The History of Uber

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Uber Technologies (Uber Technologies, Inc., the company's global rid e-hailing app, which was launched in 2009, destroys the modern transportation we know, and at one time Uber is the most value in the world. I made a new company.

Ten years after its founding, Uber released its shares on May 9, 2019. Although the road was uneven, Uber is still a leading company in the s o-called ride share. In 2023, Uber reported more than 9. 4 billion trips, increasing 26 % from 2022. Sales were more than $ 37 billion, up 17 % yea r-o n-year, and net income was $ 1. 1 billion from net loss in 2022.

Key Takeaways

Today, the Uber Technologies, which boasts an overwhelming share of the Ride Hailing app, was established in 2009 and quickly became the world's most valuable emerging companies.
Uber's destructive business model, explosive growth, and constant controversy have become one of the most attractive companies that appeared in the late 2000s.
Before fulfilling the lon g-awaited IPO in 2019, investors evaluated Uber to $ 120 billion. However, after listing on May 9, 2019, the name was named in history due to the largest firs t-day loss in US history.
Since then, Uber has been working on a profit, including the acquisition of other companies.

An Idea Is Born

As the company says, Uber's story began in Paris in 2008. Two friends, Travis Colanic and Garrett Camp, were attending Leweb, an annual technical meeting in which the "Economist" magazine described as "a place where revolutionists gather to draw the future." In 2007, the two were selling a c o-established emerging company in a huge amount. Colanic sold Red Susse to Akamai Technologies, and the camp sold Stumbl e-up to EBAY.

The concept of Uber was born on a winter night during the meeting when two could not take a taxi. What if you could get a ride request from your mobile phone? " Initially, it was an idea of a tim e-shared limousine service that could be ordered in the app. After the meeting, the two decided to take a separate path. However, when the camp returned to San Francisco, he continued to stick to the idea and purchased a domain name ubercab. com.

The Early Years

In 2009, Camp, still CEO of StumbleUpon, began working on a prototype for UberCab as a side project. By the summer of that year, Camp convinced Kalanick to join as UberCab's "chief incubator." The service was tested in New York with three cars in early 2010, and launched officially in San Francisco in May of that year. The company soon shortened its name to Uber.

Ryan Graves, Uber's general manager and a key figure in the company's early stages, became CEO of Uber in early 2010. In December 2010, Kalanick became CEO, and Graves became general manager and senior vice president of global operations.

The ease and simplicity of the Uber app fueled its growing popularity. With the tap of a button, users could order a ride, GPS would pinpoint their location, and the fare would be automatically charged to a card on file with their account.

In 2010, the company received its first major funding, a $1. 3 million round led by First Round Capital. In early 2011, it raised another $11 million in a Series A round led by Benchmark. Uber has since expanded internationally to New York, Seattle, Boston, Chicago, Washington, D. C., and Paris, where the idea for Uber first took root.

In December 2011, Kalanick announced at the LeWeb conference that Uber had raised $37 million in Series B funding from Menlo Ventures, Jeff Bezos, and Goldman Sachs. In 2012, the company expanded its range of services with the launch of UberX, a cheaper hybrid car alternative to black car services.

From 2015 to Today

In July 2015, Uber became the world's most valuable startup, valued at $51 billion after a round of funding. In June 2016, Uber raised another $3. 5 billion from Saudi Arabia's sovereign wealth fund.

In April 2017, Uber spoke about its finances for the first time to Bloomberg, reporting a global loss of $3. 8 billion in 2016. This included losses from its China business, which it sold in the summer of 2016; excluding those, the adjusted net loss was $2. 8 billion.

The following year, the company's valuation had fallen from a high of $68 billion to $48 billion. In 2018, Japanese conglomerate SoftBank Group, along with a group of investors including Dragoneer Investment Group, successfully bid for 20% of Uber's shares at this lower valuation, a 30% discount from the previous valuation. The acquisition gave SoftBank a 15% stake and gave Uber a powerful ally in Asia. The remaining shares were reportedly transferred to other investors within the group.

This period also saw other challenges, including a fatal accident involving an autonomous vehicle owned by Uber. Furthermore, in August 2018, the New York City Council voted to suspend new licenses issued to ride-hailing services such as Uber and Lyft.

Uber's May 2019 IPO made history as the largest first-day dollar loss in the history of an IPO in the United States. At one time, Uber was valued at $120 billion by Wall Street analysts, making it the largest company ever to debut on the stock market. Its post-IPO valuation was about $69 billion, just over half of the expected IPO amount.

As of August 5, 2024, Uber's market capitalization is over $120 billion.

In Wake of Scandals, Kalanick Out, Khosrowshahi In

2017 was a particularly rough year for Uber. The trouble began in February when a former Uber female engineer exposed the company's sexist corporate culture in a 3, 000-word blog post. She claimed that Uber's corporate culture was extremely hostile, sexist, and offensive to most people.

The post went viral, and in the following months, many senior employees were fired or resigned for reasons related to the allegations. After the blog post, the board of directors requested an internal investigation, which became known as the "Holder Investigation" (led by former U. S. Attorney General Eric Holder). The investigation resulted in 47 recommendations aimed at improving the company's culture and work environment, and Uber said it fired more than 20 staff members.

In the months that followed, scandal dogged both the company and its CEO: letters were published in the press confirming sexist attitudes from the top down, including Kalanick himself, and Kalanick was caught on video arguing with an Uber driver over lower fares, which did nothing to bolster his public image.

On June 21, 2017, Calanic resigned in response to the rebellion of shareholders. After two months, it was announced that Dara Cosloshahi CEO (then) of Expedia (EXPE) will be appointed. Hosloshihi came to New York with his parents in 1978 to escape the Iranian Revolution. He started his financial career at the Investment Bank, eventually became a CFO of IAC/Interactivecorp (IAC), and served as a CEO for Expedia for seven years.

As of August 5, 2024, Hosloshihi has been a Uber CEO.

More Controversies and Calamities

During the expansion of the business, Uber suffered the intense resistance of the taxi industry and government regulations. As part of a strategy to relieve rebound, the company hired David Proof, a famous political and corporate strategy involved in the 2008 presidential election campaign in Barak Obama. These are part of many issues that Uber holds:

The Backlash Against Surge Pricing

Uber uses automated algorithm to raise prices based on market demand and supply. On New Year's Eve in 2011, the price rose 7 times the regular fee, and users rose a fierce negative voice. In December 2013, when a snowstorm occurred in New York, the rising price of the price bought users. Recently, Uber has promised to set up an upper limit on the surge price when a snowstorm occurs several times in New York.

In 2014, a taxi driver in London, Berlin, Paris and Madrid caused a large protest against Uber. Taxi companies argued that Uber has created unfair competition to avoid expensive license fees and bypass local laws. The trial was judged in the Supreme Court in Europe in November 2016. In September 2017, Uber lost business license in London, which has 40, 000 registered drivers. In June 2018, London's judge overturned the ban and effectively allowed Uber's business under a 1 5-month license with certain conditions. In September 2020, Uber had a new 1 8-mont h-old business permit in London. In March 2022, he obtained a more 30 month license.

Unless it is updated, the license will expire at the end of September 2024. Meanwhile, more than 10, 000 Black Cub drivers in London filed a lawsuit against Uber for millions of Uber's past commercial practice and economic damage.

Calls for Fair Pay and Driver Benefits

In New York, it became public that Uber had mistakenly charged drivers a commission based on pre-tax profits instead of after-tax profits, resulting in tens of millions of dollars in losses for New York drivers. The company said it was an accounting error and committed to fully repaying drivers as soon as possible.

The issue also raised questions about the fairness of who pays the tax. Driver advocacy groups have long argued that Uber is avoiding taxes at the expense of its drivers, and The New York Times found evidence to back that up. The paper estimated that Uber's miscalculation could have cost drivers hundreds of millions of dollars.

In 2017, a New York judge ruled that Uber drivers should be considered employees, rather than independent contractors, at least in some cases. The ruling expanded drivers' access to employee benefits and likely had a significant impact on the company's bottom line.

Meanwhile, California voters passed Proposition 22 in November 2020, allowing companies like Uber to classify workers as independent contractors in the gig economy rather than as full-time employees. The Uber-backed ballot measure was the most expensive in California history, with more than $200 million spent on the campaign.

The constitutionality of Proposition 22 was immediately challenged, but a California Court of Appeal ruled in March 2023 that it was largely constitutional and would remain in effect.

In July 2024, the California Supreme Court upheld the ruling.

Claims of Discrimination and Harassment

In 2018, Uber paid nearly $7 million to more than 480 current and former employees to settle a 2017 lawsuit alleging gender discrimination, harassment, and a hostile work environment. The lawsuit alleged that Uber used a discriminatory ranking system that undervalued female employees and employees of color.

Complaints against Uber were not limited to employees. In April 2021, an arbitrator ordered Uber to pay $1. 1 million to Lisa Irving, a blind customer. The arbitrator ruled that Uber drivers discriminated against Irving by refusing to take her on a dozen occasions and by verbally abusing her. Uber had argued that it wasn't liable for its drivers' actions because they were independent contractors.

Uber's Acquisitions and Other Business Units

Uber makes most of its revenue from investments and services outside of its basic ride-hailing app. These include:

Uber Eats, Postmates, and UberX Share

Uber started the food delivery application "Uber Eats" in 2015. In July 2020, he acquired a rival food delivery service, postmates.

In June 2022, Uber started Uberx Share. This is a service that allows multiple customers to share vehicles and save up to 20%of regular rates. This is an alternative to Uberpool, a similar service that had been paused during the large epidemic of COVID-19.

Lime Scooters

In July 2018, Uber announced that it will invest in an electric scooter rental company lime in collaboration with Alphabet's GV (Goog). Limited lightweight scooters can be rented in several major cities, and when the users are finished, they place scooters on the sidewalk for the next user. Uber users can book scooters from the Uber app.

Uber Self-Driving Cars

Like Google, Apple (AAPL) and Tesla (TSLA), Uber also advertised the entry into cars without drivers. However, after a series of issues, Uber sold Uber Advanced Technologies Group in late 2020 to a young autonomous car company, Aurora.

In December 2022, Uber and another autonomous vehicle company, Mocular, announced that it will launch a "public robot taxi service" in Las Vegas. They say they are the first step in providing "Ride Hails and Delivery by Uber's Network in major cities in the United States".

However, in May 2024, Mocular announced that it will suspend commercial activities between Uber and Lift while the company was reorganized.

How Much Do Uber Drivers Make?

Uber says on a website that "the income you drive with the Uber app depends on what, where, when, and how often you drive." The job search site Indeed sets the median hourly wage of a Uber driver to $ 20. 32.

Which Is Bigger, Uber or Lyft?

Uber is much larger than Lyft, both market share and market capitalization. As of August 5, 2024, LYFT market capitalization is $ 4, 275 million, while Ubers is $ 121, 547 million.

Where Did Uber Get Its Name?

The Wall Street Journal reports that "Uber's company name is derived from" über ", which means" über (over) "in German.

The Bottom Line

As a taxi, as a delivery service for all kinds of foods, houseplants, and drugs, Uber has made it easier for consumers around the world to live without cars. However, its convenience is unlikely to end immediately, with controversy and court struggle.

Article information source

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Публикация участника Ryan Goetz, CFA

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