformization" of movement
- Like the shift from boxed servers to the cloud, platforms now let merchants and cities "call physical movement the way developers once called server power." Delivery becomes a function, fulfillment becomes programmable, and — as with early AWS — monetization expands with usage.
AI is the engine room
- Every profitable platform turns on matching, routing, and pricing — and AI improves all three (LLM-driven predictive matching, reinforcement-learning rerouting, real-time elasticity-based pricing), turning once-break-even economics into margin improvement.
Validation in early-adopter cities
- Berlin, Singapore, and parts of California are folding private-platform data into public transit (multimodal one-ticket bundles); "digital twin" models simulate zoning and price road access. The mobility grid becomes "a software-defined service, no less critical than broadband or power."
Governments are subsidizing it
- Infrastructure bills across the U.S./EU/Asia fund on-demand, software-enhanced transit (~$39B earmarked in the U.S. for digital transit modernization). Platforms operate "like regulated utilities, but with cloud economics."
The pick — Uber, where a noun became a verb
- At ~$170B, Uber "has already won the scale war." Like "to Xerox" and "to Google," "to Uber" entered the lexicon — both prior examples were "massive winners in their heyday." The question is whether the market has caught up to the model after years as "a high-burn Silicon Valley hype-train."
The numbers — operating leverage and a real FCF yield
- Q3-2025: revenue $13.5B (+20%), gross bookings ~$50B (+21%), Adjusted EBITDA +33%. 2025 FCF ~$9.2B (+30%) → ~5.2% FCF yield, "usually associated with mature compounders." Even after stripping sizable stock comp, ~$7B+. Q3 net income $1.6B; FCF went "from zero to $7–9 billion in less than three years" with margins still expanding.
Three engines on one platform — plus a fourth
- Mobility (the profitable, predictable core), Delivery (expanding), Freight (still unprofitable, with spin-out optionality) — unified on one app. The fourth leg, Advertising, surpassed a ~$1.5B annualized run-rate by mid-2025, growing ~60% YoY at higher margins than ride-hailing or delivery.
Valuation stuck in the past
- ~24× 2025E / ~21× 2026E earnings and 3.4× sales vs a "frequently" hit 4.5× sales — returning to which implies ~$135 one year out (on 20% 2026 revenue growth). The market "still prefers top-line explosions over margin expansion," and "investors have short memories" about the 2024 breakout.
The risk — sentiment and AVs
- If the market keeps punishing cash-flow growers, Uber treads water. If Waymo or Tesla "crack AVs wide open," pricing could shift — but Hay sees self-driving as "more a potential growth catalyst than a threat" (Uber may integrate AVs in the U.S. this year), making it the classic "growth at a reasonable price."
3. In plain English
UBER — Uber Technologies Positive
Uber is the ride-hailing-and-delivery app that became so common its name is now a verb ("to Uber"). For most of its life it lost money and asked investors to trust a far-off profit. Hay's argument is that the profit has arrived: in 2025 Uber threw off roughly $9 billion of real spare cash (free cash flow) — about a 5% yield, the kind of number you'd expect from a mature, boring company, not a fast grower — and its profit margins are still climbing. The bigger idea behind the pick is that "mobility" (moving people and packages around cities) is quietly turning into essential infrastructure, like cloud computing or electricity, with AI quietly making the matching, routing, and pricing more profitable. Uber runs four of these businesses — rides, food delivery, freight, and a fast-growing advertising arm — all on one app, which is rare and hard to copy.
Despite all that, the stock trades cheaply for a company like this — about 21 times next year's earnings and 3.4 times sales, versus the 4.5 times sales it has often commanded; getting back there would put it around $135, well above today's price. The main worry is self-driving cars (Waymo, Tesla) eventually undercutting Uber's drivers, but Hay thinks Uber is more likely to benefit from robotaxis than be killed by them, and may start using them itself this year. He frames it as "growth at a reasonable price" — a profitable, dominant platform the market is still pricing as if it were burning cash.
Summary derived from the paid Haymaker newsletter (text in transcript.txt) for personal study. Not investment advice. © Haymaker / David Hay for source material.