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Magellan’s Hamish Douglass says Uber is a ‘Ponzi scheme’

“I see Uber as one of the stupidest businesses in history,” Mr Douglass said. “The probability of this business not going bankrupt in a decade is like 1 per cent.”

Pointing to Uber’s high-cost, owner-driver model and what he described as its almost “valueless” user base, Mr Douglass said the San Francisco-based business’ capital-raising style was like a “Ponzi scheme”.

“They’ve got no advantage over anyone else when it comes to autonomous driving technology. They tried to steal it from Google, they’ve ended up in court. That whole side of the business is falling apart. It’s constantly losing money and it’s capital-raising strategy is a Ponzi scheme.

“All they do is keep increasing their private market valuation and someone always says, ‘I’ll put some money up, because next time they raise, it’ll be at a higher price’.”

The court case Mr Douglass refers to involves allegations by Waymo, the self-driving car division spun off by Google’s parent company, that Uber has used stolen trade secrets to develop its own autonomous driving vehicles. The case is being heard in San Francisco.

“Some of the smartest investors in the world like to show off how they got access to Uber, but I think there’s a 99 per cent chance that business will collapse,” said Mr Douglass.

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