The origin of Uber is linked to James Bond. Travis Kalanick had nothing to do with his emergence. The company copied its business model from other competitors that it ended up crushing. Kalanick left his girlfriend because he felt less passion for her than for Uber. The startup decided in 2012 to stop being respectful of the law, surrendering to a new maxim: when lawyers fail, use the power of users and faits accomplis to pressure politicians.
These are some of the statements that the journalist Brad Stone describes in his book What comes. How Uber, Airbnb and the new companies in Silicon Valley are changing the world (Deusto, 2017), an exhaustive investigation into the origins of the two great totems of the so-called collaborative economy. The person in charge of the technology section of Bloomberg News In the work, dozens of interviews with the main protagonists of these business phenomena, including Kalanick and Brian Chesky, founder of Airbnb, to make a rigorous and unconventional portrait of each company. In this first installment we will focus on Uber, the transport application that in less than ten years of life has managed to establish itself as a giant valued at around 60,000 million euros. No other company in the world has managed to grow so fast (born in 2009); few have caused so much controversy in so many countries.
- The origins and the fable
Those responsible for startups who achieve success like to spread inspiring origins of their companies. In the case of Uber, the official legend says that Kalanick himself had the vision of a level transportation service within reach of a button.
Stone offers in his book an alternative version. The enterprising Garrett Camp, who later enlisted his cause to Kalanick, had long been looking at the clandestine taxis that roamed San Francisco. Usually unmarked black sedans that communicated their availability by lighting people who seemed to wait for a taxi. The majority of users, especially women, stayed away from them, worried about their safety and the absence of a meter.
Camp realized that, generally, these cars were clean. And, after getting an agenda of several of them and studying their habits, found that one of his biggest concerns were the free time that passed between travel and travel.
It was then that he connected this idea with a scene from Royal Casino in which agent 007 sees on a real-time screen a little light representing a car. Camp wanted to develop an application capable of deriving passengers from drivers and showing the customer where their car is. It was the year 2009 and the iPhone, the first smartphone of the market, they were already proving that they had opened a product category.
- A copied business model
It turns out that, although it is the clear global dominator of the market, Uber did not invent the business in which it triumphed. "The most surprising thing is that there was already ubers before Uber and airbnbs before Airbnb. But since both were born in San Francisco, they had a lot of access to the technological community and to venture capital. Exposing your ideas to the right people can allow you to raise a lot of money, and when it comes to growing fast and expanding around the world to have the advantage of being the first to arrive, access to capital can make a difference, "Stone explains. by phone. Seamless Wheels, Magic Cab or Cabulous are some of the pioneers in the business. All of them were swallowed by Uber.
A fragment of the book illustrates it perfectly. John Wolpert, a former IBM worker, was the one who developed the app of Cabulous. It was launched six months before Uber appeared and contained many of the features that would later give success to the latter, such as showing drivers on a map. A year later, in 2010, Uber put an ad on Craiglist: it was looking for computer scientists to develop a transport application similar to Cabulous. Wolpert did not see well that Uber used the iPhone as a taximeter to calculate rates, a highly regulated operation in California. Uber did not mind getting into that garden and kept going.
Wolpert left Cabulous in 2011. Shortly after, she was drowned in front of Uber, who raised enough money to easily overcome her first rivals. "It was like watching a shark devour a seal. We live in an era of unscrupulous capitalists. If you have enough money and you can make the right calls, you can skip all the rules and even use it to advertise yourself. And it works, "Wolpert tells Stone in the book.
At first, Uber had its own fleet of cars. They were a service of limousines and black cars (less regulated than taxis) on demand, they wanted to make sure that the vehicles were impeccable. The idea of opening the service to drivers without a passenger transport license who put their own vehicles arrived much later: it was copied from Zimride, what would later be Lyft, in 2012. Where other competitors bet that the regulation of the taxi would come out victorious , Uber I trusted everything that could border it. It was what allowed the company to make the final leap in quality: by adding more vehicles, the availability of cars was greater. And it was also the origin of his arduous legal battles.
The founders of Uber were already entrepreneurs when they set up the company. They had started businesses before, they knew what the thing was about. And, since Kalanick got on the boat, they were clear that, in a business that moved in the folds of legality, the lobby and the pressure would be decisive for success. His tenacity to weather regulations in the US is, according to many analysts, one of the keys to the company's growth and consolidation.
"The legislation applicable to Uber's business was ambiguous. It was not clear if the company was breaking the rules or taking advantage of legal loopholes, "acknowledges Stone. "But the reasons given against the company (not being able to protect users or not being able to enforce a quality standard) have already been overcome by technology. In many places they found intermediate solutions: the possibility of operating with conditions. Then, with the users on their side, they have dedicated themselves to force the legislation ".
Stone refers to this strategy as Travis's Law. "It is based on the idea that my product is so superior that those who use it will end up demanding from the authorities the right to continue using it," the journalist illustrates. "And, to a large extent, that's how it has been. Uber should have been closed for coming into conflict with the regulation of the taxi. But, city after city, it has been conquering the world because people like useful and cheap services. "
When he achieved a dominant position in the US, Uber turned his gaze on the rest of the world. He tried to enter the gigantic Chinese market, but quickly withdrew from it when he understood that he had nothing to do there. The disembarkation in Europe was not idyllic either: he had to remove UberPop from Barcelona, the model of drivers without a license, shortly after launching the service. Some time later they launched UberX, which does have permits (in Spain they are the VTC). In the United Kingdom, the courts forced him to improve conditions of the drivers.
"I think that when they made the leap to Europe, they did not really think about how different the market is on both sides of the Atlantic," says Stone. "They followed the same road map that had gone so well in the US, and it did not work. The fact that the transport infrastructure offers more alternatives to the user and that the taxi drivers' unions are more powerful also influenced. and hardened. They have learned that Europe has different laws, "he emphasizes.
To lead the fastest growing company in the world, with a stock market valuation (some 60,000 million) higher than that of the major automobile companies, to be removed from the position due to image issues. These two situations have lived Travis Kalanick recently.
"Uber is a company that was never exactly humble, but rather aggressive. The world has changed. People demand transparency and responsibility, and Kalanick was not able to contribute that, hence they relieved him. The formula that worked so well at the beginning (breaking rules and moving forward) has had to be changed by listening to people and being conciliators. That's one of the reasons why Kalanick had to step aside, "explains Stone. Accusations of harassment by a worker and bad behavior by other workers they will also have something to do.
Uber's income does not stop growing year after year and, nevertheless, it continues to lose money. So far, the company's strategy has been based on burning the billions of capital it has raised to gain size, expand internationally and use the Travis effect to achieve a dominant position.
Sooner or later, investors will demand benefits. Where does the future of the company go? Stone believes that the answer may be in the autonomous vehicle, one of the projects in which the company has invested the most … and a field in which it has also been involved in controversy: Google accused Uber of industrial espionage.
"I think the new CEO is going to leave some countries, as has already been done with China and Russia. Surely go public in 2019. Uber surely depend on your bet on autonomous cars, "says Stone. We'll see how this bet goes.