Uber CEO Travis Kalanick is getting incredibly rich — at least on paper.
But he wants to get even richer. Uber is seeking an additional $US1 billion investment, beyond a big infusion it received as recently as June.
“[T]he car-booking company’s co-founder and chief executive officer, is seeking a higher valuation than the $US17 billion Uber got,” during its last raise, Bloomberg’s
Ever since I moved back to New York from Los Angeles several months ago, I’ve become an avid Uber user. There’s no question in my mind that Kalanick and his team have created a great service. Business Insider has been diligent about investigating the issues that have arisen with the company’s business. But the bottom line for me is that I hope Uber sticks around — although I don’t want the traditional taxi industry to go away.
However, my extremely positive experiences with the company and Kalanick’s ideas about valuations are different stories.
It could be that Uber’s opponents aren’t as much a threat to its existence as are its goals for rapid expansion. It’s been noted that Uber’s game plan is to effectively ignore whatever legal challenges may eventually be thrown at it in a quest to get big fast and drive its competition out of the game. On the plus side, Uber has defined a need for an alternative to taxis and created a viable market for entrepreneurs who want to do likewise.
On the negative side, I wouldn’t want to be going up against Uber. Frankly, Kalanick seems almost like a businessman of the old school — he relishes a good fight and wants to win, all the time, every time.
That said, if Bloomberg’s reporting is accurate and Uber is chasing another billion in investment just a few months after taking $US1.2 billion, you have to wonder if this is sustainable.
Silicon Valley startups have taken a lot of money and satisfied investors in the past — just look at Facebook. But Facebook wasn’t under threat of legal action for its business model, nor was it facing organised protests from critics. Uber is a technology company, but it operates in the rough-and-tumble world of big cities, established unions, and the very competitive taxi/car service industry.
There’s another factor: the force of Uber’s disruption. A lot of tech companies call themselves “disruptive,” or say that they’re engaged in “disruptive innovation,” but what they really are is just plain innovative, in both a beneficial and creative sense.
They’re showing a different and better way of doing things, but at the same time they’re creating new platforms, new ways to connect — and are removing “friction” from mundane tasks, like paying bills or filing taxes.
Uber is doing some of that, too, but it’s also drastically re-inventing the way that an important aspect of urban mobility actually works.
The thing is, when you really and truly disrupt established industries, you make enemies. You take their business away, rather than demonstrating a benignly new and different way of doing something that can function alongside the old industry, or only invalidate the old industry in slow motion, giving everyone who can read the writing on the wall plenty of time to find something else to do.
There are other questions about Uber and its quest for cash. The implication of another billion in investment is that Uber is going to overcome its many challenges and pay off big time at some not-too-distant point. But that implies that all of Uber’s enemies are going to surrender en masse. To a degree, anyone putting money into Uber now is betting that the company will become so pervasive — monopolistic, even — that the opposition will decide that resistance is futile.
Would you take that bet?
Uber just goes to show you that real disruption is thrilling — but also kind of scary, for everyone involved.
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