Why Uber Is Not Invincible

Posted on September 2, 2014 by - Also by this author

Another idea from Uber: Chopper service. But maybe they could take it a step further: Fly in a chef via a chopper through an app for people who need cooking service now.
Another idea from Uber: Chopper service. But maybe they could take it a step further: Fly in a chef via a chopper through an app for people who need cooking service now.

As much as Uber and Transportation Network Companies (TNCs) are being hailed (not a pun) as the inevitable techno-reformers of ground transportation, the upstart corporation is not immune to hubris and overreach — two traps common to hot-flash companies.

Here are some tell-tale signs that the cosmic Uber trajectory could arc in varied directions, which means it’s not quite time to write off limos and taxicabs just yet:

All-Things Syndrome: In the last several weeks, Uber has breathlessly experimented with or launched an array of delivery services, including curbside lunch service in Santa Monica and ice cream trucks in Chicago. The latest venture is Uber Chopper in Los Angeles, where you can hit an app and — you guessed it — reserve a helicopter tour on demand. The term “chopper” actually reminds me more of that program on the Food Channel, “Chopped,” so I wonder if Uber’s next rollout will be: Uber Chef! Just hit an app and — you guessed it — a black Uber car or helicopter will bring a chef to your door to cook your dinner if you are too tired or busy.

In any case, Uber’s announcements and ventures, from charter jets to its fiasco rollout of Uber for Business, reeks of too much too soon, all things to all people. Wal-Mart may know how to pull that off, but then again, have you seen the book selection at your average Wal-Mart?

By the way, as I am writing and posting this, I got an e-mail from an agency promoting the latest Uber service:
"On Thursday, Sept. 4 and Friday, Sept. 5, Uber and GLAMSQUAD have teamed up to offer a special fashion week package, Uber users will be offered the chance to book a combined hair and makeup appointment for just $40 (regular price of $125) by using the promo code UBERGLAM.  Available on a first come, first served basis, a fleet of GLAMSQUAD X UBER branded cars will deliver the stylists to a client’s home, office or gym to provide GLAMSQUAD’s unique one-hour hair and makeup service."

Next step: Plastic surgeons and Botox specialists on demand! Don't wait for your nip & tuck.

Have-It-All Complex: Not content with its newfound success, partially as a result of regulatory deception at the expense of limousines and taxicabs, Uber is getting greedy, also known as “having-it-all.” Recent media reports of its hardball tactics against Lyft, an app-based competitor, reveals that the free and fair competition rhetoric espoused by Uber acolytes and editorialists is actually more along the lines of me-me-monopoly-speak. Uber not only wants to up-end chauffeured transportation and taxicabs, but it must try to cripple Lyft, as this recent article shows. Yikes, can’t they all just get along? Lyft can play with all the pink moustaches while Uber can play with black moustaches.

Play With Pay: Uber’s flex-time independent contractor model, while clever and carefully planned, may yet still succumb to the paycheck pinching of drivers, some of whom already are flirting with a union. When a company desperate to out-do competitors chops its rates and prices, that has to come from somewhere. And that often means — you guess it — pay and compensation for drivers. Look for more disgruntled Uber drivers to come forward, and as a lobbyist for the Greater California Livery Association predicted, the highly nuanced legal/labor definitions of contractors versus employees could snag them in due time. Just ask Fed Ex.

Hot-Shot CEO: A sure sign of overreach is a larger-than life CEO, a semi-cult figure lionized by the media and treated like the wunderkind of the moment. Need we say much more about Uber CEO Travis Kalanick? His media exploits and behaviors are well documented, but we hope for his sake he’s studying a famous roster of high-flying CEOs: Angelo Mozilo (Countrywide Financial), Kenneth Lay (Enron), Shawn Fanning (Napster), Jill Barad (Mattel Inc.), Sam Zell (Tribune Co.), etc. Not all of them did something illegal, but they burned brightly in the mediasphere for varying lengths of time until they had to cash in the reality checks.

Of the five CEOs I mentioned, Fanning of Napster is the most apt one to compare to Kalanick at Uber. I remember Napster fought for its business model when it burst onto the scene in 1998, basically predicated on unregulated thievery, only to have the company fizzle in 2001 after losing numerous court battles. Napster was supposed to be the advent of the sharing economy, a new business model for the 21st Century based on music file “swapping” and rethought notions of copyrights. Well, it didn’t quite turn out that way. Instead of a free universe of music from Napster, most of us are buying our music one-song-at-a-time now on iTunes, at 99 cents to $1.29 a pop. (Even the Grateful Dead, which encouraged its fans to record and share their unique concerts, still charged for concert tickets). In other businesses, that would be referred to as paying “a la cart,” or for “tiered” services.

Bending Rules: Finally, an eternal principle still holds: Once you start thinking the rules don’t apply to you because you are so great, pride goeth before the fall.

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