Is Uber bleeding to death?

Who does not know Uber nowadays? The online transportation network company became the highest valued startup of all time in only 5 years. It was cheaper and more easy to use than using an old fashioned taxi company. By just using the app on your phone you could easily choose your desired location and the app would calculate the expected arriving time and transportation cost. But there are number of issues related to this very disrupting technology in the taxi business.

Video “Learn the Uber Basics”: https://www.youtube.com/watch?v=G8VjcZeuvmo

1. Legal issues
Uber was facing a lot of local legal issues. In the United states it was facing more than 70 lawsuits, in fact the company was losing 1.2 billion dollars in just 6 months just by facing lawsuits. The lawsuits vary from how the company vets its drivers and how it advertises. Because the company is worth more than 60 billion and has 11 billion in cash and it does not follow the rules of the traditional industry it makes it an attractive target for attackers.

2. Failed expansion
Uber made its way into more than 75 countries around the world but did not manage to take the Chinese market. In fact, it sold its business to Didi a Chinese transportation company claiming more 80 percent of the market. But it lost 2 billion in cash due to battling this Chinese company in just 2 years. The reason why it did not win this battle could be related to the different Chinese political structure and the different consumer tastes of Chinese consumers.

3. Investor Issues
Uber was losing credibility when major investors like David Krane from Google ventures were not provided by up-to-date information. It also disclosed a 3.5 billion investment by a Saudi Arabia’s public investment fund. In this country women are not allowed to drive because of fatwas, or religious edicts. And this Country told the U.S. earlier to sell their investments in U.S. assets because they had significant role in 9/11 according to declassified documents released by the U.S. Congress.

4. Drivers
Most of the losses Uber made in the past can be traced back to drivers’ subsidies. Uber’s plan is to fire the 1 million human drivers and replace them with driverless cars in the future. NuTonomy a startup in Singapore already launched an autonomous taxi service.

In my opinion, Uber is a very innovative company by combing a mobile phone application with a transportation service. In this way there are creating a lot of advantages for customers. I think old fashioned taxi services should be more innovative to compete with this kind of new services. At this point taxi companies just use lawsuits trying to stop the march of uber. I think this is unfair and not good for the consumer market. What do YOU think about Uber? Do you think they are an unfair competitor for traditional taxi companies? Do you think driverless taxis will save Uber from death? What strategical moves do you suggest to Uber to save the company from death?

Tell me your opinion in the comments below!

Sources:
https://www.linkedin.com/pulse/uber-bleeding-death-jared-carmel-2
http://www.mercurynews.com/2016/07/04/uber-battling-more-than-70-lawsuits-in-federal-courts
http://fortune.com/2016/08/07/uber-china-didi-chuxing
http://www.independent.co.uk/news/business/news/uber-loses-12bn-in-six-months-tech-company-lyft-didi-a7210666.html
http://www.nytimes.com/2016/06/02/technology/uber-investment-saudi-arabia.html?_r=0
http://www.nytimes.com/2016/04/20/business/international/saudi-threat-to-sell-us-assetscould-hurt-but-mostly-the-saudis.html
http://www.techrepublic.com/article/singapore-launches-driverless-taxis-ahead-of-uber-and-the-us
https://www.uber.com