What Makes Uber Run(fastcompany.com)
fastcompany.com
What Makes Uber Run
http://www.fastcompany.com/3050250/what-makes-uber-run/
72 comments
I guess this isn't the intended message, but whenever I read an article like this I'm happy to be nowhere near SV. I can see myself waking up after ten years realizing how I wasted my life on pretending that crude forms of desktop publishing and business intelligence is somehow the bleeding edge of technology.
What, you don't have all night jam sessions at your 3 bedroom house in San Fran? Just picking yourself up by your bootstraps, struggling to make it, in your 3 bedroom house in San Fran. You know, down in the much and the mire, busting out LoC tirelessly while worrying about how you're gonna keep the lights on, in your 3 bedroom house in San Fran...
This reminds me when I asked a person who is now a "worlds youngest self made billionaire" club member how they possibly built paid their bills while in the early phases of their startup, that time when you're too small to even consider funding, but big enough to warrant a couple hires to help lay a foundation. The reply, "Ha! [founder's name]'s family is loaded...".
That's when I realized I had worked on the underlying skills, I had ideas, but I missed the most important part... money and/or rich friends.
This reminds me when I asked a person who is now a "worlds youngest self made billionaire" club member how they possibly built paid their bills while in the early phases of their startup, that time when you're too small to even consider funding, but big enough to warrant a couple hires to help lay a foundation. The reply, "Ha! [founder's name]'s family is loaded...".
That's when I realized I had worked on the underlying skills, I had ideas, but I missed the most important part... money and/or rich friends.
This is true for many entrepreneurs. Evan Spiegel's dad is a rich lawyer, as is Mark Zuckerberg's and Bill Gates'
Travis doesn't fall in this category though. He got his 3 bedroom house with his own money
Travis doesn't fall in this category though. He got his 3 bedroom house with his own money
I believe Mark Zuckerberg's father is a dentist.
and his mom is a psychiatrist, so they're both "doctors"
http://www.businessinsider.com/mark-zuckerbergs-dentist-dad-...
Travis bought his house after selling RedSwoosh and being for 4 years without salary. He deserves every penny of it.
There are plenty of reasonably priced apartments outside of SF and Palo Alto. It means you might need to live in the east bay or somewhere less expensive south of the city but it's possible and maybe necessary in the early days.
That means first you have to get rich and then work on the skills
If only I'd known sooner, now I'm just over here with a bunch of computer and development knowledge... I should have just studied money.
It's a feasible strategy - there are thousands of entrepreneurs who did just that: do an MSc/PhD in Finance/Economics (or these days just any old STEM subject), join a bank's trading floor or a big investment company, put aside 2-3 million in 10-15 years - then get out of the rat race and create a start-up or become an angel investor.
Of course there's ten times more people who inherit a million or two of seed capital instead...
Of course there's ten times more people who inherit a million or two of seed capital instead...
"I should have just studied money."
People buy things which make their life better than it was before they bought the product or service. The magnitude is not important. You now know 'money', if you have the dev knowledge GO BUILD SOMETHING OF VALUE!
People buy things which make their life better than it was before they bought the product or service. The magnitude is not important. You now know 'money', if you have the dev knowledge GO BUILD SOMETHING OF VALUE!
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Startups aren't about "bleeding edge tech" though. Startups take ideas and technology and build innovative products that solve real problems. What those products are built on can be anything - it doesn't matter whether the tech was invented 5 minutes ago or 5 decades ago, if it solves the problem better than any current solution then that's a good thing, and that's what the startup should use.
I would much rather work on something with desktop publishing and business intelligence for 10 years and look back knowing I helped people solve an actual problem they had than look back knowing I worked on the shiniest new toy before anyone else.
I would much rather work on something with desktop publishing and business intelligence for 10 years and look back knowing I helped people solve an actual problem they had than look back knowing I worked on the shiniest new toy before anyone else.
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And then there's tech like getting rid of all the toll takers on the GG bridge. I honestly haven't crossed to bridge since the complete conversion. Partly, because I never found San Franciso that romantic, don't work in the city anymore, and part, because I don't want to wait for a bill in the mail.
Hay--GG bridge district members. I have a feeling you are missing out of a lot of toll form casual bridge users? Some of us would pay your tolls with our spare physical currency, and spend the day in that city--buying stuff?
yes--it's off topic, and I don't think a traditional startup had anything to do with the the elimination of toll takers.
I just hope technology solves real problems, and isn't used to make the rich richer, or only provides good tech jobs in good unusual economic boom times? I know right now I could live without 75% of this new technology. Kind of a weird confession--huh? And no--I'm not a Luddite? Well, I hope I'm not? I know, I do miss hanging out in Book stores? Starbucks doesn't cut it? And, I haven't been to a movie theater in years? And I honestly don't like meeting people over the Internet? I do like the immediacy of this tool though?
Hay--GG bridge district members. I have a feeling you are missing out of a lot of toll form casual bridge users? Some of us would pay your tolls with our spare physical currency, and spend the day in that city--buying stuff?
yes--it's off topic, and I don't think a traditional startup had anything to do with the the elimination of toll takers.
I just hope technology solves real problems, and isn't used to make the rich richer, or only provides good tech jobs in good unusual economic boom times? I know right now I could live without 75% of this new technology. Kind of a weird confession--huh? And no--I'm not a Luddite? Well, I hope I'm not? I know, I do miss hanging out in Book stores? Starbucks doesn't cut it? And, I haven't been to a movie theater in years? And I honestly don't like meeting people over the Internet? I do like the immediacy of this tool though?
Earnest question then: what do you see as the bleeding edge of technology? Where is that happening? What companies are doing it?
What a useless, devoid of content, self wanking article. I guess the Uber CEO write at least half of it.
> Uber—the first company since Google with a service so popular that its name is in regular use as both a noun and a verb
Skype?
Skype?
I think "tweet" should count. People say "Facebook me" too. I hear both more regularly than "uber," in fact I can't remember a anyone using it as a verb but that's just because an uber is something you get rather than do. I don't taxi over to your house either.
I don't taxi over to your house either.
Well, not unless their house is at the end of a runway :)
Well, not unless their house is at the end of a runway :)
I've heard 'taxiing over' many times as well as 'ubering'.
Instagram, Snapchat, Facetime, Tinder, WhatsApp
Facebook? Come on, people!
Never heard Uber in use as a verb before. Skype, a few times.
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Google?
I was part of the jampad era and slept there several nights and even tho the article mentioned good facts I think I will have to write some more interesting ones on a blog post. He also helped our startup many times and we closed our angel round at his house.
Travis deserves all the success.
Travis deserves all the success.
> Although Kalanick had been a startup guy since high school, he was a grinder, not a mogul. He had made enough on his last one, RedSwoosh, to buy a house and do a bit of angel investing.
Oh no big deal, only enough to have complete financial security at the age of 30.
Oh no big deal, only enough to have complete financial security at the age of 30.
Did you read the article? He nearly didn't manage to grow RedSwoosh and then sell it.
No defense for him or Uber - I'm not a customer and have no plans to be one.
No defense for him or Uber - I'm not a customer and have no plans to be one.
I did read the article. I find it incredible how it pays absolutely no attention to the fact that he became a millionaire through RedSwoosh and how this allowed him to invest in your startup and "show up at your office one or two days a week" if he felt like it.
My issue isn't with him specifically, more the sense of entitlement of the industry and the press.
> Kalanick came away from the experience with a profound sense of relief and also a bit of a problem with authority
...and a huge amount of money. For most people in the developed world, buying a home and having enough money left over to even think about angel investing (or other expensive pastimes) at a young age is an absolute dream.
Many people see personal wealth as a pre-requisite for being able to found a startup. A little more focus on this side of a founder's story would be welcome.
My issue isn't with him specifically, more the sense of entitlement of the industry and the press.
> Kalanick came away from the experience with a profound sense of relief and also a bit of a problem with authority
...and a huge amount of money. For most people in the developed world, buying a home and having enough money left over to even think about angel investing (or other expensive pastimes) at a young age is an absolute dream.
Many people see personal wealth as a pre-requisite for being able to found a startup. A little more focus on this side of a founder's story would be welcome.
I love how you start to story in the middle, as if he were rich since birth.
How do you think he earned his first(keyword) millions in the first place? Not through inheritance.
His first startup didn't really get anywhere, he was living at his parents house for the most of it. He dropped out of university for it.
His second startup got somewhere.
His third one became Uber.
Still for the first decade for his working life, he was less wealthy than the typical software engineer. He had the advantage of having his parents house to live at and a middle class upbringing, but millions of kids have that in the USA today.
Also a 3 bedroom house was probably way more affordable when he purchased it. In the SFBA the unaffordability really only started several years ago, not counting the general real estate bubble.
His second startup got somewhere.
His third one became Uber.
Still for the first decade for his working life, he was less wealthy than the typical software engineer. He had the advantage of having his parents house to live at and a middle class upbringing, but millions of kids have that in the USA today.
Also a 3 bedroom house was probably way more affordable when he purchased it. In the SFBA the unaffordability really only started several years ago, not counting the general real estate bubble.
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Missed an opportunity for a good pun. "What drives Uber."
And did so in favour of a forced one - I think the title is meant to reference the whole track runner thing.
...venture capital?
and ignoring local laws?
When local laws are outdated and don't serve the interests of the population, do they really deserve to be followed?
People have voted with their wallets - they'd rather take an Uber than an outdated taxi with bad customer service.
People have voted with their wallets - they'd rather take an Uber than an outdated taxi with bad customer service.
>People have voted with their wallets
Uber is clearly a better service than your average taxi experience. But we also don't know the true price, since most drivers are skirting insurance requirements and the like.
It is difficult for me to imagine how a service like taxis can integrate a middle man like Uber, which everyone assumes will be massively profitable, compensate the drivers fairly and be cheaper than the current system. The math doesn't add up.
Uber is clearly a better service than your average taxi experience. But we also don't know the true price, since most drivers are skirting insurance requirements and the like.
It is difficult for me to imagine how a service like taxis can integrate a middle man like Uber, which everyone assumes will be massively profitable, compensate the drivers fairly and be cheaper than the current system. The math doesn't add up.
The math tells me that Uber can operate at a volume no transport company in the world can even dream of. With such high volumes, it can afford to have lower margins.
>Uber can operate at a volume no transport company in the world can even dream of.
Pure hubris. Do you really think companies like DHL, which operates a logistics network in 220 countries, can't "dream of" the scale at which Uber is operating?
Pure hubris. Do you really think companies like DHL, which operates a logistics network in 220 countries, can't "dream of" the scale at which Uber is operating?
I think it's fairly obvious that puranjay was talking about transport of humans.
Sure it does. Current taxi system is screwing everybody. Break their monopoly with competition, and fairer prices result. Only traditional taxi drivers suffer, if they don't join the new competitive system.
Anecdote: every taxi driver I've met in Dublin has Uber.
>Current taxi system is screwing everybody.
This implies that there are some taxi companies out there that are worth a massive amount of money, since they are capturing all the profit. Can you point to a single company worth even one tenth of what Uber is worth? I'm sure some companies do very well, but I don't think there are any taxi billionaires out there.
But it matters little anyway. The pie is divvied up so many ways. You pay the fare, some goes to the driver, some goes to the middle man. When you pay a smaller fare, there is less for the driver, middle man, or both.
How much of Uber's valuation is based on that pie (the number of people desiring taxis) growing?
This implies that there are some taxi companies out there that are worth a massive amount of money, since they are capturing all the profit. Can you point to a single company worth even one tenth of what Uber is worth? I'm sure some companies do very well, but I don't think there are any taxi billionaires out there.
But it matters little anyway. The pie is divvied up so many ways. You pay the fare, some goes to the driver, some goes to the middle man. When you pay a smaller fare, there is less for the driver, middle man, or both.
How much of Uber's valuation is based on that pie (the number of people desiring taxis) growing?
Lots of ways to get screwed. Underserved population/demographic. Unreliable cars. Bad experiences. Taxes and fees double the overhead. Astronomical Medallion costs benefit only the banks (interest on million-dollar loans). And so on.
> Can you point to a single company worth even one tenth of what Uber is worth?
That's simply because taxi companies are regional and Uber is global.
Taxi companies rent out the car and medallion so drivers are $100 in the hole before they've even started work. It's practically indentured servitude.
That's simply because taxi companies are regional and Uber is global.
Taxi companies rent out the car and medallion so drivers are $100 in the hole before they've even started work. It's practically indentured servitude.
Can you point to a single company worth even one tenth of what Uber is worth?
This is a misleading way of looking at things. Uber serves many more markets than taxi companies, so they can be much bigger while being more efficient per ride.
This is a misleading way of looking at things. Uber serves many more markets than taxi companies, so they can be much bigger while being more efficient per ride.
When local laws are outdated, then it is time to have a discussion in the political arena about those laws.
Uber isn't doing anything like civil disobedience here, they're just making a new quick buck violating employment laws.
Aaand, in cases like this, it's always useful to ask: the laws we're breaking, who are they intended to benefit or protect? People without a lot of economic or political power to begin with? Yeah, maybe we should leave those laws alone--by definition, the people we're hurting are the ones least able to do anything about it anyway.
Uber isn't doing anything like civil disobedience here, they're just making a new quick buck violating employment laws.
Aaand, in cases like this, it's always useful to ask: the laws we're breaking, who are they intended to benefit or protect? People without a lot of economic or political power to begin with? Yeah, maybe we should leave those laws alone--by definition, the people we're hurting are the ones least able to do anything about it anyway.
>Uber isn't doing anything like civil disobedience here, they're just making a new quick buck violating employment laws.
False. Uber is losing hundreds of millions of dollars.
>Aaand, in cases like this, it's always useful to ask: the laws we're breaking, who are they intended to benefit or protect? People without a lot of economic or political power to begin with? Yeah, maybe we should leave those laws alone--by definition, the people we're hurting are the ones least able to do anything about it anyway.
Intentions are irrelevant. It's end results that matter. People vote with their wallets. There is only one reason why Uber has created $51bn of market value, many people find it superior to the alternatives they have at their disposal. Uber _helps_ those with low economic or political power, more transportation options at a cheaper price.
False. Uber is losing hundreds of millions of dollars.
>Aaand, in cases like this, it's always useful to ask: the laws we're breaking, who are they intended to benefit or protect? People without a lot of economic or political power to begin with? Yeah, maybe we should leave those laws alone--by definition, the people we're hurting are the ones least able to do anything about it anyway.
Intentions are irrelevant. It's end results that matter. People vote with their wallets. There is only one reason why Uber has created $51bn of market value, many people find it superior to the alternatives they have at their disposal. Uber _helps_ those with low economic or political power, more transportation options at a cheaper price.
People vote with their votes, and buy things with their wallets. Voting isn't merely a synonym for choosing, it's an act of political engagement. I don't "vote" for Tide-brand soap when I buy it, because buying consumer goods isn't (usually) a political act.
Also, Uber doesn't help people with low economic or political power. Those people still have feature phones and walk or take the bus.
Also, Uber doesn't help people with low economic or political power. Those people still have feature phones and walk or take the bus.
Any action that has a social effect is a political act, and buying consumer goods is no exception.
> Uber is losing hundreds of millions of dollars.
Isn't it actually spending hundreds of millions of VC dollars building a global monopoly?
As the article described, this is a network effects platform that gets better as it grows. This also gives them the ability to offer a better product at a lower price, squeezing out competitors.
The thing that amazes me the most about Uber is the flagrant disregard of local laws, and the lack of repercussions.
Isn't it actually spending hundreds of millions of VC dollars building a global monopoly?
As the article described, this is a network effects platform that gets better as it grows. This also gives them the ability to offer a better product at a lower price, squeezing out competitors.
The thing that amazes me the most about Uber is the flagrant disregard of local laws, and the lack of repercussions.
> The thing that amazes me the most about Uber is the flagrant disregard of local laws, and the lack of repercussions.
Uber is using / exploiting the regulator's method of enforcement, which tends to be persuading people to comply with the law and taking them to cour as a matter of last resort or for flagrant breaches.
We see this with companies who avoid (but not evade) taxes - the tax authorities tighten the rules, arrange for a partial payback, and continue scrutiny.
Sometimes this makes sense. Court cases are expensive and not guaranteed. At least this way some of the money is gathered.
But it does leave space for companies like Uber to operate in grey areas of law that's written in statute and the way the courts have interpreted it and the way the regulators enforce it.
The insurance is most worrying.
Uber is using / exploiting the regulator's method of enforcement, which tends to be persuading people to comply with the law and taking them to cour as a matter of last resort or for flagrant breaches.
We see this with companies who avoid (but not evade) taxes - the tax authorities tighten the rules, arrange for a partial payback, and continue scrutiny.
Sometimes this makes sense. Court cases are expensive and not guaranteed. At least this way some of the money is gathered.
But it does leave space for companies like Uber to operate in grey areas of law that's written in statute and the way the courts have interpreted it and the way the regulators enforce it.
The insurance is most worrying.
>The thing that amazes me the most about Uber is the flagrant disregard of local laws, and the lack of repercussions.
Amazes me as well. The extent to which corruption was rampant all around the world in the same industry.
Amazes me as well. The extent to which corruption was rampant all around the world in the same industry.
>"Uber is losing hundreds of millions of dollars."
This has no effect on founders or early investors; they'll get rich anyway. This is Silicon Valley, where empires are built losing hundreds of millions of dollars.
This has no effect on founders or early investors; they'll get rich anyway. This is Silicon Valley, where empires are built losing hundreds of millions of dollars.
People have voted with their wallets
This is an aspect of several of these startups that amazes me: So many times I've had discussions with peers about possible business ideas, and we get mired in the realities of legislation and compliance (it's very easy to get caught up in the nuances of every customer agreement, disclosure form, etc, to ensure the most edge of conditions don't end up in a business-destroying lawsuit), the vision abandoned because of those risks and legal complexities.
Companies like Uber and AirBnB (and countless others) simply pretend that those complexities don't exist -- the market to be disrupted only because they're willing to completely circumvent laws and standards -- and money starts falling on their heads.
Companies like Uber and AirBnB (and countless others) simply pretend that those complexities don't exist -- the market to be disrupted only because they're willing to completely circumvent laws and standards -- and money starts falling on their heads.
>Companies like Uber and AirBnB (and countless others) simply pretend that those complexities don't exist -- the market to be disrupted only because they're willing to completely circumvent laws and standards -- and money starts falling on their heads.
This is entirely false. Uber's legal and political staff is _huge_. I'd assume the same for Airbnb.
No one is "pretending" they don't exist. They're building a product, allowing consumers to use better alternatives and challenging local authorities on their backwards ways.
Stop talking and start doing.
This is entirely false. Uber's legal and political staff is _huge_. I'd assume the same for Airbnb.
No one is "pretending" they don't exist. They're building a product, allowing consumers to use better alternatives and challenging local authorities on their backwards ways.
Stop talking and start doing.
Yes, both have large legal and political staff now. They entered markets and gained a foothold by completely ignoring established law and regulations. There is nothing, whatsoever, false about what I claimed, and your comment is extraordinarily silly.
allowing consumers to use better alternatives and challenging local authorities on their backwards ways
This is a profoundly naive way of viewing what they're doing.
allowing consumers to use better alternatives and challenging local authorities on their backwards ways
This is a profoundly naive way of viewing what they're doing.
>This is a profoundly naive way of viewing what they're doing.
Please, explain.
>They entered markets and gained a foothold
By providing a better product at a better price.
Please, explain.
>They entered markets and gained a foothold
By providing a better product at a better price.
By completely ignoring existing rules and regulations that restrict everyone else from providing a "better product at a better price". In virtually every market you can conceive scenarioes where a startup can provide a "better product at a better price" simply by ignoring all of the extra costs and limitations that constrain the existing players, usually at the behest of the government. As much as everyone holds Uber and AirBnB as disrupting cab and hotel businesses, they're really disrupting the cab regulation and hotel regulation businesses, without much consideration to the real impact.
People like eating at the park. There are no current food options there. I can "disrupt" the park food business by wheeling my bbq down there and selling burgers (ignore the countless food safety, tax and regulatory issues, or the zoning/garbage/park use policies that led to the park not having food options). Disruption!
EDIT: Actually, why bother having the capital costs of BBQs, fuel logistics and safety liability, etc. Instead I'll just make an app ("Ubbq") and allow providers to register as park hamburger sellers, taking my skim off the top. Disruption!
People like eating at the park. There are no current food options there. I can "disrupt" the park food business by wheeling my bbq down there and selling burgers (ignore the countless food safety, tax and regulatory issues, or the zoning/garbage/park use policies that led to the park not having food options). Disruption!
EDIT: Actually, why bother having the capital costs of BBQs, fuel logistics and safety liability, etc. Instead I'll just make an app ("Ubbq") and allow providers to register as park hamburger sellers, taking my skim off the top. Disruption!
The article implies that its the people, and thats partway true. For customers - its mostly a review system. Uber destroyed its competition with 2 simple use cases - the ability to rate your driver, and for the driver - the ability to rate their passenger.
> Uber destroyed its competition with 2 simple use cases - the ability to rate your driver, and for the driver - the ability to rate their passenger.
If that's all their moat is, they don't have much of a moat.
If that's all their moat is, they don't have much of a moat.
yay they mentioned my name in the article
> [Travis Kalanick] wore a cowboy hat and referred to himself as the Wolf, after the cold-blooded, coolly rational fixer played by Harvey Keitel in Pulp Fiction.
It's generally a bad sign when you meet an actual human being who refers to himself as "The Wolf."
It's generally a bad sign when you meet an actual human being who refers to himself as "The Wolf."
especially when it's a 'cooly rational fixer' who does such smart things as discussing murder over a portable phone, speeding to the site of a crime he needs to help cleanup, and leading the two idiot assassins involved in the crime to his dumping place for bodies and introducing them to the future owner of the site.
Thankfully he wasn't being literal.
Yeah that part was particularly cringeworthy.
Hopefully he's not also thinking of this guy: https://en.wikipedia.org/wiki/The_Sea-Wolf#Wolf_Larsen
(great book btw)
(great book btw)
It may happen when you eat your own dogfood long enough.