Any insight on why his failures innovating at GE that caused him to resign aren't a red flag for an innovative company like Uber? Just because they're looking for a grown up?
It doesn't need someone to "execute" some sort of plan, it needs a miracle only innovation can provide.
The myth that their rides are unprofitable is because they spend money like drunken sailors in a whorehouse. Anyone analyzing their financials has no insight into whether ride sharing is profitable in the US, or other countries because the needed information is not broken out in those reports
They have up to 100 side businesses like UberEats. They've spent a ton trying to design autonomous vehicles they don't need now and likely never will need (given they'll be freely available for purchase from Tesla, GM, etc when created). Lastly, they spend huge amounts opening new markets, basically paying drivers to sign up with such lucrative bonuses that Uber gets scammed constantly by them.
The plan is pretty simple 1) Kill almost every side business, and do a substantial headcount reduction. 2) Dump the autonomous driving development group and cheaply settle the Waymo lawsuit. 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally. 4) Clean house in the HR department and of every remaining harasser. 5) Raise another round to ensure Uber's long term financial stability.
Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO.
They seem to scale in reverse. That is, an Uber that runs in the US and the UK will cost more to operate than an Uber that runs in just the US. An Uber that runs in one state will cost less than an Uber that runs in a whole country, and so on. The more diverse an area you serve, the more legislation and markets you have to deal with, more hours you'll have high customer support load, and the less well you will be able to analyze and react to trends in individual markets.
What stops me, then, in an era where Uber isn't fueled by investor money every trip, from being a competitor with Uber? Raise a few million dollars, get a simple app together with a few friends, and then convince drivers to try (take a lot of short Uber rides and pitch good drivers) and riders to ride. I'd have less staff, less overhead, and therefore less costs. The savings could be passed on equally to the drivers and riders. I could give discounts on nights when there was a big game, I could advertise in local areas, I could poach good drivers from Uber, etc.
It seems to me there is no way for Uber to be competitive if they aren't using investor to subsidize the price of rides. There is nothing, that I am aware of, that is impossible or expensive to replicate in their tech.
Abandon the auto project and UberEats (I don't even know if UberEats is even profitable or how many people actually use it) will allow the company to focus on core problems. How can you clean your house if your kids constantly go around the house making a mess? Let's get the house cleaned first then we worry about how to correct the kids' behaviors. Basically, do one thing well enough before moving to another.
They really need to focus on growing in cities and countries where they face competitions but already have a strong root. I understand the awesomeness to be the bigges, but look at Uber China, Uber had to parnter with Di Di instead (Uber doesn't run its business in mainland China anymore). Uber also recently shut down its business in Marcu because the drivers were fined so much no one would work for Uber.
And Uber has hundreds of competitors, and it's crushing all of them because of brand. I have Uber on my phone. I will never have your app. Getting app installs is hugely expensive and they have a huge lead. Even if you pay for installs, people will delete your app as soon as they realize you don't have as many drivers.
They have a huge lead in a big market. They need to not lose that.
People do switch their ride solution. For example, I used to use taxis when I needed to hire a ride. I switched to uber because it was easier and cheaper. If something was as easy and cheaper, I'd use that instead (For example, I use lyft whenever it has a better price and I have the time to check).
Building a competitor for a single city seems plausible. I don't think there is a technology related hurdle. All you need is the capital to build the brand and to be competitive on price.
> given they'll be freely available for purchase from Tesla, GM, etc when created
Tesla has a built-in "feature" in their cars, to make OTA updates to the software running the car. One part of the vision of buying a Tesla, is supposed to be the day when customers let their autonomous car "work" for them while they are not using it.
I don't think it's a huge stretch of imagination for Tesla to come out with it's own version of the ride sharing parts of Uber when autonomous driving becomes a full reality with their cars. They could eat Uber at this point.
> Thats a plan that gives Uber a very long runway to achieve full profitability, even without an IPO.
Points 3, 4 & 5 of the plan are likely going to be very difficult! Why?
> 3) Focus everyone left on ride-sharing, improving the brand, and efficiently expanding internationally.
I'm fairly certain there are very smart, well-paid people already trying to do each of things at Uber, not sure how reducing headcount will magically improve the state of affairs here. Mythical man month like arguments come to mind.
> 4) Clean house in the HR department and of every remaining harasser.
If the company was built on a foundation of sexist and abrasive culture, rooting every one out will take a long time, not to mention disruptive as it involves disentangling the fiefdoms built by these people (who may even be doing a "good job", causing damage to raw business metrics in removing them). I'm not saying this shouldn't be done, I'm just saying "birds of a feather flock together", so if I may dare say, wholesale pest removal might unfortunately be low on the priority of any new exec. They would be more focussed on other matters and just treat the symptoms. Human nature.
> 5) Raise another round to ensure Uber's long term financial stability.
If Points 1 & 2 are followed, without the silver-talk of "constant innovation" and projections of "taking over global transportation with our technology" - raising private funds might get extremely challenging and may not have the expected results. At that point, an IPO might provide better success as public investors are interested in "business that execute" as well, as opposed to the private investment folks who look for returns in the Order(s) of Magnitude scale.
1) It's possible Tesla could enter the ride-sharing market. And it's possible they could win. But I won't download a Tesla app until their service is as good a Ubers, and that's a huge barrier to overcome.
Uber's advantage is their massive lead in installed apps and available drivers. If they lose that, then they'll be at risk. Some autonomous company may pull it off, but the far more likely route is that Uber adds autonomous fast enough that none can catch them.
3) I'm not arguing to add headcount to ride-share, I'm arguing to add focus to it. Having a CEO 100% focused on ride-share instead of CEO 50% focused on ride-share and 50% focused on autonomous/uberEats/100 other side hustles will trickled down through exec staff, directors, etc.
4) Starting over in HR is your first start. You can't have a culture where people were allowed to hide problems or protect bad employees. It starts in HR.
5) An IPO is fine. It's all about financing the business over the long term, so the new CEO will pick the best possible financing path. And reducing burn rate might be enough alone to do it, since Uber should still have billions left in the bank.
Let's be fair, the $60B valuation was really dumb and won't be seen again for a long time if ever. You can't count on having investors as dumb as the Saudi's again.
Could it be that there are profitable rides in some of its markets that inspire investors that it would eventually be able to make every ride profitable at some point?
If you fired 75% of the people, and focused on selling rides and selling cars to drivers, the company would probably coast and make money for years.
It simply can't be that they spent even a small fraction of that writing software, smartphone apps just aren't that expensive. But they've got one helluva marketing engine and investor relations group...
That, and a lot of their money is buying market share, effectively subsidizing people's rides.
I've never understood how that's going to work, beyond vague handwavey arguments about potential future driverless cabs and other complex arguments that don't seem backed by data.
IMO it doesn't do them just when we say "it's just an app". It's a complex operation that they've simplified to appear as that way.
Also, they already have substantial scale. When would one reasonably expect them to stop losing so much money?
https://www.google.com/amp/amp.timeinc.net/fortune/2016/09/1...
Similarly: Why is Blue Apron a tech company? Their business model is putting food in a box, and then shipping it to people. That's great, but my local grocery chain does that too?
And then there's Juicero, who's only claim to being a tech company seems to be they printed QR codes on the packaging, despite the QR codes being entirely unnecessary to their core business. If Kraft puts a QR code on a box of mac and cheese so you can scan it and get a cooking instruction video on your phone, do they become a tech company too?
It's just branding.
My current and my previous company is a traditional business, both more than 20 years old. They sell a product or service that has existed for decades. But damn they both tried to say we are a startup, we are a tech company, etc etc.
https://www.bloomberg.com/view/articles/2017-08-09/yogurt-li...
They're virtual-reality companies.
https://hackernoon.com/blue-apron-is-not-a-tech-company-neit...
Like that Pepsi guy that ran Apple (into the ground).
"Jeff [Immelt], do you want to sell planned-obsolescence dryers and weather derivatives the rest of your life?"
You can argue that Sculley saved Apple. At the time Jobs was a terrible leader and manager, and he had way over-forecast Macintosh sales. And because of it, Apple was hemorrhaging. After booting Jobs, Sculley cut head-count, refocused Apple on it's bread and butter product, the Apple II and led Apple to a massive turnaround. Sculley did so well he lasted 10 years as CEO.
Uber is a company that was a great idea, got off to a great start, but then management started to constantly sabotage themselves. Travis has acted as irrationally as Jobs 1.0 did. Bringing in a Sculley type is exactly the type of leader they need now. Clean out all the dumb side business ideas, refocus on the car sharing service, and work hard to rebuild it's brand.
Ten years from now they might need someone more creative (and Immelt is so old there is no way he's going to run it for that long). But right now they need to survive and get back on track.