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Story of Uber

Travis Kalanick jumped out of a moving cab in Mexico after arguing about the fare with a local cab driver. He would develop a dislike for traditional cabs as a result of the incident. He founded Uber a few years later. Within seven years, Uber grew from three drivers to 3.9 million drivers, became the world's most valuable private company, and made him a well-known billionaire. He was then fired. The Uber Story inspires, but it also warns about the dangers of pushing the limits too far.<br>The Uber Story formally began in 2008, when Travis Kalanick and Garrett Camp met at LeWeb, a Paris-based technology conference. Both had founded a string of failed start-ups before striking pay dirt with Red Swoosh (acquired for $19 million) and StumbleUpon (acquired for $75 million), respectively. They discussed the possibility of people hailing rides using their phones. Following this brief discussion, they both returned to California.<br>Read more at-: https://insellers.com/blogs/

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Story of Uber

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  1. Story of Uber Travis Kalanick jumped out of a moving cab in Mexico after arguing about the fare with a local cab driver. He would develop a dislike for traditional cabs as a result of the incident. He founded Uber a few years later. Within seven years, Uber grew from three drivers to 3.9 million drivers, became the world's most valuable private company, and made him a well-known billionaire. He was then fired. The Uber Story inspires, but it also warns about the dangers of pushing the limits too far. The Uber Story formally began in 2008, when Travis Kalanick and Garrett Camp met at LeWeb, a Paris-based technology conference. Both had founded a string of failed start-ups before striking pay dirt with Red Swoosh (acquired for $19 million) and StumbleUpon (acquired for $75 million), respectively. They discussed the possibility of people hailing rides using their phones. Following this brief discussion, they both returned to California.

  2. The camp began working on the ride-hailing service as a side project in 2009 and enlisted Kalanick as a partner. They purchased the domain UberCabs. In 2010, UberCabs had a beta launch in San Francisco with three luxury cars after developing a working platform for hailing rides. Platform businesses are subject to a fascinating phenomenon known as Network Effects. As the number of users on a platform grows, sellers flock to that platform to sell their wares and vice versa. Amazon is a prime example of such a phenomenon (no pun intended). These companies manage to capture 70-80 percent of the market without resorting to predatory tactics. In San Francisco, Uber became a “natural monopoly.” The timing for Uber couldn’t have been better, smartphone usage was increasing rapidly. People found Uber to be very convenient. Word-of-mouth helped Uber grow immensely. Drivers and users flicked to Uber. However, it soon received a cease and desist order in San Francisco, for using the word “cab” in its name. The solution was simple; it went from UberCabs to Uber

  3. Uber expanded rapidly under Kalanick's leadership. Uber raised $11 million from Benchmark Capital in 2011 to fund its appetite for expansion. The funds were used to support operations in new cities. The business model of contracting out cars and drivers helped to keep investments and costs low. Unlike traditional taxi companies, it was not required to provide any employee benefits to its drivers. To operate cabs in a city, cab companies must pay hefty licence fees. Uber was free of these constraints because it did not register as a Cab Company. Uber was able to get around these issues thanks to legal loopholes. By 2012, Uber had launched a new product called UberX for low-cost rides. Uber got into the relatively less affluent market segment. In the same year, it expanded to Canada and the UK. By 2013, people could use their personal cars for sharing rides on UberX. It became a great combination of the gig economy and the sharing economy. By the end of 2013, Uber raised $258 million, which valued it at $3.5 billion. This was 22x the original amount it had raised just two years back in its first round of funding.

  4. This explosive growth came at a cost. Journalists wrote articles about Travis Kalanick's extremely aggressive culture. The culture was dubbed "toxic." Despite these rumours, Uber raised $1.2 billion in the same year at a valuation of $40 billion. It also launched UberFRESH, which later morphed into the well-known food delivery service UberEats. Even though Uber was still rapidly expanding in 2015, the tide had begun to turn against Uber and Kalanick. Protests against Uber have become commonplace. Cab unions protested Uber for interfering with their business. Uber drivers are protesting the company for failing to provide employee benefits and a living wage. Uber's competitors, including Lyft, Ola, Didi Chuxing, and Grab Taxi, formed an alliance to compete with Uber. Despite these issues, Uber raised $2.1 billion at a $65 billion valuation. It had risen to become the world's most valuable private company.

  5. Despite the investor optimism, Uber did not have a single profitable year since its inception. The continuous expansion, high rebates for customers and incentives to attract drivers ensured that costs remained high. While some markets matured, other markets continually needed large investments. Investors expected Uber to spend money and capture the market. Once captured, the market could be capitalised on. However, in the real world, with similarly well-funded competitors, this was an incredibly difficult task. All competitors kept taking losses to keep the prices low and the customers happy. Uber finally decided to exit a few businesses. It sold its South East Asia business to Grab. The China business was sold to its rival Didi Chuxing.

  6. Another controversial issue that Uber faced since its beginnings is Surge Pricing. Surge pricing jacks up ride prices during periods of high demand. Prices sometimes move up to 2-3x of the normal price range. In recent years, Uber has capped its surge pricing during blizzards as a means to appease customers. 2017 would turn out to be Uber's worst year yet. It was defending itself against lawsuits filed by cab companies and Uber drivers. Simultaneously, ongoing allegations of a "toxic culture" at Uber prompted a federal investigation. According to the reports, CEO Kalanick fueled the hyper-aggressive culture in order to increase productivity. Kalanick took a sabbatical to research these issues. He resigned as Uber's CEO two weeks later.

  7. Uber is cleaning house under its new CEO, Dara Khosrowshahi. This is required by Uber. It went public in 2019 with an initial public offering (IPO). With 22000 employees and public shareholders, Uber can no longer maintain its upstart image and growth-at-all-costs mentality. Neither Uber nor its competitors are profitable as of 2020. Travis Kalanick has moved on to new endeavours. While he is still reviled by some, Uber would not have reached such heights without someone as driven as him. Uber says it plans to become profitable quite soon and has been cutting losses by selling some of its businesses to competitors. We all hope that this iconic company does well. For more amazing insights and updates follow Installers. With valuable insights backed with solid research, we help you stay ahead of the crowd.

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