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Considering the massive backlash Uber has received around the world, i'm quite impressed how they can keep the show going, and investors keep funding them. Doe

Considering the massive backlash Uber has received around the world, i'm quite impressed how they can keep the show going, and investors keep funding them. Doesn't this seem like a lost cause for VC's? Edit: I get that the service they provide is hugely beneficial to the customers, but if that is only possible from breaking the law, then it's doomed to fail. E.g. If an airline company provided extremely cheap flights, by having people who just received a license to fly be the captain, then you are asking for trouble, legal and illegal. Truth be told, if Uber pivoted to instead of cutting out the taxi companies, instead delivered the app as a service for the taxi companies, then they could probably optimize their respective companies to be able to provide taxi services cheaper and with better service.

Kranar 11y ago
Everywhere I've been people/customers love Uber. I live in Toronto and I think it's safe to say the people much prefer Uber over taxis. The only significant entities who dislike Uber seem to be taxi companies and governments.
- justizin 11y ago
  .. and the victims of accidents who find that the drivers are not properly insured, and the drivers who find that their insurance company drops them and they are liable .. and people who think that you should be able to get a fucking cab in the rain for less than $400. ;)
  - smeyer 11y ago
    I can't speak to the insurance side, but I know that in Boston, the sort of times when a surge goes over 2x are the same sort of times that it's very difficult to hail a cab, let alone expect dispatch to send one if you call. If the weather is bad enough to be at a 2.5x surge, I'd never expect to be able to get a hackney cab here. Other cities may not have this problem.
justizin 11y ago
VC's aren't trying to make public opinion, and uber makes money. Frankly, it probably wouldn't hurt their business as much as their ego to stop operating in CA forever, even, since they launched here years ago and duplicated the model around the world. They would probably move their offices to NYC eventually. Anyway, we'll see if this is anything more than posturing.
- aetherson 11y ago
  Uber doesn't make money.
  - justizin 11y ago
    They sure as hell do, they just aren't giving any back to their investors, yet, because money is pouring into their laps and they're happy to spend it. There's a difference between not being profitable and not making money, and when you're displacing an entire existing industry, you can afford to lose money while you're doing it. That's one of the hidden stories with Uber, of course, that taxi drivers give up their taxis and move to uber and that door kind of closes behind them, and the taxi companies lose share and it'll all shake out in the end is their hope. I think they're insane, but it's silly to pretend that VCs care about anything but the valuation, IMO.
    - aetherson 11y ago
      "Buying $20 bills for $21" does not constitute making money, no matter how many $20 bills you end up with. So, to be clear, I think our disagreement is fairly narrow. You suggest that the VCs care about the valuation. I agree! But: 1. Uber isn't making money. Its investors no doubt hope that it will make money at some point. But investors are not infallible, and it is entirely possible that Uber will never be profitable, or (more likely) will at some point but profitable, but not profitable enough to justify its lofty valuation. 2. That said, investors don't directly care about whether or not Uber makes money -- they care about its valuation. If Uber starts making money hand over fist, certainly that's one way for its valuation to increase, but there are others. Maybe it will go public and its current investors will cash out and then it will be revealed that robo cars kill Uber and it will crash and burn -- but still be a good investment for current investors. I don't think that's the most likely scenario, but it's possible. Anyhow, the point is, it is not now "making money," and whether it will ever "make money" in very large scales is currently unknown.
HappyTypist 11y ago
Uber is not receiving 'massive backlash' from users. It's receiving backlash from authorities and regulators. Personally, the more authorities want to ban uber the more I want to use it.
mattwad 11y ago
Maybe it's not a win or lose situation. I wish Uber would just play by the rules and make their drivers real employees. They have so much money that sure, they won't make as MUCH profit, but it will probably still be a service worth using and will still help break the medallion monopoly. It won't happen until the governments force their hand, but hopefully it's just a matter of time.
onewaystreet 11y ago
Uber loses battles from time to time, but they are winning the war.
- ianstallings 11y ago
  I'd hate to see losing.
  - onewaystreet 11y ago
    Losing would be getting banned and staying banned. Many places have banned Uber in the past (SF, NYC, etc.) but they ended up getting unbanned. Portland is recent example: http://www.bloomberg.com/news/features/2015-06-23/this-is-how-uber-takes-over-a-city http://www.bloomberg.com/news/features/2015-06-23/this-is-ho...
    - toomuchtodo 11y ago
      Wait until the IRS deems Uber has illegally classified workers across the country as independent contractors and requires missed tax payments and penalties to be paid. It should be noted, corporate officers are personally liable for those expenses if the corporation defaults or folds.
      - ianstallings 11y ago
        And notable politicians are talking about squashing the "gig" economy (e.g. Hillary Clinton). If I was an investor I'd be a little worried. The US government has made clear in the past that it frowns on using contractors over full time employees, if past law suits against enterprises that use them are any indication.
msellout 11y ago
No. It's likely that companies like Uber will cause a shift in the legal treatment of employees vs contractors. I hope that the difference will be eliminated. It's such a fine line already, very difficult to know whether someone is a contractor or an employee. Technology and market forces are eliminating the difference, the law needs to catch up. Universal health care and disability insurance would eliminate much of the difference between those labels.
- dikaiosune 11y ago
  Throw in better retirement options than 401k's, and a few other things, and I think that might be possible.
moistgorilla 11y ago
Uber receives massive backlash from taxi drivers, local governments receiving political funds from taxi companies and journalists with agendas. The average consumer loves Uber
Vadoff 11y ago
The law is created by people. If enough people support it, the laws will eventually become overturned.

Kranar 11y ago

Everywhere I've been people/customers love Uber. I live in Toronto and I think it's safe to say the people much prefer Uber over taxis. The only significant entities who dislike Uber seem to be taxi companies and governments.

justizin 11y ago
.. and the victims of accidents who find that the drivers are not properly insured, and the drivers who find that their insurance company drops them and they are liable .. and people who think that you should be able to get a fucking cab in the rain for less than $400. ;)
- smeyer 11y ago
  I can't speak to the insurance side, but I know that in Boston, the sort of times when a surge goes over 2x are the same sort of times that it's very difficult to hail a cab, let alone expect dispatch to send one if you call. If the weather is bad enough to be at a 2.5x surge, I'd never expect to be able to get a hackney cab here. Other cities may not have this problem.

justizin 11y ago

VC's aren't trying to make public opinion, and uber makes money. Frankly, it probably wouldn't hurt their business as much as their ego to stop operating in CA forever, even, since they launched here years ago and duplicated the model around the world. They would probably move their offices to NYC eventually. Anyway, we'll see if this is anything more than posturing.

aetherson 11y ago
Uber doesn't make money.
- justizin 11y ago
  They sure as hell do, they just aren't giving any back to their investors, yet, because money is pouring into their laps and they're happy to spend it. There's a difference between not being profitable and not making money, and when you're displacing an entire existing industry, you can afford to lose money while you're doing it. That's one of the hidden stories with Uber, of course, that taxi drivers give up their taxis and move to uber and that door kind of closes behind them, and the taxi companies lose share and it'll all shake out in the end is their hope. I think they're insane, but it's silly to pretend that VCs care about anything but the valuation, IMO.
  - aetherson 11y ago
    "Buying $20 bills for $21" does not constitute making money, no matter how many $20 bills you end up with. So, to be clear, I think our disagreement is fairly narrow. You suggest that the VCs care about the valuation. I agree! But: 1. Uber isn't making money. Its investors no doubt hope that it will make money at some point. But investors are not infallible, and it is entirely possible that Uber will never be profitable, or (more likely) will at some point but profitable, but not profitable enough to justify its lofty valuation. 2. That said, investors don't directly care about whether or not Uber makes money -- they care about its valuation. If Uber starts making money hand over fist, certainly that's one way for its valuation to increase, but there are others. Maybe it will go public and its current investors will cash out and then it will be revealed that robo cars kill Uber and it will crash and burn -- but still be a good investment for current investors. I don't think that's the most likely scenario, but it's possible. Anyhow, the point is, it is not now "making money," and whether it will ever "make money" in very large scales is currently unknown.

HappyTypist 11y ago

Uber is not receiving 'massive backlash' from users. It's receiving backlash from authorities and regulators. Personally, the more authorities want to ban uber the more I want to use it.

mattwad 11y ago

Maybe it's not a win or lose situation. I wish Uber would just play by the rules and make their drivers real employees. They have so much money that sure, they won't make as MUCH profit, but it will probably still be a service worth using and will still help break the medallion monopoly. It won't happen until the governments force their hand, but hopefully it's just a matter of time.

onewaystreet 11y ago

Uber loses battles from time to time, but they are winning the war.

ianstallings 11y ago
I'd hate to see losing.
- onewaystreet 11y ago
  Losing would be getting banned and staying banned. Many places have banned Uber in the past (SF, NYC, etc.) but they ended up getting unbanned. Portland is recent example: http://www.bloomberg.com/news/features/2015-06-23/this-is-how-uber-takes-over-a-city http://www.bloomberg.com/news/features/2015-06-23/this-is-ho...
  - toomuchtodo 11y ago
    Wait until the IRS deems Uber has illegally classified workers across the country as independent contractors and requires missed tax payments and penalties to be paid. It should be noted, corporate officers are personally liable for those expenses if the corporation defaults or folds.
    - ianstallings 11y ago
      And notable politicians are talking about squashing the "gig" economy (e.g. Hillary Clinton). If I was an investor I'd be a little worried. The US government has made clear in the past that it frowns on using contractors over full time employees, if past law suits against enterprises that use them are any indication.

msellout 11y ago

No. It's likely that companies like Uber will cause a shift in the legal treatment of employees vs contractors. I hope that the difference will be eliminated. It's such a fine line already, very difficult to know whether someone is a contractor or an employee. Technology and market forces are eliminating the difference, the law needs to catch up. Universal health care and disability insurance would eliminate much of the difference between those labels.

dikaiosune 11y ago
Throw in better retirement options than 401k's, and a few other things, and I think that might be possible.

moistgorilla 11y ago

Uber receives massive backlash from taxi drivers, local governments receiving political funds from taxi companies and journalists with agendas. The average consumer loves Uber

Vadoff 11y ago

The law is created by people. If enough people support it, the laws will eventually become overturned.