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Who said a taxi startup couldn’t go toe-to-toe with the big boys of Silicon Valley?
However now the tech giant has given way to Uber that ubiquitous green taxi sticker you see driving down narrow, eight-lane roads here in the US as the Uber or Lyft app or the SnapTaxi app sends you to pick up a passenger. They all ring the alarm when you’ve got a passenger and can’t find an Uber or Lyft to take you to the destination, requiring you to hail a cab instead.
Uber survives the spying scandal. Their careers didn’t.
Uber had one thing on its side: a seemingly simple business proposition of a ride-hailing app that made it fast and convenient for people to get around town, cheaper than taxi and a headache to track your rides afterwards.
But not everybody can do that.
That’s the fundamental problem with the so-called sharing economy — there are plenty of ways it allows things to move, but lots of ways it doesn’t. Many of these companies have since pivoted their original mission of making us all more productive and efficient to a new look at, for instance, how it’s economically feasible to own a second vehicle instead of taking the train.
And the problems with the sharing economy show no signs of easing up anytime soon.
Uber and Lyft were “very easy to game”
When Uber and Lyft co-founder Travis Kalanick was ousted, his replacement as CEO Dara Khosrowshahi was able to get an early business lesson out of the deal.
“I think one of the takeaways we had at Uber as the parent company is the fact that Uber and Lyft were very easy to game,” he told Forbes in an interview published last month. “In the sense that they worked on their app. Their drivers came in one by one. But then Uber and Lyft became, when people were actually at home, what went on on all of the ride-sharing services, which was a lot of collaboration and code swapping.”
Uber and Lyft shared Uber-branded plumbing so deeply that Lyft drivers — who also had an app downloaded from the Uber site — could tap their friends to send them rides, Khosrowshahi said. Uber, meanwhile, incorporated Lyft driver sign-ups, which meant Lyft employees could easily get employees rides, too. The result was that all Lyft drivers could cancel rides on Uber’s app whenever they wanted.
Khosrowshahi also admitted that Uber allowed BuzzFeed reporter Hunter Walker’s hacked riders’ information to remain in Uber’s system for months. But he said Uber’s liability was limited by a policy of only selling rider data if it was sought after, and he said the company would have fired anyone suspected of violating its anti-hack policy.
Khosrowshahi said that Uber’s current policy is “to never do it again,” but he admitted that it took too long to institute new safeguards.
Under Khosrowshahi, Uber has started rolling out an interim anti-hacking policy as well.
Safety is Uber’s “major focus”
Uber was also slow to respond to one of the biggest scandals in its history. The company finally fired 20 employees for “serious violations of our standards,” including one for improperly sharing troves of customer data.
It took Travis Kalanick at least two years, however, before he finally acknowledged the issue.
“The time has come to be honest with people about the facts. Over the last two years, Uber has made a number of critical changes to our culture and leadership team. These included on-boarding a strong team of new senior leaders, a values-driven operational review, and board-led changes to our global work environment,” he said in a statement at the time.
Khosrowshahi took Uber public in February this year, and Uber’s stock has recovered to more than $47 a share, a 27 percent rise from its 2017 IPO price.
But the company’s share of the US market is only at around 29 percent, according to analysts at Macquarie Research.
Many of Uber’s major rivals have surpassed it. In the third quarter of 2018, American rival Lyft had a 15 percent market share compared with Uber’s 26 percent. That’s still a major surge from just the second quarter of 2017, when it trailed behind Uber by almost 30 percent.
And though industry insiders haven’t predicted an immediate end to Uber, the “turnaround” has long been predicted. “From all I’ve heard, and I don’t pretend to know everything, I think we’re going to see a really cool downshift in their performance in the very near future,” Chris Murano, co-founder of health insurance company Ten