Expensive rides or cash-strapped drivers? Uber’s dilemma through the eyes of a NYTimes reporter.
By: D.A. Mission
Tags: San Francisco, Ridesharing, Technology News, Silicon Valley, Uber

Uber has dominated so much of the marketshare, do you think an alternative — not Lyft — can become viable?

Right now in the United States, it’s basically a ride-sharing duopoly—Lyft and Uber. It would be difficult for me to see a third entrant make real headway unless they offered some super different value proposition. I’m unclear on what that would be right now. Would it be, a ride service that treated drivers better?

…It’s hard because they’ve already broken into these cities so well. It took so much money for Uber and Lyft to break in.

Abroad, it’s a much different story. There are so many different competitors that dominate different markets. I would say Uber has a much harder battle overseas where it has to fight so many more battles.

Kalanick recently sold a half billion dollars worth of stock. What does that mean for Uber’s stock value?

You saw one major investor, Shawn Carolan at Menlo Ventures, he tweeted saying, ‘I believe in the long-term viability of this company and I’m not going to sell any shares tomorrow.’

Normally, executives that are at the top of the company or really involved in it like to say, ‘look, I’m not gonna sell. I believe in the long-term value of this company.’ Travis clearly doesn’t care about those appearances, whether he believes in the long-term viability of the company or not, he just sold a very large chunk of stock. This could worry investors he thinks the stock won’t go up in value.

What’s the road to profitability for Uber?

There are a few levers. They can stop burning cash on initiatives that are expensive, like Uber Eats, where they have to burn a lot of money to grow, in countries where they might not even be winning. Or at the end of the day, they increase how much they charge riders or how much they take out of the driver’s cuts. It’s unclear. I think they’ve slowly been taking more out of each ride from drivers. It’s been showing in their financial results. That’s only gonna do so much. Dara said last week we have a path to profitability in 2021, but it’s still hard for me to say what exactly that will look like, or how they will get there.

In short, your estimation is they’ll pass the buck to the driver or the consumer?

Yeah. Those are the big levers to making more money that they have. Either you pay more for the ride or the driver’s get less for the ride.

Terrible options either way. So why won’t Uber release their traffic data to cities? If Uber is doing good, why won’t they work with cities or counties to alleviate congestion?

I think they see it as competitive, proprietary data that other competitors of theirs in private markets could use. It’s a hard problem … At the same time, they can’t say they want to work with cities and pretend to be a friend to cities when they are changing the entire landscape of how transportation works. It’s a hard problem. I don’t envy them, but I wouldn’t say they are a friend to cities like they say they are.

What impact would you say they’ve had on the Bay Area, where you and they both reside?

Just in the last 10 years they’ve been here and I’ve lived here, traffic has increased a zillion fold. It totally changed how transportation works here and they haven’t really done anything to address that or handle it or mitigate some of the problems. I don’t know if they will. It’s probably fundamental to their business because San Francisco is one of the biggest markets they have in the U.S. They’ve reaped the benefits of changing transportation without dealing with the side effects that comes with traffic and people driving from all over the state just to work in San Francisco. So it’s a problem.

Will Uber keep growing or does it have to stop and deal with all the fires that have been surrounding it?

The speculation I keep hearing is they might need to pull out of some markets. They definitely pulled out of a few markets when Dara first came on board. Now they might pull out of some more, but it’s unclear. It depends on where they’re spending money and how much they’re spending and if they want to keep that up, or if they can’t do it anymore and have to retrench. Which is entirely possible.

Can women request female drivers yet?

I don’t believe that’s an option yet on the platform although that’s something many women have requested over time, concerning the sexual assaults on any ride sharing platform.

What’s the big takeaway from the years you put into this book?

What I really wanted to get at was that for years Silicon Valley has operated on culture that worships tech founders and tech companies blindly and gives them complete control of their companies. And that thesis is worth questioning. Uber, where you have the wrong person having outsized control and being worshipped by his staff, that can really have adverse effects. I’m not going to say they are a bad or evil company or [that Travis is] a bad person — it’s more of a book about the side effects of this crazy growth and unbridled capitalism in Silicon Valley, something we should be more aware of in a time where tech now has to be accountable for what they do.

So accountability is the big takeaway.

I think that’s right.