On a recent business trip to Dublin, I had first-hand experience of an Uber cab ride. In the event, it wasn’t quite as easy or, as enlightening, as I’d envisaged and involved a 300m dash to be collected outside the constraints of the taxi-rank by a ‘normal’ cabbie operating under-the-radar and risking the open wrath of his fellow cabbies – in fact one of the number signalled his disgust in the expected manner as we climbed aboard, making me feel like a complicit conspirator. Mind, for the return journey on the following day, we couldn’t get even one of the several locally-sited Uberers to accept our call to arms and resorted to waiving wildly at any passing car. For an organisation that loves, along with bedfellows Airbnb, Shazam, Spotify & Blah Blah Car, to claim nothing less than world domination, the whole episode was a bit of an underwhelming introduction to the darling of the digital age, and first-borns can thankfully rest a little more easy in the beds tonight.
Uber’s launch, land-grab, and subsequent international adoption, has led to the organisation rapidly assuming the position of the world’s largest taxi, er, ‘ride-share’ company, operating in almost 70 countries and throughout 350 cities. In London alone, over a million passengers have downloaded the app and their 25,000 ‘partners’ (Uber’s drivers) now outnumber the alternative black taxi cabbies. Enjoying consistent growth of 40% each & every quarter has led to a stratospheric valuation of $62.5bn (yep, sixty-two-and-a-half billion dollars) which sees Uber now worth more than those illustrious organisations who often facilitate the actual journeys including Ford, Honda & General Motors. And yet, it employs no drivers, no chauffeurs and owns no cars or limousines.
So, you’d be forgiven for thinking all’s fine & dandy with the poster boy of the ‘gig’ or ‘sharing economy’. But it ain’t, and it ain’t by a considerable long haul. It turns out that, due to roll-out and infrastructure costs, the company are haemorrhaging cash like the clicking taximeter on a waiting cab, and ticking away at the rate of $1bn during the first six months of last year. Ouch.
And the bad news is that it’s undoubtedly going to get even more uncomfortable for the struggling star. The ubiquitous ‘social platform’, at the very heart of Uber’s commercial proposition, seeks to seamlessly bring together services providers, partners or customers (drivers again) with passengers, and consequently everything happens remotely in cyber-space via electronic bank transfer & email, for which Uber takes its princely 25% cut of the action. But, this is where the company’s chickens are potentially coming home to roost. Uber bills itself as no more than an introducer, claiming its drivers are not employees but independent freelancers and as such are not privy to such formal luxuries as holiday pay, sick pay, legal rights, training allowances, pension contributions and, in the UK at least, national insurance contributions. However, with equally sharp-elbowed legal-eagles the world-over queuing up to prove exactly the opposite and, specifically, one particular Californian jury poised to set an important precedent later this year, the wheels may just be about to fall off this particular dotcom juggernaut…