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Let's talk about Uber.
Uber is part of the new "sharing economy"
that lets people with their own vehicles
pick up consumers within minutes
and take them from point A to point B.
The buzzy bay area startup
has raised 1.6 billion dollars in just 4 years.
and is valued at an eye-popping 18.2 billion dollars
Uber is 204 cities,
across 45 countries,
and covers 55 percent of the U.S. population.
Imagine a world with less pollution.
No traffic jams.
And maybe you don't even have to own a car,
because your next ride is just a tap away.
No more scrubs! Hanging out of the passenger-side
of your best-friend's ride.
Uber!
This is the vision that Uber is peddling
and venture capitalists are fully on-board!
Uber's recent valuation,
makes them more valuable
Hertz,
Avis,
or United Airlines.
Uber managed to raise 1.2 billion dollars
from investors by Friday
and the company's CEO, Travis Kalanick, expects to get an additional 200 million dollars.
That's all thanks to the company's incredible valuation.
Investors estimate that Uber is worth
a whomping 17 billion dollars!
Add everything up
and Uber is now worth 18.2 billion dollars.
As the Wall-Street journal points out,
only Facebook managed to get a higher valuation from investors as a private company.
Also, Uber is now worth about as much as competitors
Hertz and Avis combined.
On paper,
Uber looks like a startup that wants to disrupt the 11 billion dollar taxi industry,
but what if I told you,
Uber's business model was more sinister than that.
The reason Uber can double revenue every 6 months
and close round after round of funding
is because they have found a way
to sidestep the costly regulations
that are required of cab companies.
Uber plays by a totally different set of rules.
Their game plan is to effectively ignore
whatever legal challenges
may eventually be thrown at them
in a quest to get big and drive their competition out of the game.
Uber is playing a game of Risk.
Their carefully, calculated missions
are putting them on a course for total domination.
Mission #1: Build a Fan Base
Position yourself as a classy, but cheap startup
and people will use the word "Uber" as a verb
and tweet their love.
Hashtag: #loveuber
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Mission #2: We Need Small Business
Uber is the new face of entrepreneurship and small business in America.
Uber CEO Travis Kalanick
said that drivers in New York make over 90 grand a year
and drivers in San Francisco make over 70 grand.
The San Francisco Cab Drivers Association
reported that 1/3 of the 8,500 cab drivers
in San Francisco have ditched driving a registered cab
in the last 12 months to drive for Uber instead.
Watch this video and try to resist starting your own business.
My name is Saahn,
My name is Meir
My name is Gehrat
My name is Bolivender-Singh
My name is Juan and I'm an Uber partner.
Yellow taxi is very difficult for me.
The effort, the energy, the hassle.
Sitting in the car like for 12 hour, 10 hour.
The amount of time that you put in.
I don't want that anymore.
It's significant comparing to Uber.
I'm never going back to the Yellow taxi.
I wouldn't be living the life I'm living right now if it wasn't for Uber.
You make more money, you're not hustling for the money.
You go online, you got paid like this. 1, 2, 3.
Slow, just patient.
When I want to work I can do it.
Being a part of Uber,
you move from the bottom of the ladder to the top of the ladder in no time.
It's like my own business.
Easy.
Convenient.
And everybody likes.
Mission #3: The Bait and Switch
Uber operates more like a pimp, than a boss.
By calling themselves a "Tech" company
instead of a transportation company,
they are able to call drivers: "Independent Contractors"
and they don't have to guarantee wages or pay health insurance.
Drivers receive star ratings from passengers.
And drivers that fall below 4.4 stars
can be deactivated by Uber.
If me and my girls get drunk
and I wanna cramp 6 of us in a Prius
but the driver rightfully says no,
I can be like, "Ew! One Star!"
Also, drivers don't receive tips.
A highlight of Uber's seamless payment system,
meant that no money is transferred between rider and driver.
That's great! But there's no tip.
By Uber's own estimates
20,000 new drivers sign up for the service each month.
Lured by high signing bonuses and hourly guarantees
but what happens to drivers when Uber goes back on its word?
More than 50 L.A.-based Uber drivers gathering in this North Hollywood parking lot tonight
voiced their displeasure with continued rate cuts by the popular ride sharing app.
None of us have anything against the app.
Aya Valilar has been an Uber driver for a year and a half
but says her take home pay continues to drop.
I've experienced 4 cuts...
...since I started.
It was $2.50 a mile when I started, a year and a half ago
and now we're at a $1.10 a mile.
You can't make a living off of that.
Okay, the best part of all of this,
One of the drivers featured in the video
is now one of more than 1,000 drivers
who've been protesting the company's policies.
Drivers surveyed across the nation
say they're making from about $5 dollars an hour
to $20 dollars an hour.
Meaning if they're working 40-hour weeks,
that's between 10 to 40 grand a year.
Their fares, of which Uber gets 20 to 25 percent,
must also go to:
Gas,
Tolls,
Car Washes,
Wear and tear,
Maintenance,
and Insurance.
Which brings us to
Mission #4: Regulations are for Suckas
In April, Uber rolled out a $1 dollar, "safe-ride" fee.
So after years of operation, Uber has decided to pass the cost of safely running a business onto the consumer.
Here's what Uber says the $1 "safe-ride" fee pays for:
Background checks,
Vehicle checks,
Driver safety education, and
development of "safety" features in the app.
So you're favorite Chinese Food company is going to start charging a...
..."safe-food" fee.
Give me $1 dollar and I make sure there's no rat poop in your egg roll.
So just how air-tight are these background checks?
"I have a 3-page rap sheet"
Reformed California criminal,
Beverly Locke, agreed to help us test the system.
Uber says it does not hire anyone with severe driving violations
or convictions in the last 7 years for violent crimes,
felonies, sexual offenses, drugs, or DUIs.
Locke has priors in California for burglary, drugs, and assault.
And she's still on probation.
Yet, after she filled out Uber's online application
this ex-con, was hired to be a driver.
I would pick somebody up take them to the airport
and my second thought would be to go back to that house, see what's in there.
The Taxi, Limousine, and Para-Transit Association
claims that 30 to 40 percent of a traditional taxi's operation expenses
consists of regulatory costs.
Which Uber avoids.
Most Important: Primary Commercial Liability Insurance
Mission #5: Tricky Terms
Uber claims to carry a $1 million dollar umbrella policy
for instances of accidents with passengers in the car.
But,
drivers who are on the way to pick up passengers
or merely have the app open
may not be covered.
Also,
Uber claims
They're not liable for passenger injuries
based on the app's Terms of Service.
Ya'll should probs read that.
Probably the most eye-opening thing I learned
is that Uber ex-drivers, regular people, like you and me
who use their own cars and have personal motor vehicle policies
are specifically excluded from instances of driving for profit.
Call your insurance company right now
and tell them you want to pick up strangers.
For money.
Let me know how that goes.
Uber says,
"We have nothing to do with them."
"We're just an app."
"We do not...
...hire these drivers."
"They're independent contractors."
"We do not control them."
So, basically what people don't know is that, if you get hurt by one of these cars
Uber's gonna go: "Not me!"
"Got nothing to do with me."
Your private automobile insurance...
...coverage will say, "Look, this is a commercial trip...
...we're not covering it."
Lyft.
Uber.
Will say...
"Look, the app was not on, we're not covering it."
Standard, private passenger auto policy specifically excludes
you know, coverage for any kind of injury or damage
that arises out of an accident while a driver is holding themselves out for hire.
Either drivers aren't aware of that, 'cause they haven't read their policy
or they're aware of that and they're just hoping for the best.
Think "Bait & Switch Hiring", "Dodging Liability", and "Unstable Wages" are bad?
Meet...
Mission #6: Subprime Sweet Spot
Uber has now decided to dip their toes into the sub-prime loan market.
YAY!
Uber's financing program connects drivers with poor credit to auto lenders promising better rates.
The startup wants more drivers with nicer cars
so drivers are urged to take out loans
with the promise that car payments
can be deducted from their Uber earnings.
Risk?
"Ah! You're gonna book 6-figures this year! No problem!"
Welcome the Uber Financing Platform!
Drivers are the engine of the Uber network.
Without you, we just wouldn't get anywhere.
That's why we're making it easier than ever to drive your own vehicle.
And be you're own boss.
With Uber's preferred financing program
you can buy or lease a car for as low as $20 dollars per day.
Even if you've been turned down for a loan before.
Even if you have bad credit or no credit at all.
We can help you get behind the wheel in a week.
Two of the companies Uber has partnered with
are now under investigation by the Justice Department for Sub-Prime lending.
Uber is operating like quite the "Car- Tel"!
Mission #7: Eliminate the Competition
Uber's at war with rival startup Lyft.
Uber's aggressive tactics reflect the fact that ride-sharing
is a Zero-Sum game.
A driver picking up an Uber customer
can't also pick up a Lyft customer
Drivers can drive for both services,
though companies discourage the practice.
Plus, once Uber infiltrates and transfers drivers from one platform to theirs
the request rate for that service declines.
According from a report by CNN,
Car service competitor, Lyft,
claims that Uber ordered and cancelled thousands of Lyft rides
in an attempt to blow past the competition.
The outlet says, according to data provided to it by Lyft,
nearly 200 Uber employees have made & then cancelled more than 5,560 reservation since October 2013.
Not only did Uber cancel thousands of rides
but they devised: Operation Slog
Best. Name. Ever.
Where Uber contractors, strike up conversations with Lyft drivers
and attempt to sign them up before they arrive at their destination.
Have I told you about our Lord & Savior, Uber?
Contractors earned up to $750 dollars in commissions!
For successfully recruiting a new driver to Uber.
Uber may only be 4 years old,
but they're getting better and better at doing backroom political deals
to get their service into big cities.
You guys are almost launching a "political" campaign.
Well, look... um, you know, we really started out as, you know, you see with a lot of startups sort of,
a bunch of techie kids, sort of, trying to make something really interesting happen
We have to tell our story and persuade
politicians and city officials about why our story's important.
Mission #8: Wheelin' & Dealin'
Illinois wanted to pass new ride sharing legislation,
with provisions that would prohibit drivers from working more than 10 hours a day,
cap-serge pricing,
and require drivers to obtain a chauffeur's license.
Uber lobbyist were like,"Uh.. [chuckle], looky here, uh..."
"...you make this go away and we'll build out the Chicago office."
That's not gonna work!... Wait, what?!
Governor Quinn vetoed the bill!
A few weeks later, Uber announces it's adding 420 jobs by the end of 2016.
And they pimp walk away from the rules.
The New York attorney general, just announced, he was dropping all regulations
in the state of New York
after Uber hired the former Head of New York's Taxi and Limo Commission.
So in a pro-disruption argument
There's no need for any public transportation laws!
Hotel laws!
Or food safety laws!
Because the market will quickly move to drive out bad actors
Free Markets are good!
Regulation is bad!
Here's how we fix everything.
Number One.
Believe it or not, I'm not gonna get all Regina-Regulation on you!
But, I think there should be some sort of hybrid insurance policy.
That would cover drivers for both the personal use of their vehicle
and their transportation work.
As rider numbers increase,
the amount of drivers increases.
And their are bound to be more accidents.
Number Two.
Uber should introduce the ability to tip the driver within the app.
For years, consumers have thought that Uber's seamless payment process
meant tips were included!
But they're not!
Drivers are struggling to make ends meet.
And consumers are benefiting from cheaper rides.
In-app payments, would help out everyone.
An informed consumer, is a powerful consumer.
Uber is like that hot chick that everyone wants to get with
but as you dig deeper, you find out more and more unsavory things about her.
Am I saying you shouldn't get in bed with her?
Well, that's up to you. But maybe you double bag it.
Free Markets allows companies like Uber to grow
and steal with lightning speed.
But public safety shouldn't be sacrificed
on the altar of capitalism.
We should all decide how we want companies to treat employees,
municipalities,
and competitors.
And THEN decide if we want to get taken for a ride.
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