But here's the thing.
They're beginning to collapse,
and it's showing us the truth.
Uber hasn't turned a profit in its 13 year history,
which might not be the biggest surprise, because
back in 2019, the company literally said there's a
chance it may never make money.
But that didn't stop investors from throwing endless piles of cash at it, giving it an
Three years later, the company
still hasn't turned a profit.
Its value dropped by half.
And it just got much worse.
Leaked internal documents are now showing us the gruesome reality
behind what seemed like a simple app to use when
you want to pay someone to pay someone get you a bagel.
Combine this with rising fuel and labor costs,
and the future looks far from
certain for Uber customers, investors and drivers.
At launch in 2009, called itself a ride-sharing app.
The pitch was, anyone can afford a private driver
if you share the driver and their car.
But it quickly turned into a modern taxi service.
Right away, Uber had a secret to its success.
It dramatically reduced the cost to become a
cab driver, which was huge.
In most cities, to operate a taxi, you need to pay
for a medallion or a taxi license.
They're limited, and, boy, can they get expensive.
This all meant that Uber drivers were able to
work for less money than taxi drivers and savings
would ideally pass on to the customer.
It was an unstoppable business model, and within
a decade, it took over the world.
But building a better taxi service wasn't the only
thing Uber did to conquer the cab industry.
We now know a lot more about Uber
strategy thanks to this guy, Mark MacGann,
a former Uber exec who recently leaked
124,000 internal company documents.
It ain't pretty.
As the business expanded all around the world,
Uber reps cozied up to government officials,
influential billionaires, oligarchs, and media moguls.
They were bold.
They'd enter markets knowing their unlicensed taxi service
was illegal, or f**king illegal, as one Uber
exec put it in a leaked email.
Their plan was very simple, though.
Set up shop in a new city and see what happens.
What'd typically happen was what McGann called a sh*tstorm.
Uber execs started calling their business model, get this,
the pyramid of sh*t, a pyramid, built on a base
of driver lawsuits on the bottom, investigations by regulators
in the middle, and harassment allegations on top.
More on that later.
But despite being built with dookie, things just
always seemed to work out for Uber.
They would enter a city and almost always
become legalized in one way or another.
It turns out Uber put those billions
from early investors to good use.
They built a network of connections
with the world's rich and powerful.
Here is one example.
In 2015, taxi drivers in France were livid.
They protested against Uber's arrival, and
things got a little bit heated.
The local government partially suspended
Uber's service as results.
So McGann from Uber got out his phone and texted
a guy named Macron, the economy minister of France.
He promised to, "look into this personally".
And within hours, magically,
the Uber suspension was revised.
But a business getting buddy buddy with
government officials isn't all that surprising.
It happens everywhere.
What's more surprising is that Travis Kalanick,
Uber's old CEO, tried to take advantage
of violent protests for the company's gain.
When angry cowies protested against the company,
Kalanick and McGann talked about setting up
counter protests that would use,
"disobedience to push for Uber's acceptance".
In retrospect, it was sort of a weird idea.
I mean, who's going to show up to this protest?
How do you get people to take to
the streets demanding slightly cheaper cab fares?
But Uber's bigwigs took this seriously.
Kalanick even said, "I think it's worth it."
"Violence guarantees success."
And little did Kalanick know that his time as
head of Uber was about to be cut short.
The CEO was just growing too controversial.
He took some heat for joining
Trump's economic advisory panel, and the
harassment scandal sure didn't help either.
Not to mention, Kalanick was caught on camera in
a pretty cringey argument with an Uber driver.
[Driver] I lost $97,000 because of you.
I'm bankrupt because of you.
You keep changing every day.
[Kalanick] Hold on a second.
What have I changed about black?
- You changed the whole business.
- What? What?
- You dropped the prices.
- On black?
Yes, you did.
- We started with $20.
We started with $20.
How much is the mile now, $2.75?
- You know what?
- What?
- Some people don't like to take responsibility for their own shit.
They blame every single thing in their life on somebody else.
Good luck.
- Good luck to you, too.
- Somewhere in all, this was his last straw.
Enter Uber's new CEO.
His first job was a big one,
clean up the company's image.
The new boss got rid of Kalanick's original
14 values for Uber, which included things like
Always be hustlin' and Superpumped, which sounds more like what
you see on the walls of a cheesy gym,
not one of the biggest companies in the world.
But either way, he replaced them with a set
of eight cultural norms that included things like
"We celebrate differences" and "We build globally, we live locally."
And every time the new CEO appeared in public,
he used the same catchphrase "We do the right thing."
Today, Uber says the days of exploiting riots and
jumping into markets without a plan are over.
And when asked about the document leak,
Uber says,
So how should we judge the Uber of today?
Maybe the company really has turned over a new leaf.
But that aside, they're facing another huge problem.
Their long-term plan to turn a
profit needs to be completely reworked.
That's because Uber was banking on
replacing its drivers with self-driving cars.
Now, this might seem like a scifi fantasy,
but Uber was flush with cash and very,
very serious about cracking this nut.
They invested billions.
The idea was if they could
eliminate drivers, their profits would soar.
Now Uber was doing this, all the while
hiring new drivers and promising them pretty big money.
It's sort of like the guy who tells his dad
he's looking for a serious relationship, when really he's just
looking for one thing: someone to play Smash Bros. With.
Remember how a few years back, there was all
this talk about driverless cars, how we're almost there?
Well, here we are in 2022, and driverless cars
still haven't really pulled out of the driveway.
The tech has run into some
problems that engineers are working on.
As much as I want to see it happen,
it might be a while.
Ubers own project was involved in the first
known death caused by a self-driving car.
Believe it or not, this actually happened right outside
my old moving company office in Tempe, Arizona.
One of my workers was like, did you hear
about the self-driving car that hit a lady, like, right there?
It was weird.
And this is only the beginning of
the driverless debacle, because they later got
sued by Waymo over stolen trade secrets.
Waymo is a driverless car company
that's owned by Alphabet or Google.
In this long line of unfortunate events, one of
Waymo's engineers stole blueprints, set up his own self-driving
truck company, and sold that to Uber.
This cost Uber $245 million to
settle the lawsuit with Alphabet.
The whole idea crumbled, and Uber later sold its
driverless car division to a Silicon Valley startup.
The dream of a self-driving car fleet was over.
It turned out Uber would have
to depend on humans after all.
So now it's like the guy who breaks up with
his girlfriend but regrets it a few weeks later.
Like, hey, you know I was joking when
I said I found someone better, right?
But it turns out if you want to
get back together, it's going to cost you.
Am I right, fellas?
Remember how Uber managed to defeat the
taxi industry by making it cheap and
easy for drivers to come on board?
Well, now that process is running in reverse,
because it's also cheap and easy
for Uber drivers to bail on Uber.
If you were a classic taxi driver and you
spent serious money and time setting yourself up as
a licensed cabbie, you wouldn't just bail on it
in the first sign of trouble.
But if you're an Uber driver, especially part-time,
you'll leave the moment that you find something
else that doesn't puke in your back seat.
And that's what happened during the Pandemic.
Demand for Uber dropped like a rock.
So drivers went off to do other things.
Not to mention, driving strangers around during
a Pandemic seemed less than ideal.
And now we have inflation.
Car prices have soared.
So they're stuck in this weird kind of catch-22.
When there's fewer drivers on the road, the algorithm
ups the price, and that pushes some customers away.
Fewer customers means fewer people who want to drive.
So again, the price has to go up.
This gets on and on again in a vicious cycle.
Uber fares in the US
are up 45% in just a few years.
So if you've been waiting longer for an
Uber and paying more, this is why.
Now the big question, Does Uber have a fix for all this?
Sort of.
The company's diversifying.
It started with delivery services.
Uber Eats has been around since 2014.
But during the Pandemic, this was
a lifesaver for the company.
When lockdowns came, the ride
hailing business went poof.
Revenues dropped by two-thirds
and never fully recovered.
But with everyone stuck at home, Uber Eats exploded.
And in the two years since the Pandemic
began, its revenue has grown by 5X.
And delivery isn't the only
new business venture for Uber.
It's jumping into logistics with an app
that connects shippers with freight carriers.
Plus, there's something else.
What do you do if you're a digital company and
you need a quick way to make your product profitable?
You sell ads.
Uber launched in-app ads on Uber Eats and
is planning the same for its main app.
That's on top of sponsored listings
and selling physical billboard space.
Maybe they'll even decide to put screens in the back of
their vehicles and find clever ways to make us watch.
All this diversification is good news
for Uber and its investors.
But it still has to make it
through this epic stock price collapse.
Its shares have been falling steadily.
It's trading at half the price of its IPO.
Plus, in bear market, investors
typically avoid growth stocks.
These are businesses with a lot
of promise, but not much profit.
But still, Wall Street analysts haven't given up on it.
They've downgraded their outlook for
the company multiple times.
But their targets for Uber stock are still in the
$40 to $50 range, way higher than the current price.
So they see a major opportunity to buy.
But that's if you think analysts are right.
On the other hand, there are investors who question whether
Uber will even exist a few years from now.
The market's sort of in the middle on this.
Uber stock is trading about halfway
between analyst targets and zero.
What we do know in all this is that in order
to survive, Uber will have to get used to something that
it didn't have much of in its early days - competition.
Companies like Lyft and Ola have moved into Uber's
ride sharing business, and now it's competing with logistics
companies, giant multinational ad agencies, and many other delivery
services that are backed by big money.
So the days of Uber being the
only game in town are over.
And future Uber could be a
very different company from today's.
It's even possible it'll leave your city completely
after all this has happened before, and instead
be the company that delivers your new TV
or maybe just the billboard advertising it.
But if future Uber's more like this
and less like this,