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Tag: rideshare

  • Uber Built A Very Anti-Fragile Business, Says Jason Calacanis

    Uber Built A Very Anti-Fragile Business, Says Jason Calacanis

    “Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business,” says early Uber investor Jason Calacanis. “When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. Watching the Uber team take on this challenge of the pandemic year has been really impressive.”

    Early Uber investor Jason Calacanis says that unlike Lyft, Uber built a very anti-fragile business with the combination of Eats and Rides and has become relentlessly focused:

    Uber Built A Very Anti-Fragile Business

    What we’re really going to see here is that Uber built a very anti-fragile business in regards to having the Eats business and having the Rides business. When the Ride’s business went down that kind of indicates people are staying home. When they stay home they use Uber Eats and increasingly Drizly, Cornershop, and Postmates. People are ordering groceries. Watching the Uber team take on this challenge of the pandemic year has been really impressive.

    It reminds me a lot of Disney and how they got focused around Disney+ as the center of the organization. They looked at what was happening in the pandemic and said parks are great, merch is great, movies are great, let’s just put everything into Disney+ and accelerate that. Look what happened to that company. I’ve got to give Dara Khosrowshahi a lot of credit. He got rid of a lot of the noise like self-driving cars which are a multi-decade kind of vision. He sold off the places where they weren’t going to be in first, second, or even third place. He did JVs and sold off those businesses like Russia and China, etc. That’s well documented.

    The Space Can’t Have 50 Players Losing Money

    They found a new really inspiring footing which is if Amazon is two-day delivery going to one-day, Uber’s is one-hour delivery going to 10-minute delivery. That is Travis Kalanick’s original vision for Uber. When I met with him when he was building the company and I was the third or fourth investor his vision was this is a logistic company. We took atoms in the world made them bits on the internet. Now we’re going to take bits on your phone, an app, and we’re going to move atoms in the real world. That was his original pitch. Here we are in decade two where I’m still own the same shares I’ve had since I bought them for a penny or whatever back in 2008 or 2009. I remain super bullish. I have a huge position in Uber and I’m going to hold it for the next decade.

    It’s fairly obvious that there are acquisitions and consolidation that need to happen in the space in order for it to be profitable. The space can’t have 50 players losing money. We’ve watched Lyft, Postmates, Doordash, and everybody, say that we’re going to have to charge what this product is worth. We’re going to have to stop burning money. There’s no free VC money. The public markets are not down with lose money forever and grow. I think we found a happy medium here between what public market investors want, profits, and what private market investors want, growth.

    Uber Has Become Relentlessly Focused

    I think Dara has done an exceptional job. Some things will come from acquisitions but most of it has to be just relentless execution and focus. That is the inspiring part of what happened here. Uber has become relentlessly focused. Things that were coming in 10 or 20 years like self-driving in all likelihood will be a commodity business. In 10 or 20 years there’ll be five companies who have that technology. VTOLs are very fascinating and very interesting, but again that’s probably seven, eight, nine, or ten years off as a very niche product.

    Uber Built A Very Anti-Fragile Business, Says Jason Calacanis
  • There Is No Change Coming To Lyft, Says Co-Founder – Despite Ruling

    There Is No Change Coming To Lyft, Says Co-Founder – Despite Ruling

    Lyft co-founderJohn Zimmer is extremely confident the court ruling that found California Proposition 22 unconstitutional will be overturned on appeal.

    “If you look at California Constitution we feel very confident in the way the ballot initiative was written,” says Lyft co-founder and President, John Zimmer. “The Attorney General in California agrees with us and was on our side in this lawsuit. As this goes through higher courts, the appeals court in California, we are extremely confident that the proposition will be upheld.”

    “There is no change coming (to Lyft) out of that ruling,” adds Zimmer. “It will go on appeal and we’ll continue to work within the system of law and we are confident of the final outcome.”

    “It’s hard to predict the legal process fully but we’re optimistic that within that (6 months) timeframe we’ll get a more final resolution.”

  • Uber Will Treat UK Drivers As ‘Workers’ After Supreme Court Loss

    Uber Will Treat UK Drivers As ‘Workers’ After Supreme Court Loss

    In a world first, Uber will treat its UK drivers as “workers” after losing its case before the UK Supreme Court.

    In February, the UK Supreme Court ruled that Uber drivers were entitled to more protections than they enjoyed as contractors. “Worker” is a classification unique to the UK, providing more protections than a contractor, but not reaching the status of an employee. Uber has been fighting similar battles in multiple jurisdictions, but the UK case was the company’s first major loss.

    As a result, Uber has agreed to pay some 70,000 UK drivers minimum wage, as well as provide vacation pay and access to a pension plan.

    Writing an op-ed piece for The Evening Standard, CEO Dara Khosrowshahi outlined the company’s policy evolution:

    Our thinking on this issue has evolved over time, and I will be the first to admit that we’ve struggled to identify solutions that work for Uber and for those who earn on our platform.

    Following last month’s UK Supreme Court ruling, we could have continued to dispute drivers’ rights to any of these protections in court. Instead, we have decided to turn the page. Beginning today, Uber drivers in the UK will be treated as workers.

    It remains to be seen if the UK case will serve as a template for other countries and jurisdictions, but Uber’s willingness to make changes certainly will undermine its arguments in future cases.

  • Uber and Lyft Prevail In California Proposition 22 Fight

    Uber and Lyft Prevail In California Proposition 22 Fight

    California’s Proposition 22 is poised to pass, securing the current business model for gig economy companies.

    California has tried to reclassify gig economy companies, such as Uber, Lyft and Doordash. The state previously passed legislation requiring the companies to classify their workers as employees, rather than independent contracts. Changing how their employees are classified would have a profound impact on the companies’ and their bottom line, as they would have be required to withhold taxes and provide benefits.

    The companies tried fighting the legislation in court, but were unsuccessful. This left Proposition 22 as their best chance to continue operating in the state under their current business model.

    The ballot, which had the most expensive campaign of any ballot measure in California history, is poised to pass by a comfortable margin. The fight over gig workers has been closely watched across the country, and will likely help set a precedent for how these companies will continue to operate.

  • Lyft Co-Founder Says Rides Are Still Down 50%

    Lyft Co-Founder Says Rides Are Still Down 50%

    “The impact of the pandemic to us in the broader market is rides being down about 50% now,” says Lyft co-founder and President John Zimmer. “They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic.”

    John Zimmer, co-founder and President of Lyft, discusses the impact of the pandemic on Lyft, noting that daily rides are still down by half since March 2020:

    Lyft Rides Still Down 50%

    Drivers 4 to 1 want to remain independent contractors and want to retain flexibility. Depending on the market, 80 to 90% drive less than 20 hours a week. We think there is a much better way forward than saying (in California) that everyone should become employees. That way forward is to say let’s retain the flexibility and let’s add more protections and benefits like we are pushing for in California.

    The impact of the pandemic to us in the broader market is rides being down about 50% now. They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic. There’s equilibrium between demand and supply, between riders and drivers.

    Impact Of Lockdowns And The Virus Is Real

    The impact to the broader economy and the impact with lockdowns and the virus is real for our business. Transportation is directly tied to people’s movement and the broader economy. That said, we’ve continually week over week seen incremental improvements going from negative 75% to now above 50%.

    We see markets like Toronto back to 80% of where we were before. As countries get better and as states get better at living with the conditions we have because of the virus I see continued improvement. Driver earnings per hour are higher today than they were pre-pandemic. We are looking right now for more drivers.

    Regulation Has Been Part Of Our History From Day One

    Regulation has been a part of our history from day one. We are as much in the transportation business as we are in the technology business and transportation historically has been a regulated industry. Within our first year of operation, we worked with California regulators to create a new category for regulation.

    It’s been part of our business and will always be part of our business. It’s part of how we think about the path to profitability but we are just moving forward on that path despite anything that is going to change around us in terms of regulation.

    Largest Bike-Share Program In North America

    We also have a diversified set of transportation that we offer. We have the largest bike-share program in North America with City Bikes in New York City and Bay Wheels in the Bay and Divvy in Chicago. Our bike systems are in many cases above where they were pre-COVID. They are a great way to get around and get some fresh air and not be next to someone else.

    Lyft Co-Founder John Zimmer Says Rides Are Still Down 50%
  • Uber CEO: Will Shut Down In California Until Voters Decide

    Uber CEO: Will Shut Down In California Until Voters Decide

    • We will have to essentially shut down Uber until the voters decide.
    • Reclassifying drivers from contractors to employees is unfortunate.
    • You would just get a much smaller service at much higher prices.
    • The vast majority of our drivers don’t want to be full-time workers.
    • Really unfortunate at a historical time of unemployment in California.
    • It would put vast swaths of our drivers out of work.
    • It would take away transportation from hundreds of thousands of Californians.
    • Our labor laws are hopelessly outdated.
    • It’s essentially how Uber started, kind of a black car service with few cars. 
    • We can’t go out and hire ten of thousands of people directly overnight.
    • We would focus on the center of cities versus smaller cities or suburbs.

    “We think the ruling by a California judge was unfortunate on reclassifying drivers from contractors to employees,” says Uber CEO Dara Khosrowshahi. “We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide.” 

    Dara Khosrowshahi, CEO of Uber, discusses a court ruling requiring Uber to classify Uber drivers as full-time workers. Khosrowshahi says that this will force Uber to become a much small black car service focused on city centers and with much higher prices for rides. Essentially the service would no longer exist in California suburbs and rural areas:

    Vast Majority of Uber Drivers Want To Remain As Contractors

    We think the ruling (in California) was unfortunate (on reclassifying drivers from contractors to employees). We obviously respect the law and the judge. We do have about eight days now where there is a stay. We are going to go back to the court and appeal the ruling and hope that the court reconsiders. If the court doesn’t reconsider then in California, it’s hard to believe we will be able to switch our model to full-time employment quickly, so I think Uber will shut down for a while. Really, the big question is in November with Prop. 22, we have a proposition out there that puts forward what we believe is the best of both worlds. 

    The vast majority of our drivers, a 4-1 ratio, want flexibility, and don’t want to be full-time workers. With Prop. 22 drivers can continue to have the flexibility that they have but they can enjoy the protections, benefit fund, an earning standard so that they have the protections that many people associate with full-time work. We are hoping that in November the California voters can speak. We are confident that this better way which is kind of the best of both worlds will be the way going forward for California.

    We Will Shut Down Until The Voters Decide In November

    In California, we have changed our model substantially. For example, riders in California pay drivers directly. Drivers can set their own price as an independent contractor would. Drivers have all the flexibility to decide whether or not they want to take a ride or not. We think we (already) comply with the laws. But if the judge and a court finds that we are not and they don’t give us a stay to get to November then we will have to essentially shut down Uber until the voters decide. 

    It would be really unfortunate at a historical time of unemployment in California. It would put vast swaths of our drivers out of work without the opportunity to earn. It would take away transportation from hundreds of thousands of Californians. It would be really really unfortunate. Obviously we would look to comply with the law long-term and we’re hoping the law gives us the best of both worlds. Our labor laws are hopelessly outdated. You’ve got the haves and have-nots and you can have actually a better way.

    Smaller Service, Higher Prices, Only Focused On Big City Centers

    Hopefully, the courts will reconsider. By no means do we want this to happen. If they don’t we are going to have to work to move to a full-time model. It’s essentially how Uber started, kind of a black car service with very few cars on the road and much higher prices. So we will look to flip to a full-time model but this is a model that we built over ten years. We can’t go out and hire ten of thousands of people directly overnight. It would take a significant amount of time to switch over. We have teams thinking about it and working on it. We don’t think it’s the likely outcome by the way and we would look to get back on the road as quickly as possible. 

    You would just get a much smaller service, much higher prices, and probably a service that’s focused on the center of cities versus a bunch of the smaller cities or the suburbs that we operate in right now. That’s the reality. It’s not a game of chicken or one way or the other. It’s really up to the courts and we are going to comply with the law. We will look to get going but it will be a very very different service once we get going.

    Uber CEO: Will Shut Down In California Until Voters Decide
  • Uber CEO: We Are Working On Dashcam Technology

    Uber CEO: We Are Working On Dashcam Technology

    “There’s a lot of crazies out here in Arizona,” said Uber driver Randy Clarke in a very interesting online chat with Uber CEO Dara Khosrowshahi. “I just wish you guys had some sort of way for us to put our rules of our vehicle on the app so the passengers know what to expect beforehand.”

    “For example, in January this guy came into my car trying to get into the front seat. I don’t like to allow people in the front seat when I’m driving alone at 11 o’clock at night. He gets mad after I cancel the ride he jumps in the back and argues with me, calls me the N-word, slams the door and leaves. What that guy did was bad and disgusting, definitely not good.” 

    https://youtu.be/kRpbHp8UbaQ

    “But if there was a way for him to know that I don’t allow people in the front seat when I’m driving with them alone I’m sure he would have just canceled there and then.”

    Then Uber driver Randy Clarke gave Uber’s CEO a suggestion.  “I just wish there was a way for us to upload dashcam footage directly to you guys. Sometimes I get to run around and they transfer me to safety and support. There needs to also be some sort of way for Uber to somehow encourage the footage in case something was to happen.” 

    Randy added, “I think a lot of drivers are afraid of the dashcam policy you guys have in where we can’t put the footage out or we get deactivated. In my situation, I was like whatever happens happens. I showed people the footage and lo and behold he was a guy who owned a business in my community and he got a lot of crap for that.” 

    “Dashcams Is Technology That We’re Working On,” Says Uber CEO Dara Khosrowshahi

    “Well he sounds like he deserves a lot of crap for that,” said Uber CEO Dara Khosrowshahi. “Dashcams and in general taping rides, etc.  is actually technology that we’re working on. There’s this fine balance with privacy concerns. You guys know with TikTok and all that stuff, privacy is rightfully a huge thing.” 

    “Most drivers are like you, good people that are totally open to dashcams,” says Khosrowshahi. “Hey take the footage, I have nothing to hide, this is part of my profession, I act well and I treat my riders well so they don’t have a problem. I think a lot of riders when they’re in the car they do expect privacy and they’re nervous about the balance of safety and privacy. Safety’s super important as well. They’re both important. So we’re trying to work on technologies that balance the two.”

    Khosrowshahi added, “Every single state statute, by the way, is different. So you can’t have one solution. You’ve got to have a state-by-state solution that works for everybody. I really would like to get something that bridges that and balances safety and privacy, but it’s a lot of work to do so. The tech teams are totally working on it. So one day Randy we’re gonna get you that magic!”

    “There are solutions you can imagine where we don’t take the dashcam footage but we only take it if you tell us that there’s an issue It’s in the cloud someplace and no one has access to it. We want to do it the right way because we should not be inappropriately watching someone if we don’t have to. It’s only for those exceptional circumstances.”

    “Exactly,” says driver Randy. Some people do it for clout while others just want to do it just to make sure it doesn’t happen again. So I totally understand that.”

  • Uber CEO Reveals Formula To Profitability

    Uber CEO Reveals Formula To Profitability

    “Scale is the primary driver toward profitability,” says Uber CEO Dara Khosrowshahi. “It’s getting big. We’ve got over a billion rides per quarter and we’ve got trips growing at 35 percent on a year on year basis. It’s a combination of growing top-line over 35 percent, technology innovation to delight the customer and take costs down at the same time, and then good old fashioned efficiency, making sure that our corporate costs don’t grow as fast as our revenue. All of those together give you a formula to get to profitability.”

    Dara Khosrowshahi, CEO of Uber Technologies Inc., discusses how Uber can continue to be transformational and ultimately be profitable in an interview on Bloomberg Technology:

    Uber Can Continue To Be Transformational

    We have resolved all of the governance conflicts that the company had. There were many legal issues that the company was involved with. We have SoftBank as a partner and you want SoftBank to be behind you and a big partner and a big investor. We have a great investor base. We’ve taken the company public and company’s revenue, gross bookings, have grown 75 percent since I joined. We now have a path to profitability. So while we’ve had bumps on the road, and every adventure has bumps on the road, I like where we are. I especially like the position we are in now for the next two years.

    I think Uber (can continue to be transformational over the next decade). Really what Uber has done is brought transportation and opportunity at this point to what we believe is just a small segment of the population. We’ve got over four million driver-partners all over the world which is a huge number. It is unparalleled. But we want Uber to be available to everybody. What we are doing now is going into the next step of introducing other transportation choices to Uber. We’ve always gone with pool, but for example, we are testing busses in Cairo now to even bring the price of Uber down to the next level, a dollar or a buck fifty, etc. 

    The Rideshare Business Itself Is Turning Quite Profitable

    We are introducing bikes and scooters for personal electric mobility. Essentially, anyway that you want to get around your city we are going to be there for you. It will be mostly Uber goods but we will also have other third parties such as transit, such as one of our partners Lime as well. Any way that you want to get around we want Uber to be there. And if you want food, if you want even local commerce which I think we will power or even Uber Eats or some of our other services will be there for you as well.

    If you look at our rideshare business, it covered our overhead less than about $100 million. The rideshare business itself is turning quite profitable. We believe that the profits in the rideshare business are not only going to grow top-line but we believe we are going to grow the bottom-line as well. Then there are other businesses, Eats, autonomous, freight, etc. These are extraordinary opportunities that we are funding. I do believe that we are going to prove to our investors that we can take on a serial basis big parts of our business, turn them profitable, and use those parts of our business to fund investments in other areas. 

    Our Formula To Profitability

    I’m very confident that Uber can be profitable. I think the losses that we reported, it was a $5 billion loss from an accounting perspective. If you live in an accounting world that’s a big loss. I live in the real world. Actually, in the real world or EBITDA losses of $656 million were lower than Q1 and were on a good path in terms of our EBITDA losses as well. None of this is going to be easy. All of this is going to take great execution from all of our teams, marketing, technology, etc. We are going to be demanding our employees to be doing even more with less and to execute incredibly effectively in order for us to grow the top-line and the bottom-line as well. 

    Scale (is the primary driver toward profitability). It’s getting big. We’ve got over a billion rides per quarter and we’ve got trips growing at 35 percent on a year on year basis. We think we can use technology to be much more efficient. For example, instead of you now having to email a call center agent or call a call center agent if you have issues, you can just do it in the app. These are technology innovations that allow customers to have a better experience and at the same time they bring down costs. It’s a combination of growing top-line over 35 percent, technology innovation to delight the customer and take costs down at the same time, and then good old fashioned efficiency, making sure that our corporate costs don’t grow as fast as our revenue. All of those together give you a formula to get to profitability.

    Uber CEO Dara Khosrowshahi: Our Formula To Profitability
  • Uber Hits 2 Billion Rides Milestone

    Uber Hits 2 Billion Rides Milestone

    Uber reached the 2 billion ride milestone on June 18, just 6 months after hitting 1 billion according to Uber CEO Travis Kalanick. “It took five years to reach our billionth trip, six months to reach the next billion … and we’ll hopefully reach our third even more quickly,” Kalanick said in a Facebook post. “Thanks to all the drivers out there for making every trip possible.” This equates to a pace of roughly 5.5 million completed trips per day.

    Kalanick said that “in that single second a month ago, 147 Uber rides started—tying for our two billionth trip.” He emphasized the worldwide reach of Uber today. “These trips happened in 16 countries on five continents, from Costa Rica to Russia and from China to Australia. The longest of the bunch lasted more than an hour as the rider and driver worked their way across Jakarta, Indonesia’s capital. The shortest, a POOL trip in Changsha, China, lasted just three minutes.”

    Uber is now in 450 cities around the world. So what’s the reward for the lucky 147 drivers and riders? “We’re giving $450 to each,” said Kalanick.

    With Uber’s continued growth, the company is likely to increase its current pace of 2 billion rides a year. Its emphasis on China should only accelerate growth, where it is in desperate competition with China’s ridesharing leader Didi Chuxing. China is now Uber’s biggest market in the world when measured by number of rides and amazingly accounts for a third of its business worldwide. “We are number two in China, which means that we still have a ways to go,” Kalanick told FT earlier this year. “But we are putting everything on the field.”

    Last year Didi Chuxing arranged 1.4 billion rides in China, more than Uber has done worldwide in its history up until its recent 2 billion ride announcement.