Uber: A Highly Funded Company With No Direction

Uber: A Highly Funded Company With No Direction

posted Saturday Jul 25, 2015 by Scott Ertz

Uber: A Highly Funded Company With No Direction

Uber is an interesting company. They are, in theory, a taxi service that doesn't want to be considered a taxi service for a variety of reasons, including regulation and licensing. It has caused them no end of trouble, with cities and countries worldwide working to shut them down. In New York, until this week, the city had been building a case to ban the service from its streets. In France recently, Uber drivers had their cars damaged, totaled or even impounded as part of a systematic crackdown by the government and other taxi companies. In some countries, such as South Korea, the executives are considered criminals and have arrest warrants issued.

With all of this, you would expect the company would be focusing on its lobbying or legal efforts to try and get these governments to come around to their way of seeing the world. Unfortunately, this is not really the case. In fact, the company seems to be completely unaware of their legal issues around the world. Instead, it seems that every week we see another press release from the company or a new partner introducing a new service or feature coming.

This week might have been the weirdest yet. Chinese up-and-coming smartphone maker Xiaomi has partnered with Uber to deliver their Mi Note phone "within a few minutes" using the ridesharing drivers. The courier service will initially be available only in Singapore and Kuala Lumpur, but it seems like this is a feature that would be coming worldwide, though not necessarily with Xiaomi. The feature seems fairly simple to use:

Ordering a Mi Note follows the exact same process as calling for an Uber - users simply open the Uber app, use the slider at the bottom of the screen to select 'Xiaomi.' Payment will be charged directly to the credit card tied to a rider's Uber account and a Mi Note will be delivered to the user within a few minutes.

While easy to use, it does seem like a feature that had to be developed specifically for this purpose. It is unlikely that the company would have spent the time and money to build a feature like this for just a single provider in 2 small countries, so expect to see courier services arrive in more places in the future. The move does, however, bring up questions about why the company is getting into this business with Xiaomi. Is the company unfocused or is it an attempt to find a similar yet unrelated business model?

If it is the latter, the company obviously did not research courier services worldwide any better than they research taxi services before launching. Courier services in many places are regulated similarly to taxi or limousine services, meaning they might have actually opened themselves up to more legal troubles rather than trying to find a less obtrusive business.

Personally, I believe this move to indicate a company with a lot of money and no business model. In 2010 we wrote about a similar problem at Twitter. While Twitter has resolved the problem somewhat, it still exists in the culture, with little chance of ever going away entirely. This is one of the problems when an industry sees an investment bubble like technology is seeing again right now.

While investors can argue there is no bubble all they want, it is clear that we're in the end-phases of too much money for too little value. Billion-dollar buyouts from companies like Facebook/Instagram show too much money in the industry, not success. In reality, no investor would have put money into Uber with all of the legal action, yet it seems that they get whatever money they ask for. With no plan for that money, however, you see floundering and business jumps that make no sense and ultimately damage the brand. Will this move close their doors? No. But it could indicate a problem with the culture inside the company.

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