[imagesource: WIRED / Nadia Mendez]
2019 hasn’t been a bumper year for Uber, due in large part to the revelations around the behaviour of former CEO Travis Kalanick.
Then there’s the fact that its financials in the year’s second quarter, which consisted of April through to the end of June, saw a loss of $5,2 billion.
Despite this, the company’s current CEO, Dara Khosrowshahi, has been saying that it’s business model is sustainable, and generally putting a positive spin on things.
That’s going to be a little tougher now that Uber has been denied a licence to operate in London, which jeopardises one of its most lucrative markets.
Uber will appeal the decision, so all hope is not lost, but that could spell the end for 45 000 drivers and more than three million customers.
Most worryingly, London is not the only city where things are going wrong. The Telegraph reports:
…Uber’s skirmishes in London are just an echo of its broader challenges around the world as it battles regulators, faces billions of dollars in losses and fights to diversify its businesses in order to one day turn a profit.
In New York, Uber has been forced into changes over minimum wage and vehicle restrictions. In San Francisco, it is locked in a battle over gig economy rights.
But its biggest problems are financial.
Following its float in May, the company lost $5.2bn in the three months to August and $1.2bn in the three months to October. Its share price is down 30pc following its $82bn offering.
It is still trying to prove to investors that ride-hailing, which sees consumers book a private hire car through its app, will ever break into the black.
London will really sting, because it’s one of the company’s few profitable markets, and could also set a precedent that other cities may follow.
In addition, the US driverless car business, which was initially heralded as the way of the future, has stalled following the death of a pedestrian in Arizona earlier this year, and Uber Eats is only slated to turn a profit in 2024.
One Wall Street analyst said that if the London ban was upheld, it would be a “seismic blow”, although Uber’s market share in the city has been under threat from rivals who are pursuing aggressive expansion:
Rivals, meanwhile, have plowed investment into Britain’s highly competitive ride-hailing market. France’s Kapten unleashed a major public relations offensive to appeal to Londoners, while alternatives like Bolt have sought to attack Uber over its failure to win back its London licence.
Uber is expected to continue to make changes to appease Transport for London and hang onto its operations in London. It has already audited all its London drivers following TfL’s new concerns, and Uber’s Heywood said this would come in the form of new software to prevent driver fraud, including “a new facial matching process, which we believe is a first in London taxi and private hire”.
But even if those updates are enough for London, it remains a microcosm of Uber’s struggles around the world, and its increasingly frantic battle to prove its billions in investment were worth it.
If Uber were to implode, it would certainly shake things up here in Cape Town, too. Bolt doesn’t yet have the desired volume of drivers on the road, especially outside of the CBD, and some of their vehicles aren’t exactly in tip-top shape when they arrive to pick you up.
Just remember that anything is better than getting behind the wheel after one too many, so don’t be that person.
[source:telegraph]
