Uber is now worth $146b. Lyft, which at one pointed seemed like the definitive rival is worth $5b. Here’s the relative performance of the two over time:
Dara is undoubtedly one of the best CEOs of the modern era. But back in 2017, Dara wasn’t sure he wanted the job. He had enough money, loved the people at Expedia. But then Daniel Ek asked him “since when is life about being happy?”
And there were many things to be unhappy about 6.5 years ago when Dara joined Uber:
Travis had been pushed out Uber, and Travis loyalists inside and out were sure to react poorly to the ‘professional’ CEO.
Not unrelatedly, there were deep cultural problems with a sexual harassment promoting, bro-ish, rule-breaking culture
Uber was investing big into self-driving, because it seemed so obvious that was the future. In fact, Uber invested so aggressively that they hired someone who blatantly stole intellectual property from Google and went to jail!
There were safety concerns for riders and drivers world wide, combined with ongoing regulatory challenges.
The company had so many adjacent bets including Uber Eats, Uber Trucking, helicopters, you name it.
Uber was losing billions of dollars in major markets like China and Southeast Asia.
As an amateur business historian and a real-life practitioner, I wish could read the case studies of many of the decisions. Because it’s not obvious that they were the right decisions at the time, even if they ended up successful. What was known at the time, and how was the decision made?
Here are two that standout to me:
From a pure financial standpoint, it would clearly have been better for Uber to have never spent a dollar on self-driving cars up until today. But narratively at the time, self-driving cars were just around the corner. Everyone was doing them, and Uber’s stock would have been valued at a fraction of its worth if they weren’t seen as making a bet there. Plus, it was an ‘obvious’ solve to losing money in their primary business, of well, hiring drivers.
Uber Eats was a totally different business in many ways, requiring relationships with merchants, a different buying and driving experience. Bill Gurley at the time thought it was a distraction, and there was good reason to with existing dedicated businesses like Grubhub, Doordash, Seamless, and so on focused on it. The pandemic killed the taxi business for both Uber and Lyft, and strong food delivery demand allowed Uber to nearly knock out Lyft
It’s still magical to able to call a car from your phone and have it appeared in trusted way in a few minutes. I discover more of the world because I can do so.
Kudos to Uber on a great ride.
I have to say, the last three posts have been thought provoking and just excellent quick reads.
Excited to be learning from you again!