An Australian fund manager who runs $50 billion says Uber is a ponzi scheme and is 99% sure to be broke in a decade

Hamish Douglass, the co-founder of the Magellan Financial Group with $50 billion under management, thinks ride share service Uber has a less than 1% chance of surviving the next decade.

“It’s constantly losing money and its capital-raising strategy is a ponzi scheme,” he said at the annual Stockbrokers and Financial Advisers Conference in Sydney.

Douglass says Uber is under threat from the arrival of autonomous cars where the ride sharing business has no advantage.

"When I look at Uber ... I think of it as one of the most stupid investments in history," the Australian Financial Review reported him saying. "The probability of this business going bankrupt in a decade is 99%."

And the competition is coming because the barriers to entry to ride-sharing are low.

"All they (Uber) 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," says Douglass.

Uber was founded in 2009 in San Francisco and now operates in 58 countries and is valued at more than $60 billion.

Douglass and Chris Mackay founded Magellan a decade ago on the investing principles of Warren Buffet at Berkshire Hathaway.

The 2016 BRW Rich list shows Douglass' wealth at $505 million.

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