WebProNews

Tag: uber

  • Ultimate Solution For Uber and Lyft Is Autonomy

    Ultimate Solution For Uber and Lyft Is Autonomy

    “The ultimate solution for Uber and Lyft is autonomy,” says Loup Ventures Managing Partner Gene Munster. “If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. However, this will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.”

    Gene Munster, Managing Partner at Loup Ventures, discusses how California in forcing drivers to be employees may ultimately speed up the efforts of Uber and Lyft to go fully self-driving and thereby simply eliminate all human drivers:

    What Would The Drivers Want?

    Both Uber and Lyft are in a tight spot. There was reprieve today. But this topic is not over with this vote coming November 3rd and California’s influence that they can have with other states. If you put all of this together and think about if these changes to employees across the country, it could be a 15 percent increase (in costs). This is effectively their profit margins.

    I do want to caution the voters of California and also some of the lawmakers on one aspect. What would the drivers want? Most of these drivers use both apps, both Lyft and Uber. If they are employees they likely will be restricted from jumping from app to app. That would cut down some of their rides and cut down what they will be paid on an hourly basis. I don’t think that the right path here is as clear for the drivers in simply becoming an employee.

    Ultimate Solution For Uber and Lyft Is Autonomy

    The ultimate solution for Uber and Lyft is autonomy. If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. One of the unique things about Lyft and Uber is it is a two-sided marketplace. They have drivers and riders. In an autonomous world you don’t need drivers. Essentially, that would leave Lyft and Uber with their key asset, their brands around movement. I think that is an asset but I don’t know if it is worth $55 billion.

    What I really take away from this is that over the next few years there are going to be ups and downs related to this regulation. Longer term, we know where this is going. Cars should be autonomous for safety reasons and productivity reasons. Ultimately, ridesharing with Uber and Lyft is going to be fully self-driving. This topic we are discussing today is going to be largely irrelevant.

    Lyft is already testing self-driving rides in Las Vegas

    Google and Tesla Will Compete With Uber and Lyft

    There are some key nuances to an autonomous ridesharing business model. As I mentioned, there is a two-sided marketplace. That’s really what makes Lyft and Uber special today. One of the sides of the marketplace, the drivers side of this, is under some pressure right now. But if we eliminate the drivers side then you don’t even have a marketplace. You are just trying to get consumers to ride. That opens up new competitors. There are about six of them that are trying to get there.

    The autonomy option is a better option for Lyft and Uber than what they currently have with humans driving. For an investor it’s a more profitable option. However, ultimately it will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.

    I Would Put My Money On Lyft

    Assuming their ballot initiative wins in November, I’m in the Lyft camp. This is partly because I like their focus just on the US and on ridesharing. I think that the Uber Eats business, while its had a tremendous tailwind, it will get progressively more competitive and it’s tougher to make money in that business.

    Ultimately, if I had my choice I would put my money on Lyft. There is another X factor here. There is something subtle about Lyft’s culture. It is a more investor friendly culture and that influences my view.

    Ultimate Solution For Uber and Lyft Is Autonomy, Says Loup Ventures Managing Partner Gene Munster
  • What Not to Do: Former Uber CSO Charged For Covering Up Data Breach

    What Not to Do: Former Uber CSO Charged For Covering Up Data Breach

    The Department of Justice has announced it is charing Uber’s former Chief Security Officer (CSO) Joseph Sullivan for obstruction of justice.

    The charges stem from a data breach Uber suffered in 2016, just days after Sullivan testified before the FTC about a 2014 data breach. In the 2016 data breach, hackers “accessed and downloaded an Uber database containing personally identifying information, or PII, associated with approximately 57 million Uber users and drivers. The database included the drivers’ license numbers for approximately 600,000 people who drove for Uber.”

    Rather than report the new breach, Sullivan orchestrated an attempt to pay off the hackers to prevent the FTC from finding out. To cover his tracks, Sullivan funneled the money through a bug bounty program and tried to get the hackers to sign NDAs. To matters worse, the NDAs includes statements falsely indicating that no data had been taken, statements Sullivan insisted remain in the agreements.

    “Uber’s new management ultimately discovered the truth and disclosed the breach publicly, and to the FTC, in November 2017,” writes the DOJ. “Since that time, Uber has responded to additional government inquiries.

    “The criminal complaint also alleges Sullivan deceived Uber’s new management team about the 2016 breach. Specifically, Sullivan failed to provide the new management team with critical details about the breach. In August of 2017, Uber named a new Chief Executive Officer. In September 2017, Sullivan briefed Uber’s new CEO about the 2016 incident by email. Sullivan asked his team to prepare a summary of the incident, but after he received their draft summary, he edited it. His edits removed details about the data that the hackers had taken and falsely stated that payment had been made only after the hackers had been identified.”

    The entire incident is a case study in how not to handle a data breach. At the same time, Uber’s new CEO and management team are to be commended for doing the right thing as soon as they discovered the truth.

  • California Law Kills Uber and Lyft And The Entire Gig Economy

    California Law Kills Uber and Lyft And The Entire Gig Economy

    California Assembly Bill 5, which has been upheld in a recent court ruling, literally bans the right of an individual to work for themself according to California Assemblyman Kevin Kiley (R). The law will ban hundreds of different professions and especially the hundreds of thousands of jobs created by the gig economy over the last decade.

    Here is how California Assemblyman Kevin Kiley describes the laws impact:

    This law, California Assembly Bill 5, has made it impractical for Uber and Lyft to operate here. Everyone saw this coming. We’ve known this whole year that this law has been devastating for people. It’s actually devastating not just for Uber and Lyft but for hundreds of professions in California.

    This law, AB-5, has basically banned being an independent contractor or an independent worker. It says you have to be in the employ of someone else. They are shutting down Uber and Lyft and that will leave 100,000 of their drivers out of work. We have millions of Californians who also rely on their services. It’s going to be yet another blow to our economy which is already doing about as bad as any state in the country.

    California Law Kills Uber and Lyft And The Entire Gig Economy
  • Lyft May Shutdown In California

    Lyft May Shutdown In California

    Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees.

    Uber, Lyft and the state of California have been locked in a battle over how to classify the two companies’ drivers. Under the Assembly Bill 5, gig workers are considered employees if they are critical to a company’s business. The law has profound implications for companies like Uber and Lyft, whose entire model is geared around independent contractors.

    In his ruling, the judge granted a preliminary injunction preventing Uber and Lyft from classifying their drivers as independent contractors, effectively making them employees. While both companies plan to appeal the ruling, according to The Verge, Lyft President John Zimmer made it clear that losing the appeal would result in Lyft leaving the state. In a call with investors, he said: “If our efforts here are not successful it would force us to suspend operations in California.”

    Uber and Lyft’s case will have far-reaching consequences for the gig economy in California and beyond.

  • 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.”

  • Coronavirus: Uber Business Taking Hit, Has Enough Funds

    Coronavirus: Uber Business Taking Hit, Has Enough Funds

    In a call to investors, Uber CEO Dara Khosrowshahi has said the company is losing significant business because of the coronavirus, but has enough funds on hand.

    According to Business Insider, Khosrowshahi told investors the hardest hit areas have seen a 60-70% decline in rides, and that could go as high as 80% for the year. In spite of that, the CEO said the company has $10 billion in unrestricted cash.

    “We have plenty of liquidity on the books which positions us to come out of this crisis strong and capable,” Khosrowshahi said.

    Another bright spot is Uber Eats, the company’s food delivery service. As people forgo restaurants, Uber Eats is seeing growth in even the worst hit areas. Between the news that Uber has enough cash to survive the crisis, and news its food delivery service is growing, the company’s stock was up as much as 43% Thursday.

    Uber should serve as an example for other companies. Between having enough cash to weather a storm, and diversifying into a disruptive business, the company seems well-positioned to survive any temporary hit to its core business.

  • Uber Taking LADOT to Federal Court

    Uber Taking LADOT to Federal Court

    Uber is taking its battle against the Los Angeles Department of Transportation (LADOT) over customer data to federal court.

    While Uber already shares location data for its electric bike and scooter ride-sharing services with many cities it operates in, the LADOT has required that Uber share real-time, or near real-time, data with the agency. The data would include start and end points, as well as the route taken. Uber has fought the ruling and ultimately had its license for its scooter business pulled.

    The company appealed the ruling, which was heard by David B. Shapiro, a lawyer who has handled multiple city departments appeals. Shapiro sided with LADOT, but noted that neither side had made very compelling arguments. Uber had not given evidence that real-time data was being abused, or that customers’ privacy was negatively impacted. At the same time, LADOT did not adequately show why it was so important to receive real-time data.

    Now Uber is taking the next step, suing the LADOT in federal court. According to CNET, the company is continuing to claim that customer privacy will be negatively impacted.

    “Real-time in-trip geolocation data is not good for planning bike lanes, or figuring out deployment patterns in different neighborhoods, or dealing with complaints about devices that are parked in the wrong place, or monitoring compliance with permit requirements,” states the lawsuit. “What it is good for is surveillance.”

    The outcome of this lawsuit will likely have far-reaching repercussions for a variety of industries, and determine the degree to which local governments do or don’t have the right to require real-time location data.

  • SiriusXM and Uber Deploy Slack To Their Employees

    SiriusXM and Uber Deploy Slack To Their Employees

    In its ongoing battle with Microsoft Teams, Slack has scored two major wins as SiriusXM and Uber have both deployed the messaging app to their employees.

    Microsoft Teams recently doubled Slack’s user base, helped by the app’s deep integration with the rest of Office. Slack has maintained, however, that its users are more engaged and shot down concerns that it couldn’t effectively compete with Microsoft. Underscoring Slack’s claims, it has been scoring a number of significant wins, including IBM and now SiriusXM and Uber.

    “Collaboration is key to our success, which is why we decided to use Slack as part of our efforts to bring our employees together,” said Bill Pratt, SVP and CIO at SiriusXM. “We see Slack as an important day-to-day productivity tool for our organization.”

    Similarly, according to tweets by Uber employees, it seems the ride-hailing company made the switch to Slack yesterday.

    Given the size of the messaging market, there’s no reason Teams and Slack can’t both exist with a healthy user base. With Slack’s recent gains, the company obviously is doing well convincing users it is not only viable, but competitive.

  • Bad News For Uber: L.A. Wins Data-Sharing Appeal

    Bad News For Uber: L.A. Wins Data-Sharing Appeal

    Uber and Los Angeles have been fighting over a rule ordering scooter rental companies to share ride data with the city—a rule that was just upheld on appeal, according to the Los Angeles Times.

    The Los Angeles Department of Transportation (LADOT) passed a rule requiring scooter and electric bike sharing services to provide real-time data on riders’ trips, including start and end points, as well as the full route traveled.

    Uber has argued that providing that degree of data would unnecessarily risk riders’ privacy and make it all too easy to personally identify individual riders, and “reveal personal information about riders, including where they live, work, socialize or worship,” according the LA Times. After six months of arguing, the city suspended Uber’s operating license.

    Uber filed an appealed, which was heard “by David B. Shapiro, a lawyer who has handled appeals for multiple city departments, including the Los Angeles Fire Department and the Department of Cannabis Regulation.”

    Although Shapiro sided with the city in saying it was within its rights to terminate Uber’s operating permit, he said both sides had made weak arguments. Uber failed to provide examples of data being used improperly, while Shapiro did acknowledge Uber’s concerns. At the same time, LADOT failed to make a compelling case as to how it could use real-time data to solve the problems it says are the reason for the rule. Uber has already said it is willing to provide near-real-time, aggregated data that would protect privacy.

    Shapiro’s decision is a loss for privacy advocates and concerned citizens, but Uber has already promised to appeal.

  • California DMV Grants Uber Permit to Test Self-Driving Cars

    California DMV Grants Uber Permit to Test Self-Driving Cars

    The California DMV has granted Uber a permit to test its vehicles on California roads, according to The Mercury News.

    Self-driving cars are increasingly seen as a way for Uber to deal with regulation that threatens how it does business. In Germany, the company was recently banned from transporting customers using rental vehicles after previously being blocked from matching riders with drivers using their own vehicles. In California, Uber is facing additional challenges as a result of Assembly Bill 5 (AB5) that changes the status of contractors to that of employees, requiring companies like Uber to offer additional benefits and thereby driving up costs.

    Self-driving cars would solve these and other problems and potentially streamline long-term costs for Uber. The company has previously tested self-driving vehicles, with a car the company was testing notoriously striking and killing a pedestrian in Arizona.

    The Mercury News is reporting that “the DMV said that it granted the permit to Uber’s Advanced Technologies Group after the company ‘fulfilled all the requirements to receive a permit to test autonomous vehicles in California with a safety driver behind the wheel.’ The DMV also said that Uber presented documentation that showed changes it made to its autonomous vehicle testing program and testing guidelines.”

    There is no timetable for the cars to see widespread use, with Uber indicating it is in no hurry to deploy the vehicles.

  • Uber Letting Drivers Change Rates For Some California Fares

    Uber Letting Drivers Change Rates For Some California Fares

    In an effort to comply with a new California law that would make “gig-economy” workers employees, Uber is experimenting with letting drivers raise prices, according to The Wall Street Journal.

    California’s gig-economy law, Assembly Bill 5 (AB5), went into effect on January 1 and has had profound impacts on Uber, Postmates, Lyft and others. Workers who were previously classified as contractors are now considered employees, requiring companies to provide them with benefits.

    The pricing change is just the latest Uber is making in an effort to comply with AB5 and keeps its workers classified as employees. For a worker to be an independent contractor, they need a measure of independence, including the freedom to set their own prices rather than have them dictated by the company they work for.

    According to the WSJ, “starting Tuesday morning, drivers who ferry passengers from airports in Santa Barbara, Palm Springs and Sacramento can charge up to five times the fare Uber sets on a ride.”

    The move is not without challenges, however, as it could lead to price extremes. On the one hand, drivers may raise prices too high and hurt business. On the other hand, with freedom to change prices, drivers may engage in price wars with each other, driving the price down to the point that no one profits.

    Whatever the outcome, Uber will no doubt do whatever is necessary to keep its drivers as contractors. Otherwise, especially if other states follow suit with similar laws, it could forever change the ride-sharing business.

  • CES 2020: Hyundai And Uber Partner To Provide Aerial Ridesharing

    CES 2020: Hyundai And Uber Partner To Provide Aerial Ridesharing

    Hyundai and Uber made a splash at CES 2020 with a partnership to develop and deploy Uber Air Taxies, according to a press release.

    Hyundai made news in late 2019 when it created its Urban Air Mobility (UAM) division. UAM is focused on creating flying cars and other aerial vehicles, and landed NASA aeronautics director Dr. Jaiwon Shin as the division head. Unlike the many startups that have tried to tackle this field, Hyundai brings vast experience mass-manufacturing complex vehicles.

    Image Source: Uber
    Image Source: Uber

    Under the partnership, “Hyundai will produce and deploy the air vehicles, and Uber will provide airspace support services, connections to ground transportation, and customer interfaces through an aerial ride share network. Both parties are collaborating on infrastructure concepts to support take-off and landing for this new class of vehicles.”

    As part of their announcement, the two companies unveiled concepts for their first jointly developed personal air vehicle (PAV), the SA-1. The PAV is a 100 percent electric vehicle, with vertical takeoff and landing, cruising altitude of 1,000 to 2,000 feet and a cruising speed of up to 180 miles per hour.

    “Our vision of Urban Air Mobility will transform the concept of urban transportation,” said Jaiwon Shin, Executive Vice President and Head of Hyundai’s Urban Air Mobility (UAM) Division. “We expect UAM to vitalize urban communities and provide more quality time to people. We are confident that Uber Elevate is the right partner to make this innovative product readily available to as many customers as possible.”

    “Hyundai is our first vehicle partner with experience of manufacturing passenger cars on a global scale. We believe Hyundai has the potential to build Uber Air vehicles at rates unseen in the current aerospace industry, producing high quality, reliable aircraft at high volumes to drive down passenger costs per trip. Combining Hyundai’s manufacturing muscle with Uber’s technology platform represents a giant leap forward for launching a vibrant air taxi network in the coming years,” said Eric Allison, head of Uber Elevate.

  • Uber and Postmates Sue to Block California’s Gig Economy Law

    Uber and Postmates Sue to Block California’s Gig Economy Law

    Reuters is reporting that Uber and Postmates have filed a lawsuit in an attempt to block a California law that would have severe ramifications for both companies.

    California’s Governor Gavin Newsom signed a law that makes it more difficult for companies to classify gig workers as independent contractors. Keeping workers classified as contractors saves companies money in both taxes and benefits. Labor groups, however, have argued the law was necessary to properly protect workers’ rights.

    Uber and Postmates’ lawsuit alleges that the law “compromises the flexibility prized by their workforce, and that fewer workers would be hired were they considered employees.” They also argue that the law violates the equal protection guaranteed by the U.S. and California constitutions, by singling out app-based workers.

    “It irreparably harms network companies and app-based independent service providers by denying their constitutional rights to be treated the same as others to whom they are similarly situated,” the lawsuit alleges.

    Given the size of California’s economy, other states with similar concerns will be closely watching to see if the law holds up or is ultimately overturned.

  • Uber Buys 596 Acres Near Pittsburg For Self-Driving Test Track

    Uber Buys 596 Acres Near Pittsburg For Self-Driving Test Track

    Business Insider is reporting Uber has purchased 596 acres near Pittsburg to establish a test track for self-driving cars.

    Uber has been in the news a lot lately, and not all of it good. The company recently released a safety report detailing nine murders and thousands of sexual assaults that have occurred in Uber rides. In addition, the company was banned in Germany last week due to it not having the necessary license to transport customers in rental vehicles. The use of rental vehicles was already a modification of its business model the company was using to get around German restrictions preventing it from “matching customers with drivers using their own vehicles, as it does in the U.S.”

    In addition to these problems, the company is facing increasing challenges regarding the legal definition of employees. California is just one example where laws could potentially alter Uber’s business model by classifying its drivers as employees, rather than contractors.

    In view of these challenges, it’s little wonder the company is looking at self-driving cars as the answer moving forward. Self-driving cars could eliminate the need for driver background checks, employee vs contractor debates and could be the ultimate answer to bans like Germany has imposed—provided self-driving cars become widely accepted.

    One of the biggest obstacles to adoption is ensuring the safety of self-driving cars. The new testing area will employ approximately 200 people and have an observation deck. Pittsburg is the center of Uber’s self-driving research and development, with the company also creating a fake city there—complete with roaming mannequins that jump out without warning—for testing the technology.

    The new testing ground should give Uber plenty of room to test a variety of scenarios.

  • Judge Sides With Uber & Lyft in NYC Cruising Cap Case

    Judge Sides With Uber & Lyft in NYC Cruising Cap Case

    According to Reuters, a judge has struck down a NYC rule “limiting how much time drivers for ride-hailing services can spend cruising streets in busy areas of Manhattan without passengers.”

    Uber and Lyft filed separate lawsuits challenging a NYC rule that was designed to ease congestion. With ride-sharing vehicles making up nearly a third of peak traffic, the city was attempting to prevent ride-sharing drivers from cruising the streets while waiting for new passengers.

    New York State Supreme Court Judge Lyle Frank issued his ruling in the case Uber brought, although he made it clear his ruling covered Lyft’s case as well, calling NYC’s cruising cap rule “arbitrary and capricious.”

    The mayor’s office indicated it may fight the ruling however, with a spokeswoman for the mayor saying: “We put these rules in place to protect hardworking drivers and New Yorkers—and we’ll fight to keep them.”

  • Uber’s Ride-Hailing Service Banned in Germany

    Uber’s Ride-Hailing Service Banned in Germany

    Reuters is reporting that a German court has banned Uber from providing its ride-hailing services in Germany, saying it lacks the license necessary to transport passengers in rental vehicles.

    Uber currently operates in seven German cities, including Berlin, Frankfurt and Munich. The issues stem from the fact that Uber works exclusively with rental car agencies and their drivers in Germany.

    While the ban goes into immediate effect, it is still open to appeal, and the company has not ruled out a legal challenge to the decision. In the meantime, Reuters reports that Uber is looking at other options for how it operates in Germany. What that would look like is anyone’s guess at this point, as a previous court ruling in 2015 prohibited the company from matching customers with drivers using their own vehicles, as it does in the U.S. That ruling is what originally prompted Uber to use rental car companies and their drivers to provide their service.

    Uber is facing increasing challenges and bans around the world. Just last month, the city of London denied Uber a license, citing safety concerns. In the wake of a recent report that thousands of sexual assaults and nine murders have occurred during rides, it’s a safe bet Uber will continue to meet with opposition.

  • Uber Sues LA Department of Transportation Over Electric Scooter Data, Cites Privacy Concerns

    Uber Sues LA Department of Transportation Over Electric Scooter Data, Cites Privacy Concerns

    According to a report by The Verge, Uber has said it will not share real-time electric scooter data with the Los Angeles Department of Transportation (LADOT) and is filing a lawsuit against the department.

    The suit revolves around LA’s use of Mobility Data Specification (MDS), a program LADOT developed to monitor dockless scooters that are becoming commonplace in many cities. The data provided by MDS can be used by city planners to evaluate traffic patterns, add needed bike lanes and more. The promise of data that has previously been unavailable has led cities across the country to adopt and contribute to MDS. LA, as well as Austin, Chattanooga, Columbus, Louisville, Omaha, San Jose and Seattle are all making MDS participation a condition for companies to receive the necessary permits to operate.

    Privacy advocates, however, are concerned that MDS gives cities unprecedented insight into people’s activity, since every part of a scooter’s route is tracked and recorded. Uber—who acquired scooter company Jump—along with Lyft and Bird have objected to MDS from the beginning and vowed to challenge the legality of the software. In particular, the company is hoping the California Electronic Communications Privacy Act (CalECPA), which became law in 2015, will provide it the legal teeth necessary to challenge LA’s position.

    The state’s Legislative Council has ruled that MDS may run afoul of CalECPA, specifically as the law prohibits local governments from requiring real-time data in exchange for an operating permit. The only exception is if a specific rider waves their right to privacy, although it must be waved by the rider, not by the ride-sharing company acting as an intermediary.

    Uber and Lyft are trying to get a temporary restraining order prohibiting LA from revoking their licenses. In the long-term, however, the legal battle over MDS will have far-reaching repercussions for privacy-minded individuals and corporations.

  • 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 CEO: We Expect This Business To Be Very Profitable

    Uber CEO: We Expect This Business To Be Very Profitable

    “Not only do we expect to hit cashflow break-even, but we expect this business to be very profitable at maturity,” says Uber CEO Dara Khosrowshahi. “I think that going forward our spending declines as a percent of revenue. So when you’re growing trips 35 percent year on year your spending is going to increase. But we’re going to get leverage on the marketing line and we’re definitely going to get fixed cost leverage going forward.”

    Dara Khosrowshahi, CEO of Uber, discusses the company’s latest quarterly results and predicts that Uber will ultimately be very profitable in an interview on CNBC:

    Uber Is Much More Than a Rideshare Company Now

    The IPO for us is a once in a lifetime moment. It was a really important moment for the company. Some of what we did like the driver appreciation award, almost $300 million that we put in the hands of over a million drivers globally were really important for us to do. It created a messy P&L from an accounting standpoint. I think it is hiding underlying trends that are actually very healthy for the company. If you look at trends for the company which is going to matter long-term, you have got gross bookings over $16 billion growing 37 percent on a year on year basis. You’ve got trip volume, and trips are units, growing 35 percent year on year. You’ve got audience, monthly active platform customers, now over 100 million, growing 30 percent. The actual revenue growth excluding the driver appreciation award was up 26 percent. 

    What I did tell our investors is to expect that to accelerate into the back half of the year. The back half of the year you are going to see if trends stay the same, revenue growth in excess of 30 percent. When you look at profitability, we beat our own internal targets and we beat Street targets as well. We came in at a loss of $656 million. It’s still a big loss but the losses are improving and the take rates are improving. If you back out some of those one-time expenses, we went from a loss of $800 million to a loss of $656 million. We got much more efficient on the marketing front. We actually took marketing as a percentage down while we were still growing the top line over 30 percent as well. This is much more than a rideshare company now, it’s a transportation company. 

    We Expect This Business To Be Very Profitable At Maturity

    We are in a situation as far as the network effect of the company where we don’t need to increase the marketing and incentives. We can go in with loyalty plans both for riders and drivers that are going to add to leverage and ultimately profitability of the company. This is a marketplace company that has over 20 percent revenue margins and revenue margins are increasing year on year. Not only do we expect to hit cashflow break-even, but we expect this business to be very profitable at maturity. 

    I think that going forward our spending declines as a percent of revenue. So when you’re growing trips 35 percent year on year your spending is going to increase. But we’re going to get leverage on the marketing line and we’re definitely going to get fixed cost leverage going forward. I think that this quarter proved that out and we have to keep hitting our marks in the next couple of quarters. It’s a super-competitive marketplace but we are confident. We like what we saw operationally this quarter.

    Uber CEO Dara Khosrowshahi: We Expect This Business To Be Very Profitable at Maturity
  • Virtual Restaurants Helping Power Uber Eats Growth

    Virtual Restaurants Helping Power Uber Eats Growth

    “Virtual restaurants is a very interesting initiative,” says Uber Eats EMEA head Rodrigo Arevalo. “Basically by leveraging the data on our platform, we can partner with other restaurants in order to cuisine types that only exist on food delivery platforms. If there is not a restaurant in a certain neighborhood we will partner with restaurants to make that happen. In the UK we are already doing 200 virtual restaurants and we are expanding throughout Europe, the Middle East, and Africa.”

    Rodrigo Arevalo, head of EMEA at Uber Eats, discusses how virtual restaurants are helping power Uber Eats Growth in an interview on Bloomberg:

    Virtual Restaurants Helping Power Uber Eats Growth

    Virtual restaurants is a very interesting initiative. Basically, by leveraging the data on our platform we can partner with other restaurants in order to cuisine types that only exist on food delivery platforms. That has two benefits. The first one is that it helps restaurants utilize their kitchens a lot more. The second one is that it increases their revenue on their top line. It’s a very interesting initiative to provide more choice and to increase business for restaurants. 

    If there is not a restaurant in a certain neighborhood we will partner with restaurants to make that happen. In the UK we are already doing 200 virtual restaurants and we are expanding throughout Europe, the Middle East, and Africa. It’s a type of local exercise that we are trying to tack on. It’s going really well and we’re excited about that.

    Uber East Demonstrates the Potential of Uber’s Logistics Platform

    Uber Eats fits into Uber’s overall strategy and portfolio in the way that it demonstrates the potential of Uber’s logistics platform. Just in three and a half years, we’ve been able to build a multi-billion dollar business and today we are already the biggest food delivery app outside of China. It’s all about the logistics network that we have built and how we can leverage the potential of that platform. 

    It’s about focus for us. We want to make sure that we deliver on the plan, deliver on the vision that (Uber CEO) Dara Khosrowshahi has set for the company. Focus is basically three pillars for Uber Eats. The first one is restaurant selection, providing consumers choice. The second one is customer experience for eaters, for restaurants, and for delivery partners. The third one is underpinning that with great technology and a great product that people would love to use every single day. 

    Uber Eats Partners With 220,000 Restaurants Globally

    We partner today with 220,000 restaurants globally and there is a vast variety of selection from every kind of meal that you would like; comfort food to the healthiest options such as vegan, salads, etc. We believe selection. We believe in consumer choice. We want to make sure that we provide all of those options to them. We very much focus on providing that information, providing those options, and making sure that consumers make an informed choice.

    When it comes to packaging we already partner with several companies that provide sustainable packaging. Given our platform, particularly in the UK, we already look for ways to facilitate sustainable packaging for restaurant partners, making sure we do our part in that sense.

    Virtual Restaurants Helping Power Uber Eats Growth – Uber Eats EMEA head Rodrigo Arevalo