With several million in his pocket and barely 30 years, Travis Kalanick was in full search of a new purpose. It has been a couple of years since his time at the University of California in Los Angeles (UCLA), where he studied computer engineering.
The most recent event in his life had been the sale of his company - the peer-to-peer Red Swoosh file sharing platform - to Akamai Technologies for $ 23 million. But just a few months later, he would come across his new mission.
At the same time, an engineer named Garret Camp, angry after spending $ 800 on a remise to travel on New Year's Eve, had set out to create a different private transportation service. His anger had not been in vain, since it resulted in the gestation of the UberCab project.
And this is where the two life stories come together: Kalanick heard Camp's story at a conference and immediately wanted to be part of his initiative, but as an investor. Why did he feel so attracted? Maybe for a similar experience. "I was in Paris with my partner and we couldn't find a taxi. At that time we wanted to push a button and have someone come and take us. It's that simple," recalls the now former CEO.
The venture had its official launch in San Francisco, in June 2010. Although it was not the original idea, Kalanick put aside his role as a mere financier to assume a more important role: the CEO of the incipient company, which was forged his personality in his image and likeness.
So much so that shortly after he closed his first capital injection with an outlay of $ 1.25 million, led by the First Round Capital fund and Shawn Faning, founder of Napster, among others. In 2011, he got $ 11 million and another $ 32 million invested by Menlo Ventures, Jeff Bezos and Goldman Sachs.
His business model grew and extended to New York and later to France, India and China. The UberX service, known at that time as its low cost version (now the most used), just emerged in mid-2012. At the same rate it was expanding, it also diversified its portfolio.
The ridesharing unit with private cars added:
- UberRush bike rental
- Premium UberChopper helicopter trips
- The delivery of food at home through the UberEats app
- New services like UberPool, to share transport with another user
Its growth was such that more and more companies were interested in its proposal, as was the case of the Chinese Baidu, which disbursed a whopping $ 600 million to integrate with its search engine. And Toyota, which bet $ 500 million to carry out joint autonomous driving developments.
The Japanese holding company SoftBank appeared on the radar in early 2018 and then became the main shareholder. The 1,000 million trips arrived in early 2016 and a semester had already doubled that figure. In addition to corporations, investors were also interested.
The great blow was given by the Public Investment Fund of Saudi Arabia that bet a little more than US $ 3,500 million. But (there is almost always a but) something did not go as expected.
Numbers that (still) do not close
Currently, the company has 100 million active users per month. Buenos Aires is the fifth city in the world in terms of trips made through its app.
However, the main pending issue of the platform is, nothing more and nothing less, than the economic one: Uber still does not earn money, and has sustained its growth based on subsidies either:
- To encourage users to use their application
- To add drivers from the non-commission charge
- To resist in countries where you have difficulties to invoice legally
It is true that 75% of its income comes from the transport business, but it is also true that its growth has been slowing down: in 2018, according to figures revealed by the company itself, it lost US $ 1.8 billion; a year earlier he had registered an even greater red: US $ 2.2 billion.
Kalanick says that failure is a matter of perspective: "In Uber we have this culture that we call the mentality of champions. It doesn't always mean winning. It's about putting everything you have on the field, to the last drop of passion and energy. And if one is knocked down, adversity must be overcome. "
Knowing quasi founders and owners of the development of the collaborative economy, the company prefers to apologize to ask permission. And although several times it went well, on other occasions it resulted in multi-million dollar battles lost in some markets.
His business in China never managed to start, despite allocating billions to boost it. He finally gave up the battle and merged with Didi in 2016. Something similar happened in Southeast Asia, where it was left to Grab. Or in Russia, where it merged with Yandex.
Dark side
The amount of conflicts and controversies that the company faced (and faces) is directly proportional to the level of disruption it caused in the industry.
Taxi guilds around the world say they compete unfairly because, in many cities, their business is not regulated, coupled with the costs saved by not considering their empleados driver-partners ’as employees.
The first conflicts began in 2012, by users who complained about the excessive increase in rates during times of high demand. A year later, some 35,000 drivers gathered to denounce their model of (not) hiring. Then more protests were heard in France, London and Buenos Aires.
From there, the problems would multiply. Waymo, the Alphabet company (parent company of Google) dedicated to the development of autonomous vehicles, reported that Uber had stolen information. This case was resolved with an arrangement in favor of the complainant, who kept $ 245 million in platform titles.
And in February the two drops that would spill the glass would arrive.
- First, a former company engineer, Susan Fowler, undressed through her personal blog the organizational chaos and sexist culture (with allegations of harassment concealed by Human Resources) that were lived in corporate offices. "It was a furious political war between managers," he said. His sayings resulted in an internal investigation that led to dozens of dismissals.
- Soon, Kalanick, who had already been news for having joked with the possibility of creating a platform that allowed men to have 'women on demand', starred in a viral video in which he was seen discussing and insulting a driver from Uber. The driver complained about the low service fees and the businessman replied: "You know what? Some people don't like to take responsibility for their own shit. They blame someone else for everything that happens in their lives. Good luck!".
The (then) Uber CEO apologized and said he felt ashamed, remarking that he had to change as a leader. Meanwhile, social networks criticized him mercilessly. Strictly speaking, his personality problems came from before.
In 2014 he asked that critical journalists be spied on with the service of his app: said and done, the engineers designed a tool to monitor their usual paths and those that were not so much ... And they baptized their creation with the name "God mode" , because it allowed to look from an elevated position thanks to its Uber profile.
Months later, due to investor pressure, the executive director left his post and was replaced by former Expedia CEO Dara Khosrowshahi. The new head of is a mysterious man born in Iran and who emigrated with his family to the United States escaping from the Islamic Revolution.
Although few details of his personal life are known, what is known is that Khosrowshahi has one of the most extensive family networks working in the technology industry. Six of his relatives are successful entrepreneurs in Silicon Valley or senior executives linked to the technology sector.
His brother Kaveh is the director of Allen & Co., a boutique investment bank that has links with technology elites such as the leaders of Facebook, Mark Zuckerberg, and Twitter, Jack Dorsey. His cousin Amir Khosrowshahi founded the artificial intelligence company Nervana, which was acquired by Intel in 2017.
His two cousins Ali and Hadi Partovi have been investors in many of the most successful Silicon Valley companies in recent decades such as Airbnb, Dropbox, Uber and Facebook. And two other family members are senior Google executives.
Time to step on the gas?
2019 was raised as the beginning of a new stage for Uber. Its debut in the New York Stock Exchange and the launch of its platform to connect companies and workers looking for temporary jobs, UberWork, appeared on the radar as the first steps for its evolution towards a technology firm to stop being a transport app.
However, not everything went as planned. After a long expectation, the company made its public offer in May at US $ 45 per share (market capitalization of US $ 75,500 million). But his campaign failed to convince investors and by the end of the day their titles had collapsed.
From that moment, the papers depreciated more than 30% and today their value in the Stock Exchange is of US $ 51,000 million. Moreover, they estimate that after this unsatisfactory experience, added to the failed WeWork public offering, SoftBank suffered a "writedown" of more than US $ 5,000 million.
It all ends where it starts. He received his last punch right in the State where he began his adventure: California. In September, local legislators approved a project that aims to regulate the employment status of those workers who are part of the "gig economy".
This law, which will take effect in January 2020, requires companies to carry out the ABC Test. That is, a questionnaire that determines whether its employees are autonomous or not, which could completely modify Uber's business.
His future, tied to legal conflicts and income that do not quite convince investors, is wrapped in a blanket of doubt. Will the most famous startup of the 21st century succeed or will it perish in the face of a business that it knew how to invent but that until now failed to take to its destination?
Kalanick awaits a happy ending. In his own words, "having a mentality of champions does not always mean winning." The problem is that the hundreds of investors who bet billions of dollars do not think the same.
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