6 ms·

Uber strips power from ousted CEO Travis Kalanick

83 points by empressplay 9y ago

swampthinker 9y ago
17 person board. Are there other examples of startups that have been taken over like this with a successful outcome?
- toomuchtodo 9y ago
  Lots of examples of investors succeeding in diluting a founder's power in their own startup. One person's takeover is another person's power restructuring. EDIT: Tesla is a good example (Elon Musk pushing Martin Eberhard out).
  - alexandercrohde 9y ago
    The question was are there any that are successful for the startup [longterm]?
- uiri 9y ago
  Apple is an example that comes to mind although the outcome isn't exactly successful. They nearly went bankrupt before they acquired NeXT to bring back Jobs.
lettergram 9y ago
I think we're heading for a massive bubble, if Uber collapses investors everywhere will be spooked, "too big to fail" comes to mind. Every ride Uber loses money. If they raise prices, then people jump ship, to Lyft, to a local service, to taxis. If self-driving cars don't start being used they can't cut down the cost... Of course, they also have lawsuits hitting them, and the Waymo lawsuit pretty much halted their self-driving car program. Combine all this with the ridiculous number of lawsuits, investigations and criminal proceedings outside of IP that they are facing ("Grey ball" for instance) and I just don't see how they can maintain their status. Even with another $1 Billion or $10 billion. How can they come out of this? Couple that with having a large number of "chefs in the kitchen" so to speak and well... you get the idea.
- FLUX-YOU 9y ago
  >I think we're heading for a massive bubble, if Uber collapses investors everywhere will be spooked, "too big to fail" comes to mind. I don't think a company that's had a ton of controversy around it is going to suddenly spook everyone if it fails. I would expect an Uber failure to already be priced into the market.
  - ellius 9y ago
    I think the bigger spook will be if the entire market for on-demand drivers suffers a big decline in demand. Izabella Kaminska of the Financial Times has written several articles arguing that the Uber / Lyft model is fundamentally uneconomic. Without arguing for or against her, if that turns out to be true you are going to terrify a large number of investors. Nothing else has really looked as much like a sure-thing disruption opportunity as the taxi market. Anecdotally, my most recent Lyft driver recently told me that Lyft has started playing a lot of the same games to shaft drivers that she left Uber to get away from. It does make me start to wonder if the entire thing is largely subsidized by a market flooded with cheap money.
- aetherson 9y ago
  I don't see any real sign that the Waymo lawsuit halted their self-driving car program. It may yet, but so far, what it's forced them to do is "fire Levandowski." I do think it was always ridiculous to imagine that Uber would create a durable advantage in driverless cars. For better or for worse, Uber is the paramount example of the post-social-media dominated tech startup scene. If it turns out to be massively overvalued, I think you're right that it will absolutely spook investment in tech. Everyone's going to be asking, "If these investors were so massively wrong on Uber, after dumping billions and billions into it, how much insight could they possibly have?" I don't know that that will mean a tech "bubble" or collapse, but I think it'll be way harder to raise money in tech for a while if Uber's ultimate valuation is, say, south of $10B.
- overcast 9y ago
  I don't see how Uber is considered "too big to fail". They aren't the banking system, they are a ride hailing app. If they go away, people go back to using cabs.
keithwhor 9y ago
I don't know whether it's real or imagined, but there has been a drop in my subjective experience with Uber in the last few months since Travis's removal. - While in a rush, I've had back-to-back mid-day waits of 15+ minutes for any and every Uber I called (hailed a cab instead). - A day where I experienced $50+ non-surged fare estimate from downtown SF to the Sunset, something I've never seen before (usually $22-ish... I took MUNI.) - Increased rate of bad driver behavior: I've had drivers straight up cancel calls if I'm not outside immediately, drivers start a fare before I get in the car (and then lose the ability to find my true pickup point), and worse. - Inability to pinpoint my location when there's a conference or venue nearby - I had to call a Lyft yesterday because Uber insisted I was at an Oracle conference (I wasn't even that close) And more. Pretty much every reason I've had for not taking cabs over the past few years is now becoming a problem with Uber. If they can't regulate the quality of their service, there's no benefit to Uber in a major urban center (hailing a cab is far, far faster). I hadn't used Lyft in three years until about two weeks ago. I've started using it more frequently and have had a fantastic experience. I'm unbelievably disappointed - internal company politics aside, I had been a huge fan of Uber. I haven't fully converted to Lyft yet, but every experience I have continues to push me in that direction.
- CoolGuySteve 9y ago
  When talking to lyft drivers here in New York, they all drive for Uber exactly as long as it takes to pay off their car loan for that day and then switch to Lyft because it pays more. So I wouldn't be surprised if Uber is a lemon market when it comes to drivers.
  - SerLava 9y ago
    I'm confused by that. Why do they drive for Uber for part of the day if Lyft pays more?
    - duggan 9y ago
      Some sort of lease arrangement stipulation on the vehicle with Uber for people who didn’t own / couldn’t afford a car?
deleted 9y ago
[deleted]
moomin 9y ago
I think the most remarkable thing here is that Benchmark voluntarily gave up their own weighted voting rights. It tells you just how bad they think Kalanick's influence is that they think they're better off this way.

83 points by empressplay 9y ago

swampthinker 9y ago

17 person board. Are there other examples of startups that have been taken over like this with a successful outcome?

toomuchtodo 9y ago
Lots of examples of investors succeeding in diluting a founder's power in their own startup. One person's takeover is another person's power restructuring. EDIT: Tesla is a good example (Elon Musk pushing Martin Eberhard out).
- alexandercrohde 9y ago
  The question was are there any that are successful for the startup [longterm]?
uiri 9y ago
Apple is an example that comes to mind although the outcome isn't exactly successful. They nearly went bankrupt before they acquired NeXT to bring back Jobs.

lettergram 9y ago

I think we're heading for a massive bubble, if Uber collapses investors everywhere will be spooked, "too big to fail" comes to mind. Every ride Uber loses money. If they raise prices, then people jump ship, to Lyft, to a local service, to taxis. If self-driving cars don't start being used they can't cut down the cost... Of course, they also have lawsuits hitting them, and the Waymo lawsuit pretty much halted their self-driving car program. Combine all this with the ridiculous number of lawsuits, investigations and criminal proceedings outside of IP that they are facing ("Grey ball" for instance) and I just don't see how they can maintain their status. Even with another $1 Billion or $10 billion. How can they come out of this? Couple that with having a large number of "chefs in the kitchen" so to speak and well... you get the idea.

FLUX-YOU 9y ago
>I think we're heading for a massive bubble, if Uber collapses investors everywhere will be spooked, "too big to fail" comes to mind. I don't think a company that's had a ton of controversy around it is going to suddenly spook everyone if it fails. I would expect an Uber failure to already be priced into the market.
- ellius 9y ago
  I think the bigger spook will be if the entire market for on-demand drivers suffers a big decline in demand. Izabella Kaminska of the Financial Times has written several articles arguing that the Uber / Lyft model is fundamentally uneconomic. Without arguing for or against her, if that turns out to be true you are going to terrify a large number of investors. Nothing else has really looked as much like a sure-thing disruption opportunity as the taxi market. Anecdotally, my most recent Lyft driver recently told me that Lyft has started playing a lot of the same games to shaft drivers that she left Uber to get away from. It does make me start to wonder if the entire thing is largely subsidized by a market flooded with cheap money.
aetherson 9y ago
I don't see any real sign that the Waymo lawsuit halted their self-driving car program. It may yet, but so far, what it's forced them to do is "fire Levandowski." I do think it was always ridiculous to imagine that Uber would create a durable advantage in driverless cars. For better or for worse, Uber is the paramount example of the post-social-media dominated tech startup scene. If it turns out to be massively overvalued, I think you're right that it will absolutely spook investment in tech. Everyone's going to be asking, "If these investors were so massively wrong on Uber, after dumping billions and billions into it, how much insight could they possibly have?" I don't know that that will mean a tech "bubble" or collapse, but I think it'll be way harder to raise money in tech for a while if Uber's ultimate valuation is, say, south of $10B.
overcast 9y ago
I don't see how Uber is considered "too big to fail". They aren't the banking system, they are a ride hailing app. If they go away, people go back to using cabs.

keithwhor 9y ago

I don't know whether it's real or imagined, but there has been a drop in my subjective experience with Uber in the last few months since Travis's removal. - While in a rush, I've had back-to-back mid-day waits of 15+ minutes for any and every Uber I called (hailed a cab instead). - A day where I experienced $50+ non-surged fare estimate from downtown SF to the Sunset, something I've never seen before (usually $22-ish... I took MUNI.) - Increased rate of bad driver behavior: I've had drivers straight up cancel calls if I'm not outside immediately, drivers start a fare before I get in the car (and then lose the ability to find my true pickup point), and worse. - Inability to pinpoint my location when there's a conference or venue nearby - I had to call a Lyft yesterday because Uber insisted I was at an Oracle conference (I wasn't even that close) And more. Pretty much every reason I've had for not taking cabs over the past few years is now becoming a problem with Uber. If they can't regulate the quality of their service, there's no benefit to Uber in a major urban center (hailing a cab is far, far faster). I hadn't used Lyft in three years until about two weeks ago. I've started using it more frequently and have had a fantastic experience. I'm unbelievably disappointed - internal company politics aside, I had been a huge fan of Uber. I haven't fully converted to Lyft yet, but every experience I have continues to push me in that direction.

CoolGuySteve 9y ago
When talking to lyft drivers here in New York, they all drive for Uber exactly as long as it takes to pay off their car loan for that day and then switch to Lyft because it pays more. So I wouldn't be surprised if Uber is a lemon market when it comes to drivers.
- SerLava 9y ago
  I'm confused by that. Why do they drive for Uber for part of the day if Lyft pays more?
  - duggan 9y ago
    Some sort of lease arrangement stipulation on the vehicle with Uber for people who didn’t own / couldn’t afford a car?

deleted 9y ago

[deleted]

moomin 9y ago

I think the most remarkable thing here is that Benchmark voluntarily gave up their own weighted voting rights. It tells you just how bad they think Kalanick's influence is that they think they're better off this way.