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One Energy is on a trajectory to become a unicorn company and part of our responsibility for being a company on that track is to study what makes unicorn companies so successful. We get a double bonus this week with an extra review.

The next study is on Uber.  See below for the text as well as link for pdf of the review by John Everett.

Uber’s Company Snapshot
Company Background
Uber is one of Silicon Valley’s biggest success stories with a valuation of ~$70 billion.  Uber Technologies is an on-line transportation network company based in San Francisco.  Uber now operates in 633 cities in 70 countries worldwide.  Uber was started as UberCab in 2009 by Garrett Camp and Travis Kalanick as a way to decrease the cost of black car (limo) services by sharing with other people. 
 
Uber’s services officially launched in 2011 with an app that allowed users to hail a limo at 1.5 times the price of a taxi.  In 2012, UberX was launched, allowing anyone to drive for Uber using their own car (after background check and car requirements).  UberPOOL, launched in 2014, matches the driver with independent riders going in the same general direction at a lower fare for each rider.
 
By using the Uber app on their smartphone, anyone can enter their destination and see the fare in advance, how long it will take a driver to pick them up, and estimated time of arrival.  In most cities, Uber’s fares are based on a somewhat controversial dynamic pricing model that increases fares in times and locations of high demand which tends to attract more drivers to the area and reduce demand.  In most cases the Uber fare is dramatically lower than a taxi fare.  In cities where Uber operates, many taxis are struggling.
 
Outside of its primary shared ride business, Uber has also been involved in self-driving car research, helicopter service, and mapping technology.  Recently, Uber announced plans to start a trucking sharing service.
 
The success of Uber in creating the “ridesharing” or “ridesourcing” industry has spawned imitators such as Lyft and other TNCs (Transportation Network Company).  Uber’s PR crises (see below) have boosted competitors.
 
Lessons to Learn
Uber has had its share of problems.  As might be expected, local taxi companies have fought against Uber, claiming that lower standards for drivers, safety, and vehicles give Uber a competitive advantage. 
 
Regulations or outright banning of its services vary from location to location, and Uber has a history of ignoring or flouting those regulations and deceiving local authorities.  Uber has had legal issues with classification of drivers as contractors, not employees.  Uber has a history of deceiving partners (notably including Apple), stealing technology, and sabotaging competitors.   Co-founder Mr. Kalanick’s behavior as an aggressive risk-taker with a mission to grow at any cost has helped create these problems, and led to boycotts.
 
Perhaps the most public recent (June 2017) crisis has been the forced resignation of co-founder Travis Kalanick as CEO amidst repeated claims that Uber’s workplace culture promotes sexual harassment, discrimination, and retaliation.  Mr. Kalanick remains on the Uber board of directors with voting control.  He is now being sued by a major investor for fraud and other transgressions.
 
Following the release of a scathing report of its culture, Uber has developed, “The Road Ahead”, its plan to respond to all 47 recommendations.  The report recommends “reformulate Uber’s 14 Cultural Values” with “significant input from employees”, and “encourage senior leaders to exhibit those values on a daily basis”.  In the meantime, Uber has lost most of its senior management team, and is having a challenging time filling the open positions.  The management team has often been described as “dysfunctional”.
 
Late breaking news: as of 8/28/17, after a contentious search, Dara Khosrowshahi, former leader of Expedia, has been named CEO.
 
Facts and Figures
Privately held company
Industry: Transportation, Delivery (Commerce)
Founded: March 2009 by Travis Kalanick and Garrett Camp
 
Gross bookings (2016) $20 billion
Net Revenue (2016) $6.5B
Net Income (2016) -$2.8B
 
Travis Kalanick, CEO 2011-2017
As of 8/27/17 Dara Khosrowshahi, former leader of Expedia
 
Number of employees: >12,000
 
The two founders invested $200,000 in 2009.  Since then, Uber has raised $11.5 billion in 14 rounds of venture capital and private equity investment.
 
Sources: www.uber.com, various NY Times online articles, usatoday.com, Wikipedia
 
Respectfully submitted,
John Everett

The transformers for the new office arrived today; 225 kVa and a 1000 kVA.