Business Unusual

Bitcoin, Uber and GoPro - how the mighty are challenged - Part 1

This is an update to the coverage of three subjects previously featured on Business Unusual. Typically these businesses were hailed for their ability to disrupt the market they were in and it appeared at the time that good times lay ahead.

No business gets a free ride though and their success came at the cost of the previous incumbents. As they now move into the prime position it is others that are trying to disrupt them.

This is part 1.

Uber

For an 8-year-old company to reach a $70 billion valuation sounds like the very definition of success, but there have been quite a few bumps in the road since it was last featured in August 2015.

Here are some of them.

Court cases are pending in the US and Europe to determine if Uber drivers are contractors or employees.

The competitive rates for riders has attracted many to the service that has passed the 2 billion trip mark. But there is growing evidence to suggest that the numbers do not add up for the drivers to make enough to sustain themselves as hoped.

A long term goal was to introduce driverless cars into the fleet which included support from Alphabet (formerly Google). This has grown to include the driverless trucking service Otto which Uber acquired. Alphabet has sued over allegations that the Otto founder had stolen intellectual property from their former Alphabet employer Waymo.

A partnership for autonomous vehicles with Ford has also not gone as smoothly as hoped which, given the nature of the project is understandable, but Uber will be looking to resolve that in order to address one of their largest ones, they are not profitable yet.

A blog post by former female engineer critical of the scale of sexual harassment at the company and the poor response by superiors prompted Uber to hire former US Attorney General to investigate.

The CEO Travis Kalanick has had his fair share of trouble with many critical of his acceptance to join US President Trump’s advisory council, which following the decision by Uber to not support a 24 hour stay away from JFK airport in solidarity with taxi drivers protesting the introduction of a travel ban. A reported 200 000 users deleted their app in protest. He has since quit the council.

A video of Kalanick being challenged by the driver at the end of a journey he had taken reflected badly on Kalanick’s willingness to acknowledge the precarious position drivers are in. Kalanick has apologised for his behaviour and undertaken to get a management coach.

After trying to gain a competitive share of the massive market in China, it agreed to merge and become part of the dominant Chinese provider Didi Kuaidi.

Most recently the admission that Uber had been using special software to circumvent law enforcement authorities in cities where the service was not permitted and had been doing so since 2013 when it was only 4 years old, does not suggest the company has the highest ethics when dealing with its challenges or that was operating in good faith as it claimed.

On their own, each of these would be a hurdle for the company to learn from and grow, but as the number of missteps increase their impact begins to add up which could cause doubt about the company reaching the $70 billion valuation when they do eventually list.

Now read part 2 - GoPro

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