Uber: Changing the Way People Move
The Most Controversial Tech Company in Silicon Valley
Why is Uber such a controversial tech company?
After writing about Airbnb, I thought: “Ha! Airbnb is kinda controversial.” Only to later realize that there is even a more controversial tech company in Silicon Valley, and that is: Uber. When I started digging deeper into Uber’s founding story and how it dominated the transportation industry, I couldn’t wrap my head around what I’d found. The company has done every single thing you could imagine to dominate its market: Breaking the laws and regulations, allegations of sexual harassment, going aggressive with the company’s work culture, and treating competitors like trash.
Not many tech companies hold that kind of “Bad” track record, but Uber does.
Uber, of course, could’ve avoided many “Unholy” bold steps it took, and still reached the point where it is right now. But on the other hand, Travis Kalanick, the co-founder and former CEO of Uber had totally “Different” beliefs, mindsets, work ethics, and leadership style for doing things at Uber, which led to many controversies.
But the combination of “Uber and Travis Kalanick” was just unmatched. And I don’t think Uber would’ve become what it is today if Travis weren’t the co-founder and former CEO of Uber. And that’s why it’s not only important to understand Uber, but it also would be useful and beneficial to study the co-founder of Uber, Travis Kalanick.
Get your popcorn ready and let’s dive in!
What is Uber
Here’s how Uber describes itself:
We are Uber. The go-getters. The kind of people who are relentless about our mission to help people go anywhere and get anything and earn their way. We are a tech company that connects the physical and digital worlds to help make movement happen at the tap of a button.
In simple words, Uber is a P2P marketplace that connects drivers with riders and vice versa. If you’re a driver, have a car, and want to earn money, you can become a “Partner” on Uber and start earning your way. And if you’re someone who doesn’t have a car, doesn't want to own one, but just wants quick rides, Uber can help you find a car to pick you up and drop you off whenever and wherever you want to go. For example, you want a ride to go to your office, or you want to go to your favorite place nearby, or it’s a date night—don’t worry, Uber has got you back.
The important thing to understand is, just like Airbnb doesn’t own any properties listed on its platform, Uber, also, doesn’t own all the cars or vehicles listed on its platform. Uber is a mediator that helps connect two parties: drivers and riders.
Here’s a simple elaboration:
Seems pretty similar to the traditional transportation system, right?
So what’s the difference between the traditional transportation system, and why do people use Uber instead of getting a taxi on the street? Well, that’s a pretty reasonable point. But to understand what makes Uber unique and special, you need to understand what traditional transportation lacks—at scale.
Now here’s the hypothesis:
Imagine you’re on the street of London, it’s 11:45 pm, it’s cold, snowy weather, you want to go home, but can’t find a taxi, waved your hands a dozen times but no one wants to pick you up, you don’t care about price, willing to pay $500 just to go home, but sadly, there aren’t any taxis in the streets in the given moment to help you out.
Lo and behold, you managed to arrive home! What a brutal experience, isn’t it?
The same scene but imagine there is Uber, you open the app, you see there are dozens of black cars and taxis near the town, you book a taxi. The taxi is safe because it has good ratings and reviews. And it says it’ll take 10 mins to arrive where you’re standing. You just sit back, open your beer bottle, and enjoy it until the taxi arrives. 10 mins in—the taxi is there, in front of you, the driver shouts: “Hello, let’s go, it's already too cold!”
No hand waves, no high price, no fear of whether the driver will kidnap you or something—just opening an app, tapping a few buttons, and a taxi pops up. That’s what Uber is about. Uber did something a century-old transportation system couldn’t.
The problem with traditional transportation systems, especially taxis, is that you don’t know when it will arrive, you don’t know what the price is, and it makes you afraid because you don't know who the taxi driver would be—a rapist, murderer, criminal, or a kind person? It isn’t just about pricing or timing, it’s also about trust and experience, which traditional transportation has never had a better system for.
Uber came and fixed those problems and dominated the transportation market. This means Uber is about trust, transparency, and user experience.
Founding Story
Uber’s story is about turning adversity into an opportunity.
Two American millionaires in their 30s, Travis Kalanick and Garrett Camp were in Paris to attend an Annual Conference, LeWeb in December 2008. Living in Paris, one night, hanging outside, they found themselves stuck in the streets of Paris, the night was snowy and cold, the black cars were passing by, the two guys just wanted to go to their apartment, but they couldn’t get any taxi or car that’d take them to their room.
Since both were entrepreneurs, an idea popped up in Garrett’s mind.
Garrett goes: What if there was an app that would help get a taxi with a few taps?” To which, Travis says “That seems a great idea.” Since they both had sold their companies for millions of dollars, they had an entrepreneurial mindset. And for an entrepreneur, every problem is a potential opportunity.
They somehow went back to their apartment but the idea stuck in Garrett's mind.
Garrett Camp was the co-founder and CEO of StumbleUpon, a social media website that helped users find content based on their interests. Garrett sold the company for $75 million to Ebay in May 2007. Travis Kalanick, too, had recently sold his company, Red Swoosh for $19 million to Akamai Technologies in October 2007, which he had started in 2001.
Since both had sold their companies for millions of dollars, they are practically free and looking for new opportunities. That’s why they were in Paris to attend the conference to just meet new tech-savvy people, take some free time, relax, and potentially brainstorm new ideas.
After attending the event, both entrepreneurs headed back to their living place, San Francisco, California. But as soon as Garrett came to his place he started thinking about this new idea that he believed would work. However, Travis wasn’t taking the idea seriously at that time and was minding his own business, although he agreed to be an advisor for what Garrett was about to build.
But Garrett saw potential in the idea and badly wanted to kick off the project.
So what did he do? Garrett called his two friends, Oscar Salazar and Conrad Whelan, bought a domain name UberCab.com, invested his own money, $300,000 to take the project off the ground, and built a prototype of the idea. Soon after building the product for a few months, the app went live in March 2009.
Well, on what basis the app was built on?
Garrett’s idea was pretty simple: To use the service (app), one would need a smartphone with GPS tracking on, and an online payment system to facilitate transactions—for drivers to receive the money, and for riders to make payments. The goal was that people could get professional black car riding just by tapping a few buttons on the app.
The prototype was ready, they just needed to test it with a few rides in the real world. To do this, the team secured a few Limo Drivers who had black cars and tested the drive with it. Garrett himself would book a ride and follow the process to see if the app was working properly or not. Garrett would also encourage his team to refer and share the app with their friends, family, and colleagues so that the app would gain traction and popularity.
Since it was too early, the prototype had two separate apps, one for drivers, and another for riders. The app started getting a few bookings per day here and there, but it wasn't a massive traffic junction. However, Garrett wanted to scale and grow UberCab.com, for which he needed more people to work.
So he asked Travis to join the company, which he did in June 2010.
Now the real journey has begun.
Travis Kalanick was hooked because now he could see the potential of the idea that Garrett had already seen a while ago. All they needed to do was, riddle the app with “Drivers” and “Riders” and the company was about to become a unicorn. The following year in 2010, the team launched the UberCab app in San Francisco in Beta—Trying to get some early users and riders, they pitched a couple of drivers and taxi workers, and luckily a few of them agreed to work with Uber as “Partners.”
The Beta version was successful.
As the app saw more traction and traffic, the team had to scale the product, which meant they needed to hire more people. So Travis tweeted this tweet on Twitter, to which Ryan Graves, who became the first employee of the company, responded: “heres a tip. email me :) graves.ryan[at]gmail.com”
The company was about to explode.
Early Days
UberCab.com, after a few months in Beta, officially launched in San Francisco in August 2010 in the charge of co-founders Garrett, Travis, and the CEO Ryan Graves (Yup, the guy who responded to Travis’ tweet) Since the guys had the previous entrepreneurial experience of running a company, they knew how to get people nodding their head to use the app.
Here’s the early version of UberCab.com. The UberCab had two apps, one for drivers and another for riders. Here’s what the UberCab app looked like for drivers:
Here’s what the UberCab app looked like for riders:
As a result, the app got so popular, so quickly that it received its first legal notice in September 2010—just one month after the official launch—from the Municipal Transportation Agency to Cease and Desist, saying it was operating without proper licensing, which was true because the company had no legal team or government approval to let drivers ride cars through the app.
The main problem they faced with its company name—since it was UberCab—with a “Cab” in the name, they weren’t supposed to let drivers ride a car without proper licensing and legal approval. So what did the company do? Well, they change the name from “UberCab.com” to “Uber.com”
The journey of Uber has begun.
In December 2010, Travis became the CEO of the company and Ryan held the position of General Manager and Senior Vice President of Global Operations. From here, the team was headed to scaling the company to more cities, globally.
With its popularity and adaptation, the company secured funding of $1.3 million by the end of 2010—led by First Round Capital, and with that, Uber started expanding the service in cities like New York, Boston, Seattle, Chicago, etc. The company kept making progress and it raised a second venture fund of $11 million by Benchmark at the valuation of $50 million in early 2011.
3 Years later, in December 2011, the company expanded its business to Paris, France, where the original idea had popped up in the co-founders’ mind—one of the most ambitious goals the co-founders had at that time when it came to scaling.
In 2012, the company introduced UberX, a car-riding service, which would allow anyone to join Uber and become a “Partner” and was less expensive than what Uber was actually offering with normal rides via black cars. This allowed Uber to scale the company at gorilla speed. This was also the year when Uber raised $37 million of VC money from Google Venture and Benchmark Capital at the company’s valuation of $330 million.
Now one thing to keep in mind is that booking rides on Uber was more expensive than what you would get from a traditional taxi service. But despite that people adopted Uber because Uber did the following things:
Trust and reviews
Transparent pricing
Estimated time arrival
Location tracking system
The business model worked and by the end of December 2013, Uber was already operating in 65 cities worldwide—showing a massive adoption of Uber riding service worldwide.
In August 2014, Uber launched what they called “UberPool” which would allow riders to share rides and split the cost between each other—if they are going in the same direction. Turns out, this was another massive success for Uber, and as a result by the end of 2014, Uber was available in 100 cities worldwide.
Now as Uber started getting more popular and successful, it kept thinking about what it could do next. The team wanted to tap into every single area of transportation they possibly could. As a result, in 2015, the company launched Uber Eats—offering food delivery service to people.
By the end of 2015, the company had served 1 billion in total rides through Uber. But what’s interesting is, as the company grew, so did its controversies and challenges. And at this point, the company had faced several controversies and legal challenges, which I’ll discuss later in this deep dive.
Travis Kalanick
The guy is fascinating.
Travis' contribution to growing Uber is enormous. The guy single-handedly made Uber stand out in the market by crushing competitors like trash, disobeying laws and regulations, and going aggressive, too aggressive with leadership style.
However, many things Travis did were wrong, and we all wish that he couldn’t have done them—directly or indirectly, which also could've saved him from resigning as the CEO of the company in 2017. But whatever, I gotta have to say: Uber wouldn’t have become what it is today if Travis weren’t the co-founder and CEO of the company.
Let’s take a look at Travis Kalanick's life's journey and his working style.
Travis was born in Los Angeles in August 1976. His father, Donald Edward Kalanick was a civil engineer. And mother, Bonnie Renée Horowitz Kalanick worked in retail advertising. Seeing his parents working hard, Travis got exposed to the “Hustle Culture.” and soon became a “Hustler.”
When Travis started going to school, he would get bullied by his school colleagues. So to escape from it, Travis would busy himself doing work or not even attending classes. Although, Travis was a wonderful, brilliant student growing up.
When he was in teen-age, he started working for a Direct Sales Knife Company called Cutco. He would knock on doors-to-doors to sell knives for the company—allowing him to hone and sharpen his natural selling and marketing skills, which you can clearly see when he does live presentations—the guy knows how to influence and hook people’s attention.
Travis at 18, with his friend’s father, started a coaching company called the New Way Academy, which would help students clear SAT exams. Running this on a side, after schooling he studied computer engineering and business economics at the University of California, Los Angeles.
You see, where all this leadership style was coming from? And it was just the beginning.
In 1998, when Travis was just 21, dropped out of UCLA along with his friends Michel Todd and Vince Busam to work full time at Scour, which was a peer-to-peer file-sharing platform founded by Dan Rodrigues in 1997.
After growing the company for a few years, in 2000 the company got a massive lawsuit of $250 billion for alleged copyright infringement from the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), and the National Music Publishers Association (NMPA).
The company had no option other than filing a Chapter 11 Bankruptcy to save the company from the lawsuit—A very dark moment for Scour and its team, especially for Travis who’d put all his efforts into growing the company as a head of sales & marketing.
The Revenge Business begins.
In 2001, Travis Kalanick and Michel Todd started a new company called Red Swoosh, pretty similar to Scour, a file and media-sharing platform. This was a revenge business against MPAA and RIAA for killing Scour. The idea was that the big media companies would pay money to Red Swoosh to share copies of files and media with customers. Red Swoosh has developed a model that would allow file sharing with ease and more efficiently.
Red Swoosh did grow, but it faced many legal battles and the company had many allegations of data breach. The company co-founders separated because both thought of different ways to run the company, as a result, Todd left the company. Soon after a few years of running the company, Travis sold Red Swoosh to Akamai Technologies for $19 million in 2007.
Now all these experiences and incidents were not only learnings for Travis, but also they served him as “Mantras” to run all the future companies he would build. After selling Red Swoosh, Travis became filthy rich, and he traveled to many countries including France, Japan, Spain, Greece, Iceland, etc—a full year of traveling just to enjoy life. In 2008, they were in Paris, and the journey of Uber began.
And the rest is history as they say.
Many of Travis working and leadership style is influenced by reading works of Ayn Rand’s Philosophy, the author who was known to promote “Objectivism.” Also, he has been influenced by seeing his parents working hard, and promoting hustle culture.
After serving at Uber for 7 years, because of his aggressive leadership style and the problems the company had faced due to him, for example, cases like sexual harassment, which Susan, one of the ex-employees of Uber described in this article, Travis Kalanick resigned as the CEO of the company in 2017, and Dara Khosrowshahi became the new CEO. Travis sold his majority of stocks worth $2.9 billion in late 2019.
Then he took some break from his entrepreneurial journey. And later, around 2019, he started many new businesses like Venture Fund, 10100, and then shortly he announced that he had invested $150 million in storage facilities, and started a new company called Cloud Kitchen. Travis is the CEO of his new company, Cloud Kitchen—the company was once valued at $15 billion in 2021.
What about his personal life?
Nothing pretty much, he is still single, no kids. Although he dated Gabi Holzwarth, a violist and business development manager, from 2014 to late 2016. Then he started dating Daniela López Osorio, a Colombian model known for her work with Victoria's Secret in early 2021, but the relationship ended in less than a year.
But here’s an interesting thing: In the recent All-In Summit Podcast, Travis was invited to talk, where Jason Calacanis asked him: “if Uber would ask him to come back to the company, will he do it, will he consider it?” To which Travis said “Well I definitely know who the head of my comms would be” Watch the video here, especially the last part:
Well, that was about Travis. Later in this article, I’ll go deeper into the ‘Holy and unholy” tactics and strategies he used to grow and scale Uber when he was the CEO of the company.
Uber Business Models
Let’s face it: Unlike Amazon, Google, or Stripe, Uber doesn’t have 12 revenue streams. But it does have a couple of different things on its plate that make money for the company. You may know Uber as a ride-hailing service, but I want to tell you that it’s more than just a ride-sharing company.
But one thing you want to keep in mind is that Uber is a platform that only makes money when its customers make money. Because Uber provides services, not products. It’s a mediator that connects two parties—drivers and riders and takes its service fee in the form of a commission.
Let’s see how Uber makes money:
Ride Hailing Service
Uber’s primary business model is to provide transportation services connecting drivers and riders on the platform. Uber connects drivers with riders and vice versa. For a driver, to become a partner on Uber, one needs an Uber app, a GPS tracking system on, and an internet connection. For a rider, one needs an Uber app and a card or an online payment-supported method to make payment on the app, and just book the ride as they go.
Although there isn't a fixed fee on how much Uber charges to drivers or riders when a ride is done. The fee comes with the initial pricing, the distance of the trip, and the location. There is also a term Uber called “Surge Pricing" when the riding prices increase when Uber sees more demand for cars and services. To give you a general idea, Uber takes around 15-25% of a ride, and the rest goes to the driver.
Uber for Business
Uber for Business? Sounds awesome!
There is also a plan Uber offers for corporate companies. If you have a company and people working for your company, of course, they need to travel back and forth to come and go to the company office, or of course, they would need to eat and drink when working.
And this is what Uber solves.
Uber for Businesses offers a riding service for businesses and also offers food delivery services, which I'll talk about in the below point. The service of this type of offering is expensive since it's for “Businesses and Groups"
Uber Eats
Uber doesn’t just help people ride and drive.
Uber Eats helps connect Uber's users to their favorite restaurants and food stores and lets them book their favorite meals. Once the meal is booked it notified a partnered delivery agent that'll deliver the food on time. However, one needs to download Uber Eats app if they want to use it, meaning yes it has a separate app than Uber.
Uber's service fee for food delivery is around 15-20%.
Freight and Logistics
Uber Fright? Damn god!
Not just food and ride, Uber helps ship cargo too.
Uber connects shippers with truck companies and helps ship the product to its customers. Uber service fee for this type of service is around 15-20%. However, the shipper and truck companies have to take care of their business expenses. For example, for shippers, it's loading costs and distance costs, and for truck companies, it's fuel and workers expenses.
Uber’s Strategy
Uber’s strategy is one of the most unspoken topics in the tech world.
Anyone can benefit from studying Uber’s growth strategies, especially strategies that the company used when it was fairly new. Because studying Uber’s strategy won’t just give you all the things it did to grow the company, but you also get to know how far you can go to grow a company.
So my job for this section would be to list down all the tactics Uber used in its early days and explain them in a way that is not time-consuming and confusing.
However, because of Uber's many “Unholy” strategies and tactics, the company faced several allegations and controversies, which I’ll cover in the following list. There are two types of strategies I’m going to cover—good and bad. Some of them were bad strategies being used when Travis was the CEO, which I’m going to cover in the first part. Then some of them, which mostly happen to be good strategies, and are still being used in the company, which I’m going to cover in the second part.
Let’s roll.
The God View
This was one of the finest strategies Uber used in its early days.
God View was an internal tool that was designed for Uber’s employees to track drivers and riders' real-time locations. Although it was designed to serve a good purpose for the company. With the help of the tool, the employees can see the demand and supply ratio and adjust the pricing accordingly—helping the company make more profit while increasing efficiency.
The strategy was uncalled for many years by public.
In the leadership of Travis Kalanick, the CEO of the company, came up with the idea of tracking drivers’ and riders’ locations in real-time, even if they aren’t using the platform service. But things got turned back when employees started using it for their personal advantage, for example tracking public-figure locations, like journalists, celebrities, influencers, etc for their own personal gain.
Later, the company shut down the tool, on public demand.
But the tool really helped Uber track the trip's live location, cancellations, mis-trips, supply and demand ratio, and find lost drivers, which ultimately helped the company improve the product.
The GreyBall
Another masterstroke, powerful tool Travis and its team members had built was “GreyBall.”
See, in the early days of Uber, the company had many issues with legal teams, government officials, and people who were in the political power. And the company's goal was to avoid interacting with those people as little as they could.
So what did they do?
They built “GreyBall,” an internal tool that helped identify and track government officials and not let them use Uber service. How did it work? When a government official would create an Uber account, the system would check the person's identity via credit card information, location, phone number, etc, and lets the Uber team know that some “Flagged” person has created an account, and segments it from the common list—Allowing Uber to control the person’s needs.
So whenever and wherever those flagged official people want rides, the app would show them no car, taxi, or service near the area. Why? Because Uber didn’t want to serve those people since it could cause the company to face many issues in the future.
However, the strategy is no longer in use at Uber.
Let the Builders Build
This was actually a good “ Company Culture” Uber had.
Travis, the CEO of the company, was a big believer in taking bold risks and doing things independently, with freedom of mind. So he created this culture called “Let the Builders Build.” It was all about building things from one's own thinking and creativity—without asking for persimmon or seeing laws and regulations.
This was a massive mental unlock for employees like engineers, designers, product markers, etc to think differently, and not constraint their thinking and creativity, by any definition. As a result, it allowed the team to “Build what they want to build” without caring about what laws and regulations were saying.
Uber had already had legal battles, so imagine if Travis had created a culture like “Guys, whatever you build, make sure you’re not breaking the laws and regulations” type of culture, this would have constrained the creative freedom of Uber’s employees and team members, wouldn’t it?
This strategy was also quite successful, but the strategy is no longer in use at Uber.
Blitzscaling
Blitzscaling is a term coined by LinkedIn co-founder Reid Hoffman.
Another superpower Uber used in the early days when Travis was the leader, was: “Scale, before it’s too late.” This means the company tried to scale its service to new cities as soon as possible. And the reason for this was because, once the company was established in a city, and if people were using the service, then Uber could leverage its customers and power to fight legal challenges with the help of its customers.
Uber knew that any laws or regulations could be avoided or changed if the company had a majority of votes. But the only way to get the majority of votes in the company's favor was to get to the new cities and scale the service as fast as they could.
Another use case of this strategy, Uber used was with—Hiring.
As part of blitzscaling at Uber, managers would ask a newly hired engineer, “Who are the three best engineers you’ve worked with in your previous job?” And then they’d send those engineers offer letters. No interview. No reference checking. Just an offer letter. They’ve had to scale their engineering fast, and that’s a key technique that they’ve deployed.
And you know what? It worked, worked so well.
Destroying Lyft
When Uber was really growing, Lyft came along.
But under the leadership of Travis, Uber crushed Lyft like trash. Travis and his team used all the possible strategies and tactics they could to destroy Lyft. Reason? Because Travis didn’t like someone stealing their customer or splitting the customers, he believed there should be just one: Uber.
Here’s what Uber did to Lyft:
First: Uber’s employees would create fake Lyft accounts, book a ride, and then cancel the ride at the last minute to make the experience really bad for Lyft drivers.
Second: Uber would reach out and hire Lyft’s talented engineers by offering them higher salaries and premium bonuses.
Third: Uber would encourage Lyft’s drivers to leave the company and join Uber by claiming they would earn more money and work less.
Fourth: Travis would personally call Lyft’s investors and try to manipulate them so that Lyft wouldn’t get the deal flow.
These are just a few, there are many incidents like these. In the leadership of Travis, Uber treated Lyft like trash. But regardless of everything, Lyft is still in the market and is a billion-dollar company, which is pretty awesome.
Subsidizing Drivers & Riders
This was one of the core strategies of Uber in the early days.
To attract new drivers, Uber would offer them free signup bonuses up to $500-$1,000 and guarantee them a fixed income to make the job lucrative. For example in some cities like New York drivers could earn $25 per hour, Uber claimed.
Similarly, Uber also offered 50-75% discounted prices for riders on their first ride, which also seemed a good deal for people who wanted to try the service. But this was a whole another level of strategy Uber was playing with its new customers in the early days.
Not only this, Uber would also reach out to Lyft drivers and ask them to leave Lyft to join Uber by telling them that they’d earn more and work less, which worked for many drivers since they also wanted to earn more and work less.
However, this was not a bad strategy because any company trying to grow in the early days may use this strategy. Uber still, to date, uses some of its discount and free ride strategies to make people start using the service, but it doesn’t give a massive promo or discount code of 70% off.
Surge Pricing
This has been the most powerful, lucrative, and master strategy for Uber. What is surge pricing? It’s the game of demand and supply. When demand is high, and supply is low, you see a spike in Uber’s ride pricing.
For example, let’s say it’s Thanksgiving day, and Uber sees that, in Austin, there is demand for cars and taxis because people have to travel from one place to another. So what does it do? It’ll increase the price of Uber’s car rides (All cars and taxis on Uber) and charge double or triple for the same distance of trip than what it normally would do. And it works because people need taxis and cars to travel, so they are forced to pay the amount Uber asked them for.
Again, this isn’t a bad strategy because all Uber is doing is taking the leverage of the golden opportunity. But for people and the media, this is a bad strategy, and many people argue that Uber should remove this strategy from its platform.
Tapping Into Different Niches
This is a common strategy almost all tech companies use when it comes to growing and scaling a platform. For example, Google has—Google Cloud, Google Map, Google Web Browser Chrome, Google Gemini and so many other products. Microsoft has—Microsoft Web Browser Edge, Windows Laptop and Gadgets, Microsoft Cloud, and so many other products. Stripe has—Stripe Atlas, Stripe Billing, Stripe Connect, Stripe Sigma, Stripe Radar and so many other products.
And what does is, it allows a platform to scale—at scale.
The same thing is true for Uber. It has also tapped into many different sectors and is still investing and seeking new opportunities under its radar. For example, Uber has—Uber Eats, Uber for Business, Uber Freight and Logistics, and Uber Gifts. This helps Uber expand its reach and growth to a wider audience and helps generate more income than what it’d make when it was just a riding platform.
So these are some of the strategies Uber uses or has used in the past.
I know some of the strategies I have covered are unethical and definitely not good for a company to use. I personally also don’t feel comfortable recommending some of the strategies I shared above to anyone. Because I believe, Karma is real and we should just do good work and grow our companies in the best possible, friendly way.
Uber's Financials
When your product becomes a verb, you know you’ve made it.
Just like we say, “Let’s Google it” or "I Airbnb this treehouse” people know what you’re talking about. The same thing is true for Uber, “Do you own a car? No, I just Uber.” You see what I mean. Uber has become a verb that we use in our daily lives. And for that reason, if a product or service is a verb, no chance you’d be a broke company.
Let’s dive into Uber’s financials.
The company has been generating a pretty solid Total Annual Revenue for the last couple of years, from $13 billion in total revenue in 2019 to $41.9 billion in total revenue in the last 12 months—a remarkable compound annual growth rate of 27.95%!
Uber’s Net Income, which was negative for many years, has turned positive in 2023. The company has seen a 2x growth in just two years—$1.8 billion in net income in 2023 to $4.4 billion in the last 12 months. Similarly, the Operating Income which was also negative for many years—a loss of -$8.5 billion in 2019, has turned into a profitable $2.6 billion in LTM—a strong indicator that the company has well reduced its costs and expenses—showing a strong business sustainability.
Since the company’s IPO in 2019, the share price has nearly doubled as of 2024—jumped from $68 per share to $128 per share price. However, the company had seen a dip between 2022 to 2023, a lowest of $41 per share. But from 2023, the company is on the upward movement—showing a strong adoption of Uber service in the market.
Uber keeps investing money in its Research and Development expenses, from $4.8 billion in 2019 to a slightly decreased $3.1 billion of total spending, showing a strong indicator that the company is on its way to finding new opportunities and tapping into different sectors to generate income. Net profit margin has become positive in recent years, in 2019, the company’s net profit margin was -65%, -28% in 2022, and in the last 12 months it’s 10.5% of net profit margin.
For the first time in history, the company’s earnings in positive, which was a negative of -$9.4 billion in total earnings in 2022, has increased from $2.3 billion in 2023 to $5 billion in 2024—a strong signal towards regaining control over the revenue sources of the company.
A few more stats about Uber:
Ube HQ: San Francisco, Bay Area
Uber Total Employees: 30,400
Uber worldwide: 70 countries, 10,000 cities
Total Uber drivers: 7.8 million
Total Uber riders: 161 million monthly active users
Total trips via Uber: 47 billion, 2.9 billion this year alone (2024)
Note: The data above are based on my own research and personal opinion. The author doesn’t encourage readers to invest in the company through this article. But if you plan to invest in the company, make sure you do your own due diligence. And if you want to learn more about the company’s financials, read this.
Challenges & Controversies
As the company grew, so did its challenges and controversies.
In the early days of Uber, the company faced many challenges and controversies—the aggressive leadership style and company culture, breaking the laws and regulations, the customer-company relationships, and so many others. However, in recent years, Uber has had no bad track record.
But when Travis Kalanick was the CEO, the company not only grew pretty fast, but it also brought many saddest moments for the company.
Uber, as a company, did many unholy things, which got the company into so many troubles. Most of the incidents occurred when the company was fairly new and when it was growing. Here are some of the most controversial controversies and challenges the company faced.
Breaking the Laws and Regulations
The ride-sharing company, Uber has broken many laws, intentionally over the years.
Uber doesn’t call its drivers “Employees” but gig workers and independent contractors, better known as “Partners.” This has been a legal battle between the local regulation system and Uber. The laws and regulations would say “You can’t have a driver driving a car without legal approval. But then Uber would go: “We are not a car company, we are just a technology company, so we don’t need to follow the rules and regulations!”
This is an ongoing battle between Uber and government officials.
The company has been sued by many local taxi service agencies, but Travis held the mantra: “We believe in forgiveness, not permission.” and would still keep running the operation. To tackle the legal battle one approach Uber had used when it was growing was:“
Dominate the local market as soon as they can, and then if something happens—any legal law would try to push them back, let their drivers and customers take care of the situation.
This worked most of the time in most places, and Uber won many legal battles this way. When Uber would face any trouble, Travis and the Uber team would ask the customers and drivers to protest and speak for Uber, which worked.
In 2014, in regards to airport pickups, the company didn’t have permission in California. But still, Uber encouraged its drivers to serve airports, and Uber told its drivers that they didn’t need to follow the rules and law—saying Uber would pay any amount of citation fees—drivers didn’t need to worry. And when they really faced the penalty and challenges, Uber just asked its drivers to protest to support the company.
Treating Competitors Like Trash (Lyft)
In the early days when Uber had just picked up its growth, Lyft came along.
Under the leadership of Travis Kalanick, do you know what Uber did to Lyft? It’s terrifying. Uber did something to Lyft no company does to its competitors. Here’s what you need to know:
First: Uber’s employees would create fake Lyft accounts, book a ride, and then cancel the ride at the last minute to make the experience really bad for Lyft drivers.
Second: Uber would reach out and hire Lyft’s talented engineers by offering them higher salaries and premium bonuses.
Third: Uber would encourage Lyft’s drivers to leave the company and join Uber by claiming they would earn more money and work less.
Fourth: Travis would personally call Lyft’s investors and try to manipulate them so that Lyft wouldn’t get the deal flow.
Too extreme, right? In the leadership of Travis, Uber treated Lyft like trash. But regardless of everything, Lyft is still in the market and is a billion-dollar company, which is pretty awesome.
Customers’ Data Breaches
In the early days, Uber wasn’t taking its customers' data seriously.
In 2015, Uber admitted that more than 50,000 Uber drivers' data, such as name, license plate, and personal address had been disclosed mistakenly. The company informed its drivers about the case five months after the incident, which is just crazy!
Another massive data breach accidentally happened in 2017, when hackers hacked 600,000 drivers’ and 57 million customers' names, personal addresses, licenses, and phone numbers. Hackers asked Uber to pay $100,000 if they wanted hackers to delete the data they had about Uber’s users. Thankfully, the hackers deleted the data in exchange for $100,000.
The CEO Talking to an Uber Driver
Now this incident was personally brutal for Travis Kalanick.
At the beginning of 2017, one day, Travis had booked an Uber to go to dinner with Arianna Huffington, the co-founder of Huffington Post. The ride went well, but as soon as they reached the destination, the Uber driver started talking about how the company has changed in the last 10 years—making his point that because of Uber’s change, and because of Travis, he almost went bankrupt—a loss of $97,000.
On top of that, Travis said, they were cutting black cars in the coming months, which was another setback for the driver because the driver had a black car. Things got worse when before leaving the place, Travis went aggressive with his words saying “ Stop complaining…Good luck to you” to which the Uber driver said, “Good luck to you too, I know you won’t go too far!”
The video went viral on social media and Travis got in big trouble. Although he later apologized for his misbehavior. But it was too late. Watch the full video below to see what really happened:
Susan Experiencing Sexual Harassment
Things got disastrous for Travis and the company when Susan expressed her experience working at Uber by writing a blog post on her website. Since that driver’s video had already gone viral, Susan, one of Uber’s engineers, took the courage to share her experience working at Uber.
In the blog post, Susan shared how Uber’s managers and HR team were misbehaving with her—instead of solving her problem. She was a victim of sexual harassment from one of the company’s members, who was forcing her to indulge in sexual activities. When Susan complained about it, no one took it seriously saying “The guy you’re complaining about has a good track record” Months passed by and nothing happened. So the only option she had was to share her experience publicly online.
Here’s what she said:
Now this was definitely not good for Travis as the CEO of the company, and also for the company. Now this blog post and the recent viral video were enough for people, investors, and members who were part of the company to force and ask Travis Kalanick to resign from Uber as CEO.
The following year Travis resigned as the CEO of Uber.
Travis Leadership Style & Company’s Work Culture
You know there is a saying: “When the devil hits you, it hits you badly.”
Seeing his parents working hard, and experiencing many failures in his early business career taught Travis how to handle rejection and how to be an exceptional leader in such a way that does whatever it takes to dominate an industry. Travis has been a “Hustler” since he was a teenager—selling knives door-to-door, starting the New Way Academy, Scour, Red Swoosh—had taught him priceless lessons about leadership and running a business.
But I think that’s no different than Elon Musk or Jeff Bezos' leadership style. If you dig deep into Amazon, Tesla, or SpaceX company’s culture, you’ll find that these companies also force and encourage employees to work long hours, prioritize the hustler mentality, and have an aggressive leadership style, which of course, helps the companies drive outstanding results—at scale.
This forces me to say that some people are built differently, you know. No matter how hard you try, their behaviors, work, and leadership style don’t change by a degree. While that’s, to a degree, a good thing for a company in the short term, but has very negative consequences in the long run, which is why I do not support such things.
Running the company, Travis formed the following culture and leadership style at Uber:
#1: Go All In: One of Travis' strong leadership styles was, to go all in and put everything you have—energy, time, resources to succeed at the thing you’re doing. He believed that either you should do it all the way down, or don’t even touch it.
#2: Let the Builders Build: Another tactic Travis used while running Uber was “Let the builders build” culture. He believed that employees and teams perform best when they are undisturbed. But this means they also could break any rules and laws without asking for permission, which of course led Uber to many controversies and challenges.
#3: Bro Culture: When the company was new, in the charge of Travis, Women experienced several inappropriate behaviors from Uber’s male employees, and would overlook women's positions, output, and work.
#4: Long Hours Work: Employees had to work long hours late at night, this would cause stress, anxiety, depression, lack of work-life balance, and also drive low-quality output.
#5: Win-at-All-Cost Mentality: The company would incentivize employees and teams to work hard and do any given tasks on time, and if required break the laws and regulations. The company went way beyond what is right and what is wrong.
It is worth saying that what helped Uber grow in the early days also backfired when things got out of the company’s control and people started talking about them in public. Although, many things I talked about in the above points aren’t part of the company’s culture anymore.
Scaling the Company Worldwide
On one hand, the company faced several allegations and legal challenges, on the other hand, the company struggled to expand its service worldwide. No doubt, Uber is operating in an industry that is massively backed by local authorities and traditional transportation systems.
This makes it damn challenging for Uber to expand its service in more countries, fast. To give you some context, as of now Uber is operating in only 70 countries, and 10,000 cities, which is not huge, but also not too thin.
Why am I saying it’s not too big?
Take the example of Airbnb, the company operates in 220 countries worldwide, which is just 3x more than Uber. Although, Airbnb works in a different industry, and has successfully positioned itself from the traditional hotel chains.
But I think Uber could also have done that if it had not had all the controversies and allegations, which broadly created a “Bad” image of Uber worldwide. The reason Airbnb successfully expanded its service in more countries than Uber is because Airbnb focused on community building and gaining the trust of people. Airbnb didn’t waste much of its early days breaking laws or becoming a media outlet for bad things.
But guess what? Uber did, and did many times!
If Uber wants its service to reach more countries worldwide, it needs to make sure that people believe in the product and service, which I think as of now, in many countries, it has failed to do. Uber needs to focus more on community building and gaining trust in the market.
Changing laws and regulations is hard, but can be done, if done right. To do this, Uber needs the support of people and customers. And Uber can achieve this by building a community and gaining people’s trust. The fact is if your community is bigger than laws and regulations, then ultimately you win.
Thanks for reading, catch you on the next one.
Uber failed to become Apple. It's Android with tens of copies that are similar.