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tl;dr: Uber is doomed because (1) it's fighting many class-action lawsuits that argue drivers are employees, not contractors, and if they lose just one they're sunk; and (2) Uber has slashed fairs so much that its revenues only cover 40% of the cost of fairs (the rest is effectively subsidized by investors). It's a long read, but an interesting one...
PS. I'm sharing not necessarily because I agree or disagree, but because I feel like it's an informative article...
If there is one quote that sums up the ethos of Uber, it might be this cut from the company's firebrand CEO Travis Kalanick: "Stand by your principles and be comfortable with confrontation. So few people are, so when the people with the red tape come, it becomes a negotiation." But after a month marked by one disaster after another, it's hard to see how Uber's defiant, confrontational attitude hasn't blown up in its face. And those disasters mask one key, critical issue: Uber is doomed because it can't actually make money.
After a discombobulated 2016, in which Uber burned through more than $2 billion, amid findings that rider fares only cover roughly 40 percent of a ride, with the remainder subsidized by venture capitalists, it's hard to imagine Kalanick could take the company public at its stunning current valuation of nearly $70 billion.
And now, in the past few weeks alone, Uber has been accused of having a workplace that fosters a culture of misogyny, accused of stealing from Google the blueprint of a successful self-driving system, and has lost 200,000 customers over ties to President Donald Trump and how it responded to a taxi driver boycott.
Yet even when those factors are removed, it's becoming more evident that Uber will collapse on its own. Barring a drastic shift in the company's business-an implausible rollout of self-driving car fleets across the U.S., an increase of fares by three-fold, or a complete monopolization of the taxi and ride-hailing markets-Uber's lifeline is shrinking. Its business model could collapse if one court case, and there are many, goes against it. Or perhaps more pressing, if it simply runs out of cash.
Keep reading: http://jalopnik.com/uber-is-doomed-1792634203
PS. I'm sharing not necessarily because I agree or disagree, but because I feel like it's an informative article...
If there is one quote that sums up the ethos of Uber, it might be this cut from the company's firebrand CEO Travis Kalanick: "Stand by your principles and be comfortable with confrontation. So few people are, so when the people with the red tape come, it becomes a negotiation." But after a month marked by one disaster after another, it's hard to see how Uber's defiant, confrontational attitude hasn't blown up in its face. And those disasters mask one key, critical issue: Uber is doomed because it can't actually make money.
After a discombobulated 2016, in which Uber burned through more than $2 billion, amid findings that rider fares only cover roughly 40 percent of a ride, with the remainder subsidized by venture capitalists, it's hard to imagine Kalanick could take the company public at its stunning current valuation of nearly $70 billion.
And now, in the past few weeks alone, Uber has been accused of having a workplace that fosters a culture of misogyny, accused of stealing from Google the blueprint of a successful self-driving system, and has lost 200,000 customers over ties to President Donald Trump and how it responded to a taxi driver boycott.
Yet even when those factors are removed, it's becoming more evident that Uber will collapse on its own. Barring a drastic shift in the company's business-an implausible rollout of self-driving car fleets across the U.S., an increase of fares by three-fold, or a complete monopolization of the taxi and ride-hailing markets-Uber's lifeline is shrinking. Its business model could collapse if one court case, and there are many, goes against it. Or perhaps more pressing, if it simply runs out of cash.
Keep reading: http://jalopnik.com/uber-is-doomed-1792634203
