Analysis

Uber's pile-up of disasters

"Uber was already off to a bad start in 2017, but the year is getting worse by the day."

The smartest insight and analysis, from all perspectives, rounded up from around the web:

"Uber was already off to a bad start in 2017, but the year is getting worse by the day for the $69 billion ride-hailing company," said Biz Carson at Business Insider. After losing more than 200,000 users in January to the #Delete​Uber movement, which formed in response to allegations that the company tried to profit from a travel ban protest, Uber "has been pummeled by a seemingly never-ending barrage of bad news." This week, Uber briefly halted its self-driving car tests after a crash in Arizona, and it had to address a report about its executives going to an escort-karaoke bar in Seoul, even as it struggled to contain the damage from recent allegations of widespread sexual harassment. Then there's the lawsuit from Google accusing Uber of stealing self-driving car technology; revelations that Uber used secret technology to evade local regulators; and a viral video of CEO Travis Kalanick insulting a driver. "If business schools need a new case study for a company in a PR disaster, Uber's last month is as perfect an example as can be found."

Uber's pain is Lyft's gain, said Katy Steinmetz at Time. Uber's ride-hailing rival has grabbed about 5 percent of Uber's market share since the #DeleteUber campaign launched, and has been aggressively positioning itself as a feel-good alternative. Lyft also scored positive attention with a $1 million donation to the American Civil Liberties Union after President Trump issued his first travel ban, and this week it unveiled a new feature that lets users donate part of their fare to charity. But with just 20 percent of the market to Uber's nearly 80 percent, "Lyft is still a pretty distant No. 2." Uber's mess is a big distraction for the company, but overall, "it hasn't bothered riders and it hasn't hurt business," said Erin Griffith at Fortune. Case in point: Uber just reported its best week ever for sales in the U.S. Lyft is currently trying to recruit new investors, but it remains to be seen whether "Check out our competitor's dumpster fire!" is a convincing sales pitch.

Is this is the sound of the tech bubble popping? asked Adrienne LaFrance at The Atlantic. Uber is by far the most valuable of the 187 "unicorn" startups valued at $1 billion or more, despite losing at least $1.2 billion in the first half of 2016. But it's unlikely an Uber collapse "would set off too terrible of a chain reaction in Silicon Valley." The tech industry's funding sources are more diversified than they were in the original dot-com bubble, and the definition of what makes a "technology company" is also much broader. Odds are, investors will see Uber's flaws as an isolated case of bad corporate governance, not evidence that they shouldn't be investing in startups. The era of cheap, investor-subsidized Uber rides may be over, however, said Alison Griswold and Akshat Rathi at Quartz. At its present pace, Uber will "exhaust its current financing in a little more than two years." The company can hardly afford to alienate drivers further by cutting into their take, so it will probably raise fares instead. "If nothing else, don't expect rides to ever get any cheaper."

Recommended

Consumer Reports brutally reviews Tesla's steering 'yoke'
A Tesla.
yoke's up

Consumer Reports brutally reviews Tesla's steering 'yoke'

The daily business briefing: September 16, 2021
The Inspiration4 mission
Business briefing

The daily business briefing: September 16, 2021

The method to McConnell's debt ceiling madness
Mitch McConnell.
Picture of W. James Antle IIIW. James Antle III

The method to McConnell's debt ceiling madness

SpaceX launches 1st all-civilian crew into orbit
The SpaceX Falcon 9 lifts off on Wednesday night.
we have lift off

SpaceX launches 1st all-civilian crew into orbit

Most Popular

Did Theranos Lose Afghanistan?
Elizabeth Holmes and James Mattis.
Samuel Goldman

Did Theranos Lose Afghanistan?

How Newsom ran away with the recall
Gavin Newsom.
Picture of David FarisDavid Faris

How Newsom ran away with the recall

Why Laurence Fishburne isn't in the Matrix trailer
The Matrix Resurrections
rabbit hole

Why Laurence Fishburne isn't in the Matrix trailer