Uber by the Billions

Uber just celebrated its two-billionth trip in a 147-way tie, according to CEO Travis Kalanick, who shared the information in a Monday post on Facebook.

Each of the drivers and riders who began their trip at 4:16 a.m. GMT on Saturday, June 18, got a US$450 gift from Uber — the number is significant because Uber now operates in 450 cities across the globe, Kalanick said.

The company’s growth trajectory is impressive. It took five years for Uber to notch its first billion, the CEO noted, but just another six months to hit the 2-billion ride mark.

Uber’s billions can be counted in other ways than by rides, though. The company has raised close to $15 billion in cold cash and has a market valuation of $68 billion.

The French Disconnection

Despite its successes, Uber’s road to success has not been entirely smooth.

The company has faced severe opposition from local labor unions in Europe and many U.S. markets, as well as severe scrutiny from local governments that are concerned about the long-term impact of the new ride-sharing business model. A criminal court in France last month fined uberPop about US$900,000 (800,000 euros) for operating an illegal ride-sharing service.

The court also fined two executives of the service, which was shut down last summer after violent protests erupted in France over what local taxi drivers considered unfair competition.

“We stopped uberPOP last summer and we are disappointed by this judgment,” an Uber spokesperson said in a statement provided to the E-Commerce Times by company rep Manon Guignard. “The European Commission has just published guidelines that support such services.”

Heetch, a rival ride-sharing service that targets late night partygoers, faced almost identical charges, the company noted.

The judgment in France followed a court decision that banned uberPop in Frankfurt, Germany, earlier this year.

Uber had appealed a 2015 ruling against its German low-cost operations, which reportedly were shut down after a complaint was filed by rival service Taxi Deutschland.

Uber last fall shut down its ride-sharing service in Frankfurt after 18 months of operation. It also shuttered its services in two other German cities, Dusseldorf and Hamburg, after two years of operating in those markets.

Both the French and German cases targeted certain unlicensed Uber services, noted Bruegel scholar Georgios Petropoulous.

“The company itself has developed licensed services that operate without problem, and in fact they became more popular after such court decisions,” he told the E-Commerce Times. “Uber itself has the capacity to accommodate such decisions and adjust its business model so that it will minimize the potential damage.”

Although the judgment against uberPop had no bearing on Uber’s current French service, which connects more than 12,000 professional drivers with 1.5 million passengers, the company said, it nevertheless planned to appeal.

Growing Pains

“Uber’s global ambitions mean that the company faces the same fundamental challenges that any business deals with as it expands into foreign markets,” noted Charles King, principal analyst at Pund-IT.

The company must navigate complex legal, cultural and social issues at it enters new territories with their own local politics and historical relationships between business and government, he told the E-Commerce Times. “The problem is that the company hasn’t shown much talent so far for effectively dealing with these situations.”

The fact that Uber is operating with a new business model that throws out traditional forms of job security, service delivery and community relationships has led local governments to cast a wary eye toward the company.

“A lot of judges are concerned about jumping in and supporting a disruptive industry like Uber, Kelley Blue Book Senior Analyst Rebecca Lindland told the E-Commerce Times.

The Home Front

Uber has faced a series of labor and legal challenges in the U.S. in recent months. Local officials in Austin, Texas, essentially blocked the major ride-sharing services from operating there. In New York, local drivers won the right to organize into a guild affiliated with the International Association of Machinists.

The legal setbacks apparently have not seriously inhibited the company’s rapid expansion and new development. Uber reportedly is in negotiations with Fiat Chrysler — and possibly other auto makers — to establish a partnership involving self-driving cars. A deal could be completed by the end of the year.

A number of technology companies and major auto makers, as well as ride-sharing fleets, have been in hot pursuit of self-driving vehicles.

Self-driving cars are a potentially lucrative market for ride-sharing services to transport seniors, disabled persons, or other people who can not drive.

The potential market could be huge if self-driving cars should become convenient alternatives for customers who don’t want to own a vehicle, for whatever reason.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

1 Comment

  • "Local officials in Austin, Texas, essentially blocked the major ride-sharing services from operating there."

    This is a complete misstatement of the facts in Austin regarding Uber. All ride-sharing firms are free to operate in Austin, TX. Uber/Lyft unilaterally pulled out after losing a referendum that they initiated to prevent the City of Austin from implementing ride-share regulations, including fingerprinting for drivers, to be commensurate with the rest of the local taxi industry. There was no blocking by Austin, and Uber/Lyft spend a multiple of what the fingerprinting would have cost them on election marketing.

    So please quit distorting the truth, and stop believing everything that Uber releases, because Uber lies left and right and is not a truthful source of information.

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