This post from New York lays out the different reasons why Uber is poised to be a big thing. All this started with a post on Valleywag about Uber’s financials. Then there’s the idea that they’re working with GM and Toyota to get some drivers new cars for $100/month (lease payment) so long as they become Uber sub-contractors. Things line up nicely for Uber, though: more Americans are moving to cities (it could be as high as 80 percent living in or immediately around a city by 2050), and they’re making interesting, Amazon-type moves like partnering with Home Depot to allow people in select cities to order a Christmas tree, and have it delivered, via app. To summarize: they have a lot of money, but they need more drivers. If the GM/Toyota stuff works and they have more drivers, the ride price can go down. People in cities will see a cheaper ride price and realize they can order said vehicle from their phone, as opposed to going outside and raising their hand (which literally never works in any kind of semi-inclement weather). Google, which is pretty much the organization when it comes to using one base power (search) to do good in other areas, invested $258 million in Uber this summer. Google’s also doing this whole self-driving car project. Put all these various pieces together and you have a potentially really interesting, almost cinematic future: people move to cities and decide, “Hey, we don’t need a car.” Uber has a huge fleet in that city, including some self-driving cars, and basically that’s how people get around socially and do errands — and they have less debt (car payments) and the environment is a little bit better off (less people buying SUVs and chugging to the mall, the sheer picture of American exceptionalism). Uber could theoretically recreate the modern American city, or — regulators could shut the whole thing down.
Think about this: Facebook is valuable because everyone is on it (numbers are insane), so the data that a marketer or someone else could cull is extraordinary. But ultimately, what is Facebook? It’s kind of like a cross between Flickr and listening to your cousin bitch at a family gathering, honestly. It’s mostly a series of inane proclamations or photos from people, but it’s a good way to keep a basic understanding of what people in your life are up to or doing. I value that (think baby pictures), but I don’t necessarily value bathroom pics or pics of people’s lunch or “OMG, these tests!” That shit is ludicrous and un-necessary, but the sheer numbers drive Facebook. You can say it’s the darling of the social world for its IPO, or because of its connectivity of people (although it has been shown to make people depressed), but the fact is, on a day-to-day basis, I’m not sure what it’s contributing. A way to keep track of friends and periodically see cool photos and links? OK. We had that before Facebook, just maybe not at the same level. Twitter is valuable because it’s real-time; you can see things unfold in front of you via your phone or your laptop. It needs a larger user base, but still — there’s a lot of inane crap out there too. Uber is a social application by definition, and it (a) connects you with a service you need (a ride) and (b) makes the payment relationship pretty direct and (c) could help cities run more effectively. All that seems positive. I see negatives too, but I see more negatives in the long-run for a Facebook or Twitter — what happens if people get bored of Facebook, or the ads start to become too much? What happens when future generations of teens don’t adopt it as much? I can see mostly positives in the future for an Uber, minus the regulatory issues and/or international competition.
That video is from a month ago; Uber had just debuted in South Africa. It’s now in 22 countries and 60+ cities. In the past week and a half alone, it launched in New Dehli and Abu Dhabi. Here’s the thing I keep thinking about: people will always want to be connected to their friends, yes, but before Facebook we had e-mail and telephones and reunions. The way we share and contextualize information on FB might get boring to some. But people will always need a way to get to places, and as long as public transportation is a struggle for some American cities, Uber’s value is going to continue to rise. If you come out of undergrad with debt and shitty job prospects (read: America as we know it, and probably the broader world as we know it), and you want to settle near or in a city because it’s hipper and you have a cluster of friends there, well… you might not be able to afford a car, and maybe the city you want has so-so public transportation. But if Uber is suddenly at $12 a ride, that’s now an option for some aspects of your life. (Yes, this is a complex equation that also involves housing prices, how close your job would be, etc.) Regardless, the utility of needing to get around in a cost-effective, environment-mostly-effective way is always going to be there; the utility of telling 400 people you just ran a 5K might not always be there. Attitudes and fascinations can change easier than base needs, like the need to get to a supermarket.
The Uber valuation right now has been quoted around $3.5 billion, but it’s actually probably more than that. It’s kind of insane to think that a company essentially remaking the corporate car idea could be worth that, but think of some of the ideas above. If this idea works and their strategy and business partners stay sound (there’s something in it for General Motors too), Uber can literally reshape the idea of being an urban youth. That’s big. That has value. Also remember: a company coming of age in today’s marketplace has certain advantages, i.e. “nimbleness,” over long-held traditions like cabs. For one, the payment model can start from a logical place, instead a really long evolution towards one.
They’re also delivering kittens, which is almost a business move built for the social media/Buzzfeed era.
At the end of the day, a business will succeed because it (a) provides a crucial need for a base of customers and then (b) builds on that base and shifts what it can provide and then (c) offers a potentially glorious future state for investors. That’s basically the Amazon model. At first they sold books. Then they sold more. Now you can buy deep fryers and stuff like that on there. They also provide cloud computing to tons of people, including the CIA. They’re building towards a world where everything you need is one click away — so they’ve hit all three boxes. Uber can do the same thing. It could honestly be the absolute darling of all the app-based companies within even five-ten years.