We know what they are and we have probably used them, but is it that simple? San Francisco based Uber has a market valuation of $62 Bil, based on its Dec 2015 fund raising activity when it pulled in some $2.1 Bil from new investors. We’re not quite sure who the investors are and it seems neither them nor Uber want us to know, which explains why they filed all the paperwork in Delaware (think Panama, BVI, Cayman, Secrecy)
Uber is in its 6th year and its accounts showed in first quarter of 2015 it had revenue of $410 Mil and Losses of $470 Mil! Things have improved, in the last 9 mths it contained its Losses to $750 Mil. This is no real surprise when one reads of instances of fare prices which would not have covered the cost of the fuel. it would appear that Uber is hell-bent on wiping out any competition, that is regular taxis. However the situation in which they are operating is far from a level playing field. Registered taxis have a variety of costs which they must pay to the local council, their vehicle must be checked as roadworthy and the drivers must be vetted and pass an examination on their knowledge of the area in which they operate.
Taxi drivers employed by taxi companies have the benefits of employment legislation and other safeguards which exist in the relationship of employer to employee. Uber drivers are classified as “partners” which avoids the company Uber itself from getting involved in any of the responsibilities relating to employees, sorry partners..
What’s the end game? The company continues to raise more money to expand into more cities around the world and continues to make losses nearing $1 billion per annum. We might just get a clue by taking a look at what has happened with another large US multinational, Amazon. Between 2005 and 2012 the number of high street bookshops in the UK fell by over 50%, similar figures of closures have been observed in other large cities around the world. However, guess what? Now that Amazon has burned off a massive number of its competitors it has announced that it intends in the next 1/2 years to establish 400 ” bricks and mortar” bookshops, the first of which is already opened in Seattle.
Uber cannot continue indefinitely accumulating losses but in the process it is clearly eliminating competition and we can be assured that the founders of Uber and subsequent investors are not on a mission to provide urban dwellers with a cheap taxi service. Things will become clearer I suspect if we just adopt the well tried and tested technique ” Follow the Money”