After the taxi-app company Uber announced last week that it was valued at $18 billion in its latest funding round, many market commentators were aghast.

They saw the news as proof the technology sector is in a bubble.

But hold on a second, says New York Times columnist Andrew Ross Sorkin. "Here’s another way to think about Uber’s whopping valuation: it is still too low," he writes.

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In the United States, the taxi industry throws off $11 billion of revenue a year, according to IBISWorld.

"If you extrapolate that Uber could one day control a quarter of the current global taxi market, the investment would turn out to be a home run," Ross says. "If Uber were to take just half of the taxi market in the United States, it would generate more than $1 billion in revenue a year."

And it's not as if the company is a start-up. Uber operates in 128 cities in 37 countries and says its revenue is doubling every six months.

Furthermore, the company may expand into a global delivery service, Sorkin says. "Maybe Uber will turn out to be a bust. Or maybe not."

Speaking for the skeptics, "there are so many regulatory issues with Uber that are not being considered by this valuation," Sam Hamadeh, CEO of research firm PrivCo, told the San Jose Mercury News.

"Investors are holding their nose and investing in Uber looking for a big payoff, and not considering the massive risk. Uber is not the clean investment that VCs [venture capitalists] wish they had."

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