WEBVTT - The Uber Story (So Far) 0:00:04.320 --> 0:00:07.520 Get in text with technology with tex stuff, Chrome host 0:00:07.680 --> 0:00:15.520 ft dot Com. EI there, and welcome to tex Stuff. 0:00:15.560 --> 0:00:18.880 I'm Jonathan Strickland, and today we're going to look at 0:00:19.120 --> 0:00:23.360 the Uber story, story about the company Uber, not an 0:00:23.480 --> 0:00:27.120 Uber large embank story, although I guess it's that too. 0:00:27.600 --> 0:00:30.360 Now this is gonna be part one. I've already recorded 0:00:30.440 --> 0:00:33.440 Part two, Peek behind the Curtain brought Scott Benjamin in 0:00:33.560 --> 0:00:36.800 for a little discussion about Uber and Uh. It ended 0:00:36.880 --> 0:00:38.440 up being so long that it had to be its 0:00:38.440 --> 0:00:41.280 own episode. I was originally just gonna kind of tag 0:00:41.280 --> 0:00:43.680 it onto the end of this one, but you can 0:00:43.720 --> 0:00:47.360 listen to the next episode to hear Scott's ideas about 0:00:47.479 --> 0:00:50.239 Uber and autonomous cars and a fleet of vehicles that 0:00:50.320 --> 0:00:53.760 take you places without any human drivers. But for this episode, 0:00:53.920 --> 0:00:56.640 I really wanted to look at the story of Uber itself, 0:00:56.720 --> 0:00:59.720 not its future, but it's past and up to the present. 0:01:00.320 --> 0:01:03.040 So to look at how Uber came about, you have 0:01:03.120 --> 0:01:06.480 to go back to two thousand eight. That's when a 0:01:06.480 --> 0:01:11.360 pair of entrepreneurs named Garrett Camp and Travis Kalinnik began 0:01:11.400 --> 0:01:13.240 to talk about a way to make it easier to 0:01:13.240 --> 0:01:18.240 get a taxi in San Francisco, world's turn upon such 0:01:18.360 --> 0:01:22.440 thoughts bloom So. Camp was a co founder of the 0:01:22.520 --> 0:01:27.360 web discovery platform stumble Upon. So, in case you've never 0:01:27.480 --> 0:01:30.559 used it, stumble Upon is a web discovery tool. Let's 0:01:30.959 --> 0:01:34.120 users share web pages, you can rate them, and it 0:01:34.200 --> 0:01:36.720 also a lots lets you discover other web pages and 0:01:36.760 --> 0:01:39.520 photos and videos and other web related content that your 0:01:39.560 --> 0:01:42.800 friends liked. It's sort of a curation engine, so the 0:01:42.840 --> 0:01:47.080 idea is that it helps you discover stuff related to 0:01:47.120 --> 0:01:49.360 your interests. So it's kind of like a search engine, 0:01:49.400 --> 0:01:51.720 but it's always on the lookout for things that you 0:01:51.800 --> 0:01:56.400 might find interesting, so kind of a baby step towards 0:01:56.440 --> 0:01:59.960 the semantic web, but it's largely dependent upon other people 0:02:00.120 --> 0:02:06.080 tagging that information. In May two thousand seven, eBay bought 0:02:06.200 --> 0:02:11.000 stumble Upon for seventy five million dollars. So in two 0:02:11.040 --> 0:02:14.280 thousand and eight, there's Camp sitting around thinking about what 0:02:14.400 --> 0:02:17.239 he's going to tackle next. He's still CEEO of stumble Upon, 0:02:17.960 --> 0:02:21.520 but you know, he's also flush with cash, and by 0:02:21.520 --> 0:02:23.600 the way, he would go on to buy stumble Upon 0:02:23.720 --> 0:02:26.280 back from eBay in two thousand nine along with a 0:02:26.320 --> 0:02:30.160 few other investors. Meanwhile, you've got Travis Kalenik, who had 0:02:30.240 --> 0:02:33.200 dropped out of the computer science program at u c 0:02:33.520 --> 0:02:37.679 l A to found a company called Scour Incorporated. That's 0:02:37.960 --> 0:02:42.160 s c O you are, and that was a multimedia 0:02:42.280 --> 0:02:46.320 search engine. He also created scour Exchange, which was appeer 0:02:46.440 --> 0:02:51.200 to peer file sharing service. Uh, peer to peer file sharing. 0:02:51.200 --> 0:02:54.000 I'm sure you guys remember, But this is a method 0:02:54.120 --> 0:02:59.320 of transferring large data files quickly by creating a network 0:02:59.480 --> 0:03:03.639 of peers, all of whom are either hosting part of 0:03:03.800 --> 0:03:07.240 or an entire file large file, and they make that 0:03:07.280 --> 0:03:10.400 available to other peers in the network to download, so 0:03:10.440 --> 0:03:13.680 it speeds up the downloading process. And this is not 0:03:13.800 --> 0:03:18.480 necessarily a means to get illegal content like works that 0:03:18.520 --> 0:03:21.240 are protected under copyright and in other words, it's not 0:03:21.360 --> 0:03:24.600 necessarily a way to pirate stuff. But it has been 0:03:24.720 --> 0:03:27.320 used to pirate things, and so a lot of people 0:03:27.360 --> 0:03:30.840 equate peer to peer networks with illegal activity. That's just 0:03:30.960 --> 0:03:34.120 not true. It's just a means of distribution. It's kind 0:03:34.120 --> 0:03:37.640 of like saying a road would be illegal because someone 0:03:37.680 --> 0:03:40.760 was driving something illegal in a car, or that the 0:03:40.800 --> 0:03:45.280 car itself is illegal. That's ridiculous. Obviously. However, it has 0:03:45.320 --> 0:03:50.640 meant that certain industry organizations like the m P A 0:03:50.640 --> 0:03:53.760 A and the r I Double A have come down 0:03:54.080 --> 0:03:57.920 on these companies and threatened them with enormous lawsuits for 0:03:58.160 --> 0:04:01.200 allowing such things to happen. Uh. The d m c 0:04:01.400 --> 0:04:05.200 A says that it gives you know, safe harbor to 0:04:05.600 --> 0:04:09.600 two companies that host these services as long as those 0:04:09.600 --> 0:04:15.400 companies take pains to remove or prevent piracy from happening uh, 0:04:15.440 --> 0:04:18.080 and then they're they're protected. But the r I Double 0:04:18.120 --> 0:04:19.720 A and the m P A and a couple of 0:04:19.760 --> 0:04:24.000 other organizations all filed lawsuits against scour and so the 0:04:24.000 --> 0:04:29.719 company declared bankruptcy in September in anticipation of those lawsuits 0:04:29.760 --> 0:04:33.479 coming at them and kind of dissolved. Kalin Nick would 0:04:33.520 --> 0:04:36.120 then go on to start other companies. The next one 0:04:36.200 --> 0:04:39.320 was called red Swoosh, which was another peer to peer 0:04:39.360 --> 0:04:43.440 file exchange service, which was eventually acquired by a Kami 0:04:44.080 --> 0:04:48.560 Technologies or Akamai Technologies in two thousand seven for nineteen 0:04:48.680 --> 0:04:51.839 million dollars. So both call Nick and Camp we're doing 0:04:51.839 --> 0:04:54.440 pretty well for themselves. When they met up to talk 0:04:54.440 --> 0:04:57.040 about a way to leverage the Internet and mobile devices 0:04:57.080 --> 0:04:59.840 to make it easier to hail a cab to get 0:05:00.040 --> 0:05:03.279 a taxi in San Francisco, and actually in the very 0:05:03.360 --> 0:05:07.040 beginning it was a bit more elitist than that, according 0:05:07.080 --> 0:05:10.840 to some reports. Anyway, The story is that Camp and 0:05:10.920 --> 0:05:14.600 call Nick were in Paris for the low Web conference 0:05:15.279 --> 0:05:17.599 and the two began to moll over what a pain 0:05:17.720 --> 0:05:19.680 in the patook as it is to hail a cab 0:05:19.720 --> 0:05:23.000 in San Francisco, particularly when you're loaded down with luggage. 0:05:23.320 --> 0:05:27.400 So they started talking about collaborating on a particularly private venture. 0:05:28.080 --> 0:05:30.560 They began to wonder if it would make sense for 0:05:30.640 --> 0:05:33.760 them to go in together and purchase a Mercedes S 0:05:33.880 --> 0:05:37.960 class vehicle and hire a personal driver and get a 0:05:38.000 --> 0:05:41.200 parking spot in a garage that would be geographically equa 0:05:41.240 --> 0:05:44.840 distant to their individual houses. In other words, at first, 0:05:44.839 --> 0:05:47.440 they were just talking about sharing a personal driver and 0:05:47.520 --> 0:05:50.760 a car, so kind of like an uber just for 0:05:50.880 --> 0:05:55.240 the two of them. But this conversation evolved into the 0:05:55.320 --> 0:05:58.240 idea for a mobile app that would allow you to 0:05:58.279 --> 0:06:00.480 put in a request for a dry her and a 0:06:00.600 --> 0:06:04.039 service of drivers capable of responding to such a call. 0:06:04.720 --> 0:06:07.160 So Camp would go on to work on that idea 0:06:07.200 --> 0:06:09.919 in his spare time, and he actually produced a prototype 0:06:09.920 --> 0:06:12.960 app in March two thousand nine, at the time, he 0:06:13.000 --> 0:06:17.080 was calling it uber Cab. Now Camp actually hired Kallinik 0:06:17.279 --> 0:06:21.000 to become the full time custodian of uber Cab. So 0:06:21.160 --> 0:06:24.400 Camp was still being busy as the CEO of stumble Upon, 0:06:24.800 --> 0:06:27.640 and it was Kalenik's job to take this initial prototype 0:06:27.680 --> 0:06:30.240 app and develop it until it could launch as a 0:06:30.279 --> 0:06:33.640 real service, with the aim of launching it in San Francisco. 0:06:34.920 --> 0:06:37.520 In January two tho the service was ready for a 0:06:37.560 --> 0:06:39.960 test run and it was about as alpha as you 0:06:40.000 --> 0:06:44.200 can get. There were only three cars and they started 0:06:44.200 --> 0:06:47.159 in the city of New York City, so three cars 0:06:47.200 --> 0:06:51.160 in New York City is a tiny test run of service. 0:06:51.880 --> 0:06:55.760 In March two thousand ten, Uber would hire Ryan Graves 0:06:55.760 --> 0:06:58.000 to become the general manager of the company. And this 0:06:58.040 --> 0:07:00.960 is a pretty funny story all on its own. Kalinnik 0:07:01.080 --> 0:07:04.120 actually posted on Twitter that he was looking for a 0:07:04.200 --> 0:07:07.359 business developer and he said that there would be big 0:07:07.400 --> 0:07:11.640 equity in a pre launch product. So Ryan Graves responded 0:07:11.640 --> 0:07:13.880 to the tweet and send a Twitter message of his 0:07:13.920 --> 0:07:16.360 own that said they should email him, and they and 0:07:16.400 --> 0:07:19.960 he gave his email address over Twitter, and I guess 0:07:20.000 --> 0:07:24.000 things worked out because they hired him. Now. Ryan Graves 0:07:24.000 --> 0:07:27.320 had been working at General Electric and had described his 0:07:27.360 --> 0:07:32.520 position there as being quote unquote unglamorous and not really 0:07:32.960 --> 0:07:35.960 any room for him to to advance in his job, 0:07:36.320 --> 0:07:38.680 at least not that he could see. He had also 0:07:38.760 --> 0:07:41.520 served as an intern for four Square and apparently it 0:07:41.640 --> 0:07:45.440 kind of just wheedled his way into their depending depending 0:07:45.480 --> 0:07:48.800 upon whose account you believe, and he would eventually become 0:07:48.920 --> 0:07:52.720 the CEO of Uber for a short while before Kalinnik 0:07:52.840 --> 0:07:55.160 took over that position and Graves would become involved in 0:07:55.160 --> 0:07:58.040 the global development of the company, so his focus began 0:07:58.160 --> 0:08:03.239 to be um really directed at getting Uber into various 0:08:03.240 --> 0:08:08.280 cities around the globe. But a very successful hire, and 0:08:08.320 --> 0:08:11.680 it's funny that it happened over Twitter. In July two 0:08:11.720 --> 0:08:14.680 thousand ten, Uber would hit the streets of San Francisco. 0:08:15.360 --> 0:08:18.320 Uber Cab was being called an on demand car service 0:08:18.440 --> 0:08:21.160 via the iPhone. There was no Android app at this point, 0:08:21.840 --> 0:08:24.240 and at this stage the service already used the phone 0:08:24.280 --> 0:08:27.040 to determine your location and to send a driver to you, 0:08:27.360 --> 0:08:30.320 or you can use the map within the app service 0:08:30.360 --> 0:08:33.560 itself to indicate an exact pickup location that your driver 0:08:33.640 --> 0:08:36.760 would go to. Now, drivers in the area would be 0:08:36.800 --> 0:08:41.120 alerted to your request, so when a driver accepts your request, 0:08:41.600 --> 0:08:43.800 that request goes off the list, so that way you 0:08:43.840 --> 0:08:47.679 don't get multiple drivers all responding to the same request. 0:08:48.360 --> 0:08:50.599 The driver who accepted it then heads your way to 0:08:50.679 --> 0:08:53.240 pick you up and take you to your destination, and 0:08:53.280 --> 0:08:55.440 you can rate the driver, and the driver can also 0:08:55.640 --> 0:08:58.360 rate you too. You can give a review and the 0:08:58.440 --> 0:09:01.600 driver can review you, so users who have low ratings 0:09:01.679 --> 0:09:04.440 might find that they aren't getting rides as easily as 0:09:04.520 --> 0:09:07.760 other people. In other words, it pays to be nice 0:09:07.800 --> 0:09:11.240 to your driver, or at least not to be obnoxious 0:09:11.280 --> 0:09:16.679 and disruptive. In October, Uber Cab received a one point 0:09:16.760 --> 0:09:21.360 to five million dollars in an investment round, and that's 0:09:21.360 --> 0:09:24.360 also when the company would drop the cab from its 0:09:24.440 --> 0:09:27.959 name and just become Uber. But the company also got 0:09:28.000 --> 0:09:31.599 a cease and desist order from the Public Utilities Commission 0:09:31.800 --> 0:09:36.160 of California, and the reason was because the organization accused 0:09:36.240 --> 0:09:39.240 Uber of acting as a cab company without the proper 0:09:39.320 --> 0:09:43.720 licensing to do so. In other words, Uber was performing 0:09:43.880 --> 0:09:47.040 a service that was identical to that of taxi cabs, 0:09:47.080 --> 0:09:50.439 but not having to obey the same rules that taxicabs 0:09:50.520 --> 0:09:53.720 did so for the time being, Uber had to be 0:09:53.760 --> 0:09:57.480 put out of commission in San Francisco uh In November 0:09:57.520 --> 0:10:02.640 twenty Uber becomes available for Android device, and in February eleven, 0:10:02.760 --> 0:10:06.000 the company would receive eleven million dollars from another round 0:10:06.000 --> 0:10:09.320 of investments. A few months later, in May, Uber would 0:10:09.360 --> 0:10:13.760 go live in New York City. In September eleven, Uber 0:10:13.880 --> 0:10:16.679 landed itself in some hot water with journalists. It was 0:10:16.720 --> 0:10:19.480 revealed that Uber has a sort of overview of the 0:10:19.679 --> 0:10:22.400 entire system within a region, and some people were calling 0:10:22.400 --> 0:10:26.000 it the God view. It shows the names and locations 0:10:26.000 --> 0:10:29.720 of all the Uber users in that area. So remember 0:10:29.800 --> 0:10:33.640 Uber is using the location data of your phone and 0:10:33.679 --> 0:10:37.000 then broadcasts set to Uber so that drivers can find you. 0:10:37.520 --> 0:10:40.360 But that also means that the system knows where you 0:10:40.400 --> 0:10:44.000 are when you are using the Uber app, So if 0:10:44.040 --> 0:10:46.160 you were able to access this view, you can see 0:10:46.160 --> 0:10:50.280 where all the Uber users are in that area. It 0:10:50.360 --> 0:10:52.079 was meant to be an internal tool, but they did 0:10:52.120 --> 0:10:54.680 start showing it off in a party at Chicago, and 0:10:54.720 --> 0:10:59.160 that really started off some trouble. Also, one Uber executive 0:10:59.160 --> 0:11:02.240 apparently sent a message to a journalist who requested an 0:11:02.280 --> 0:11:05.960 Uber ride so because the Uber executive executive could see 0:11:06.000 --> 0:11:08.520 where the journalist was and how the journalist was active, 0:11:09.240 --> 0:11:11.960 the executive sent a message saying, hey, won't you write 0:11:11.960 --> 0:11:15.079 a story about Uber. Essentially, they were using the god 0:11:15.160 --> 0:11:18.160 view to keep tabs on the journalist and that kind 0:11:18.160 --> 0:11:23.400 of backfired. UH. That seemed to be a violation of privacy, 0:11:23.480 --> 0:11:25.560 and since then Uber has said that it has placed 0:11:25.679 --> 0:11:29.640 strict limits on who can view that particular data. So 0:11:29.679 --> 0:11:32.079 this is not something that people can easily see now, 0:11:32.120 --> 0:11:36.040 at least according to Uber. And Uber got another shot 0:11:36.080 --> 0:11:40.680 of investments in December eleven. They raised thirty seven million 0:11:40.720 --> 0:11:45.960 dollars and also launched service in Seattle, Boston, Chicago, Washington, 0:11:46.320 --> 0:11:49.720 d C. And Paris. So they launched service in the 0:11:49.760 --> 0:11:54.560 city where the idea for Uber was first born. In 0:11:54.640 --> 0:11:59.680 April of twelve, Uber launched Uber x and that's what 0:11:59.720 --> 0:12:03.000 allows people to become Uber drivers using their own personal 0:12:03.080 --> 0:12:05.480 vehicles at a lower rate than what you'd find with 0:12:05.520 --> 0:12:08.640 a taxi or with other Uber services whey're using black 0:12:08.679 --> 0:12:13.240 cars or SUVs or other upscale vehicles. The company also 0:12:13.320 --> 0:12:15.760 launched a feature in which you could use Uber to 0:12:15.880 --> 0:12:20.280 hail an official taxicab in markets like Chicago. So in 0:12:20.400 --> 0:12:23.280 some markets you can use Uber to get a regular 0:12:23.360 --> 0:12:27.280 cab uh and uh instead of an Uber driver, and 0:12:27.320 --> 0:12:29.360 in some markets that actually makes sense. I'll talk more 0:12:29.360 --> 0:12:33.640 about that in a second. In November twelve, Uber caught 0:12:33.720 --> 0:12:36.640 some flack for its surge pricing, which had been an 0:12:36.640 --> 0:12:40.400 issue already. Surge pricing was really Uber's way and still 0:12:40.559 --> 0:12:45.080 is Uber's way of managing the balance between supply and demand. 0:12:45.920 --> 0:12:49.360 So if demand is really high, surge pricing kicks in 0:12:49.520 --> 0:12:52.760 and the price for Uber services goes up as well, 0:12:53.120 --> 0:12:56.400 at least until the supply ends up coming closer to 0:12:56.480 --> 0:13:00.000 the demand. In other words, if the demand is really high, 0:13:00.040 --> 0:13:03.040 surge pricing goes up. Other Uber drivers might end up 0:13:03.200 --> 0:13:06.200 entering that area in order to take advantage of that 0:13:06.280 --> 0:13:10.160 surge pricing, because Uber drivers make more if the prices 0:13:10.160 --> 0:13:14.559 are higher. But as supply ends up meeting the same 0:13:14.640 --> 0:13:18.440 as demand, then the prices come down. It's very much 0:13:18.480 --> 0:13:23.679 reactive to that. Well. During emergency situations, the demand can 0:13:23.679 --> 0:13:25.880 be very high and supply can be very low, and 0:13:25.960 --> 0:13:31.360 that can end up creating a difficult and sometimes um 0:13:31.480 --> 0:13:37.400 well certainly discriminatory pricing in the wake of pretty awful situations, 0:13:38.520 --> 0:13:41.040 one of those being when Hurricane Sandy hit New York. 0:13:41.360 --> 0:13:45.640 It was a very severe weather pattern that moved through 0:13:46.080 --> 0:13:49.120 and hit New York much harder than anyone had anticipated, 0:13:49.679 --> 0:13:53.320 and as a result, surge prices went way up in 0:13:53.400 --> 0:13:57.840 New York after Sandy was moving through. Now Uber responded 0:13:57.920 --> 0:14:00.800 by waiving the surge pricing for aids in the wake 0:14:00.880 --> 0:14:04.520 of Sandy, and they also let drivers take home the 0:14:04.760 --> 0:14:09.040 entire fair. Now Uber usually takes a commission off affairs. 0:14:09.600 --> 0:14:12.079 Typically in the early days it was something like twenty percent, 0:14:12.280 --> 0:14:15.280 meaning the driver would have eight percent of what they 0:14:15.280 --> 0:14:17.320 made that day and the other twenty percent would go 0:14:17.360 --> 0:14:19.840 to Uber. That has actually changed over time, and I'll 0:14:19.880 --> 0:14:22.480 get to that in a little bit. Around that same time, 0:14:22.520 --> 0:14:27.160 in two thousand twelve, late Uber was fined twenty thousand 0:14:27.160 --> 0:14:31.760 dollars by the California Public Utilities Commission CPUC, in other words, 0:14:31.960 --> 0:14:36.600 for operating an unlicensed taxi and limousine dispatch service. Those 0:14:36.640 --> 0:14:39.560 fines would never be collected upon because Uber and the 0:14:39.560 --> 0:14:43.760 Commission would strike a deal in early allowing Uber to 0:14:43.800 --> 0:14:48.880 operate in California in return for following certain regulations. In 0:14:48.880 --> 0:14:52.280 the summer of the rival service, Lift was starting to 0:14:52.320 --> 0:14:54.840 get in some serious attraction. They were really starting to 0:14:54.840 --> 0:14:58.080 take off. Lift had been around since twenty twelve, and 0:14:58.240 --> 0:15:01.120 Uber had also had to face a battle on many 0:15:01.200 --> 0:15:04.000 fronts as various cities and regions began to react to 0:15:04.040 --> 0:15:08.920 its business model and you know, protest moving into those markets. 0:15:09.560 --> 0:15:12.160 The company at that time was valued at three point 0:15:12.280 --> 0:15:18.680 seven billion with a B dollars. In September, California would 0:15:18.680 --> 0:15:21.920 become the first state to regulate what is called ride 0:15:22.080 --> 0:15:25.760 sharing services. Here's where I take a moment to say, 0:15:25.840 --> 0:15:29.239 I don't like the idea of calling these ride sharing services. 0:15:29.280 --> 0:15:32.000 I think of ride sharing services as a means to 0:15:32.120 --> 0:15:36.320 allow people to car pool. In other words, so if 0:15:36.360 --> 0:15:39.880 I'm going to a concert maybe and I say, hey, 0:15:39.920 --> 0:15:42.360 I'm going to this concert. I've got a card seats 0:15:42.560 --> 0:15:44.960 about twenties, so come along and bring your jukebox money, 0:15:45.200 --> 0:15:47.520 people can put in an app saying hey, I'm also 0:15:47.520 --> 0:15:49.120 going to that concert. Can you pick me up? And 0:15:49.120 --> 0:15:50.720 if it's on my way, I can do that. I 0:15:50.760 --> 0:15:53.840 think of that as ride sharing. You are literally sharing 0:15:53.880 --> 0:15:57.720 a ride, whereas with uber x you are using your 0:15:57.720 --> 0:16:00.200 own personal vehicle. If you're an uber x dry, where 0:16:00.200 --> 0:16:03.760 you're using your own car to drive people around. That's 0:16:03.760 --> 0:16:06.480 not really ride sharing. It's still kind of more like 0:16:06.840 --> 0:16:10.000 hailing a cab. It's just in this case it's not 0:16:10.040 --> 0:16:14.200 a cab. It's someone's personal car. But it's not ride sharing. 0:16:14.240 --> 0:16:17.080 I would argue, in fact, I think this whole share 0:16:17.080 --> 0:16:20.680 based economy is a misnomer. But that's an episode for 0:16:20.760 --> 0:16:24.400 another time. At any rate, California passes rules in two 0:16:24.400 --> 0:16:29.080 thousand thirteen in September that require Uber drivers and other 0:16:29.240 --> 0:16:32.200 drivers drivers of other services that are similar to Uber 0:16:32.560 --> 0:16:36.080 to undergo a criminal background check, They have to pass 0:16:36.120 --> 0:16:38.800 a training program, they have to obtain a permit from 0:16:38.840 --> 0:16:42.880 the CPUC before driving for any of those companies, and 0:16:42.920 --> 0:16:47.040 the companies themselves have to offer insurance coverage of the vehicles, 0:16:47.120 --> 0:16:50.040 and that put Uber closer to the level of taxi service. 0:16:50.480 --> 0:16:54.400 And in addition, the CPUC demands one third of one 0:16:54.520 --> 0:16:59.400 percent of the total revenues as fees. UH the various 0:16:59.520 --> 0:17:02.960 cars are his companies saw this as a victory, the 0:17:03.000 --> 0:17:08.840 ability to have a legitimate claim to operating in those 0:17:09.000 --> 0:17:13.040 environments now. The following month, Uber made a deal with 0:17:13.080 --> 0:17:17.639 a few auto manufacturers like Toyota and GM, and also 0:17:17.720 --> 0:17:21.320 with auto financing companies to make it easier for prospective 0:17:21.440 --> 0:17:25.000 Uber drivers to get favorable financing rates on vehicles when 0:17:25.040 --> 0:17:28.080 purchasing a car. So this was a strategic move on 0:17:28.240 --> 0:17:31.919 Uber's part to attract more drivers to work with the 0:17:31.960 --> 0:17:36.600 service because they were seeing escalating demand in various markets 0:17:36.800 --> 0:17:39.320 and that meant that surge pricing was hitting all the 0:17:39.359 --> 0:17:42.000 time because there weren't enough drivers to meet that demand, 0:17:42.600 --> 0:17:45.159 and that meant that the people who were asking for 0:17:45.480 --> 0:17:50.159 rides were getting these crazy surge prices tacked on, and 0:17:50.200 --> 0:17:51.960 they didn't like that. They didn't want to take the 0:17:52.240 --> 0:17:55.439 they didn't want to use the service because why use 0:17:55.480 --> 0:17:57.800 a service that's so much more expensive than just taking 0:17:57.840 --> 0:18:01.240 a cab. So there was a real incentive on Uber's 0:18:01.280 --> 0:18:04.080 part to get more drivers into these markets in order 0:18:04.119 --> 0:18:07.800 to meet the demand that was already there. So they 0:18:07.920 --> 0:18:12.240 ended up making these partnerships, and Klinik said that a 0:18:12.359 --> 0:18:15.359 fully utilized vehicle on Uber would grows more than a 0:18:15.440 --> 0:18:20.080 hundred thousand dollars per year. Later estimations had at a 0:18:20.119 --> 0:18:22.440 lower rate, but at this time he said about a 0:18:22.520 --> 0:18:24.800 hundred thousand dollars per year if it was quote unquote 0:18:24.840 --> 0:18:28.320 fully utilized. What that means I don't know, I imagine 0:18:28.359 --> 0:18:32.560 at least forty hours a week. But using that information 0:18:33.040 --> 0:18:37.720 and coming from Kalinnick himself, UH, the car financing companies 0:18:37.760 --> 0:18:41.800 in the car manufacturers were able to leverage and or 0:18:42.359 --> 0:18:46.000 able to look at better deals for prospective Uber drivers. 0:18:46.040 --> 0:18:47.760 So if you wanted to drive for Uber and you 0:18:47.800 --> 0:18:50.920 went forward trying to purchase a car this way, you 0:18:50.920 --> 0:18:54.520 would actually get really favorable rates. And klin Nick estimated 0:18:54.600 --> 0:18:57.440 that the preferential rates would actually result in a hundred 0:18:57.440 --> 0:19:01.159 to two hundred dollars in savings on car ements per month. 0:19:02.119 --> 0:19:06.520 So having less to pay was a big incentive if 0:19:06.560 --> 0:19:09.280 you were already thinking about driving, and keeping in mind 0:19:09.320 --> 0:19:11.800 that these Uber x drivers are using their own vehicles, 0:19:11.800 --> 0:19:15.360 they have to purchase those vehicles and maintain those vehicles, 0:19:15.400 --> 0:19:20.160 so this was a necessary incentive. In March two thousand fourteen, 0:19:20.840 --> 0:19:24.440 Uber announced an insurance plan that would cover drivers when 0:19:24.440 --> 0:19:27.000 there are no passengers in the car, and this would 0:19:27.040 --> 0:19:30.000 be an extension of personal coverage that drivers were already 0:19:30.000 --> 0:19:32.400 required to have in order to be an Uber x driver, 0:19:33.160 --> 0:19:35.160 So this was to kind of add a little more 0:19:35.200 --> 0:19:37.480 protection to those drivers. This this was in the wake 0:19:37.560 --> 0:19:42.080 of some pretty tragic circumstances where an Uber driver struck 0:19:42.160 --> 0:19:48.400 and killed a pedestrian. Very tragic story, but Uber had 0:19:48.440 --> 0:19:52.119 maintained that the the incident when it happened, the Uber 0:19:52.200 --> 0:19:55.200 driver was not carrying a fair nor was the Uber 0:19:55.280 --> 0:19:59.000 driver responding to a fair request at that exact moment. 0:20:00.040 --> 0:20:03.959 In May two thousand fourteen, Travis Kalinnik spoke at the 0:20:04.119 --> 0:20:08.679 CODE Conference and revealed Uber's long term plan is to 0:20:08.720 --> 0:20:12.080 switch to autonomous vehicles, which we mean they would replace 0:20:12.160 --> 0:20:15.880 human drivers, the cars would drive themselves. He talked about 0:20:15.880 --> 0:20:18.880 the future in which car ownership would be increasingly rare, 0:20:18.960 --> 0:20:22.879 particularly for dense urban environments, and in those places, instead 0:20:22.920 --> 0:20:24.880 of owning a car, you just call for a car 0:20:24.960 --> 0:20:27.639 whenever you needed one, and it would arrive within thirty 0:20:27.680 --> 0:20:29.600 seconds and then take you to where you're you needed 0:20:29.640 --> 0:20:32.520 to be efficiently and safely, and you wouldn't need a 0:20:32.600 --> 0:20:36.560 space for your own car, because why would you ever 0:20:36.600 --> 0:20:38.840 own one. You you could have that space set aside 0:20:38.840 --> 0:20:43.280 for something else, And cars usually sit idle like nine 0:20:43.280 --> 0:20:46.399 percent of the time. You aren't in your car that 0:20:46.560 --> 0:20:49.920 frequently in the grand scheme of things, So why would 0:20:49.920 --> 0:20:53.120 you pay for something that you only use ten percent? 0:20:53.200 --> 0:20:55.520 Of the time you own it and you have to 0:20:55.560 --> 0:20:58.000 pay for the place to keep it, especially if you're 0:20:58.000 --> 0:20:59.560 in a living in a place like New York City, 0:20:59.640 --> 0:21:02.919 where the payment for a car parking spot might be 0:21:03.000 --> 0:21:05.879 the same as an apartment in other parts of the world. 0:21:06.720 --> 0:21:12.240 So it's a pretty powerful argument. Uh. It also suggests 0:21:12.240 --> 0:21:15.840 that Uber is not terribly concerned with what their drivers 0:21:15.840 --> 0:21:18.280 think of the the company in the long term, but 0:21:18.840 --> 0:21:22.119 the public image of Uber has been something of a 0:21:22.200 --> 0:21:29.880 problem area for its entire existence. Anyway, This only makes sense, obviously, 0:21:30.000 --> 0:21:33.360 if the amount you would spend on car rides through 0:21:33.400 --> 0:21:35.680 the service would be less than what you would spend 0:21:35.720 --> 0:21:39.679 on the ownership and maintenance of a vehicle. So I 0:21:39.720 --> 0:21:41.720 guess in the very long run, if you were to 0:21:41.800 --> 0:21:45.359 keep a car for a very very long time, then 0:21:45.480 --> 0:21:48.000 you could argue that the personal car ownership makes more 0:21:48.040 --> 0:21:50.800 sense because you are getting the most out of that vehicle, 0:21:51.160 --> 0:21:54.760 and that's less common today than it was twenty years ago. 0:21:55.240 --> 0:21:57.240 So I don't know that you can make that argument 0:21:57.240 --> 0:21:59.920 as effectively today at any rate. Klan Nick says the 0:22:00.400 --> 0:22:02.239 real reality of such a day is quite a long 0:22:02.280 --> 0:22:06.840 ways off, but it is inevitable we will get there. 0:22:07.640 --> 0:22:10.600 And this address that he gave at the CODE conference 0:22:10.640 --> 0:22:12.960 came not long after Uber had released a report that 0:22:13.000 --> 0:22:16.760 claimed Uber drivers would make much more money than cab 0:22:16.840 --> 0:22:19.800 drivers would now. According to that report, a cab driver's 0:22:19.800 --> 0:22:22.680 salary was around the thirty thousand dollar per year mark, 0:22:22.760 --> 0:22:24.960 and Uber said the median wage for a New York 0:22:25.000 --> 0:22:27.800 based Uber x driver who works at least forty hours 0:22:27.840 --> 0:22:31.920 per week is ninety thousand, seven d sixty six dollars 0:22:31.960 --> 0:22:35.840 per year. In San Francisco it was seventy four thousand 0:22:37.200 --> 0:22:40.439 dollars per years. So obviously the amount you make was 0:22:41.080 --> 0:22:45.119 relied heavily upon where you actually work, and that doesn't 0:22:45.520 --> 0:22:48.840 factor into account the expenses the driver would incur in 0:22:48.920 --> 0:22:53.800 owning and operating and maintaining that vehicle. So those those 0:22:53.840 --> 0:22:56.840 figures don't indicate like how much did the car cost, 0:22:56.960 --> 0:22:59.280 how much did it cost to fuel the vehicle or 0:22:59.359 --> 0:23:01.520 park the vehic goal when you weren't using it, or 0:23:01.960 --> 0:23:04.199 just take it in for tuneups. None of that is 0:23:04.240 --> 0:23:07.840 factored into that that revenue, so keep that in mind too. 0:23:08.680 --> 0:23:11.720 In June two thousand fourteen, Uber announced another round of funding. 0:23:11.760 --> 0:23:14.400 In that time, it was truly huge, as in one 0:23:14.440 --> 0:23:18.960 point to billion dollars, and at that point the company 0:23:19.080 --> 0:23:23.720 was valued at seventeen billion dollars, so definitely on a 0:23:23.800 --> 0:23:28.320 stress spurc rise and we're not done yet. In August 0:23:28.320 --> 0:23:32.800 two thousand fourteen, that's when we had the the publication 0:23:33.040 --> 0:23:36.720 of all the stories of the great Uber versus Left war. 0:23:37.800 --> 0:23:41.359 So during August we started seeing lots of reports of 0:23:41.840 --> 0:23:46.480 one side accusing the other shenanigans. Most of the accusations 0:23:46.520 --> 0:23:51.320