WEBVTT - The Uber Story Part Two 0:00:04.480 --> 0:00:12.840 Technology with tech Stuff from half stuff works dot com. 0:00:12.840 --> 0:00:15.800 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.920 --> 0:00:19.320 Jonathan Strickland. I'm an executive producer here at how stuff 0:00:19.320 --> 0:00:21.440 Works and I love all things tech. And in our 0:00:21.560 --> 0:00:25.160 last episode, I talked about the founding of Uber and 0:00:25.200 --> 0:00:28.880 how it went from idea to a working service. I 0:00:28.920 --> 0:00:32.240 also touched on why Uber and other ride hailing apps 0:00:32.240 --> 0:00:37.600 have faced criticism and resistance from various cities and transportation agencies. Today, 0:00:37.760 --> 0:00:40.280 we're going to look at a few other noteworthy elements 0:00:40.320 --> 0:00:43.800 of Uber's history, and then we're really going to take 0:00:43.840 --> 0:00:46.240 a deep look at what happened to the company during 0:00:46.400 --> 0:00:51.840 two thousand seventeen, because boy howdy, was that a crazy year. Now, 0:00:51.880 --> 0:00:54.480 one thing I did not cover in the previous episode 0:00:54.520 --> 0:00:58.840 was Uber's surge pricing model. So Uber uses algorithms that 0:00:59.000 --> 0:01:03.120 dynamically a just fair prices. When user demand is greater 0:01:03.200 --> 0:01:05.720 than what the current Uber drivers on the road can supply, 0:01:06.240 --> 0:01:09.759 the algorithm starts to crank up the cost of fares. Now, 0:01:09.840 --> 0:01:13.520 not only can this curtailed demand, which alleviates stress on 0:01:13.560 --> 0:01:17.520 the system and also creates an incentive for off the 0:01:17.560 --> 0:01:20.039 clock drivers, they get a little notification that says, hey, 0:01:20.040 --> 0:01:23.440 surge pricing is an effect that means that they are 0:01:23.480 --> 0:01:25.399 more likely to go hit the roads and start picking 0:01:25.440 --> 0:01:28.839 up some of those fares, and as the supply starts 0:01:28.880 --> 0:01:33.120 to meet demand, the surge pricing prices come down. Meanwhile, 0:01:33.480 --> 0:01:36.319 while surge prices are in effect, drivers are making more money. 0:01:36.400 --> 0:01:39.559 They get to keep more money because the affairs are higher. 0:01:39.600 --> 0:01:43.679 But the practice has prompted a backlash whenever its spirals 0:01:43.680 --> 0:01:46.479 out of control. So for example, on New Year's Eve 0:01:46.560 --> 0:01:49.720 two thousand and eleven, surge pricing drove fares up to 0:01:49.880 --> 0:01:53.800 seven times the standard rate or even higher in some areas, 0:01:54.040 --> 0:01:56.240 which would mean if you were taking a trip that 0:01:56.280 --> 0:01:59.600 would normally cost ten dollars, that same trip would suddenly 0:01:59.600 --> 0:02:03.440 cost you seventy dollars. In two thousand thirteen, Uber would 0:02:03.480 --> 0:02:06.200 really get dragged over the coals for surge pricing when 0:02:06.240 --> 0:02:09.960 New Yorkers in a snowstorm saw steep surge prices hit 0:02:10.000 --> 0:02:13.120 the service, and that motivated Uber executives to promise they 0:02:13.120 --> 0:02:17.000 would cap surge pricing during things like blizzards and floods 0:02:17.040 --> 0:02:23.040 and other similar events. In May, Lift launched a beta 0:02:23.120 --> 0:02:26.839 test of its ride hailing service, in San Francisco. Now. 0:02:26.880 --> 0:02:30.160 The company behind Lift is zim Ride, which is a 0:02:30.200 --> 0:02:32.880 network that connects people who wish to car pool with 0:02:32.919 --> 0:02:35.560 each other. So, in other words, zim Right is what 0:02:35.639 --> 0:02:39.320 I would call an honest to goodness ride sharing platform. 0:02:39.680 --> 0:02:43.200 It lets people share rides with one another. While services 0:02:43.240 --> 0:02:47.600 like Uber and Lift have been called ride sharing companies, 0:02:47.720 --> 0:02:50.480 often by themselves, I would argue that's not really a 0:02:50.520 --> 0:02:54.320 fair designation. Ride sharing to me suggests that the driver 0:02:54.520 --> 0:02:56.840 is heading to a general location and is happy to 0:02:56.840 --> 0:02:58.920 give a lift to someone else who also wants to 0:02:58.960 --> 0:03:01.679 go that way. But what Uber and Lift do is 0:03:01.720 --> 0:03:04.240 allow you to hail a ride and to direct a 0:03:04.320 --> 0:03:07.200 driver to a specific destination that he or she may 0:03:07.240 --> 0:03:10.120 not have been going toward otherwise. So I think of 0:03:10.200 --> 0:03:14.000 that as a ride hailing company, not a ride sharing company. 0:03:14.120 --> 0:03:16.240 And you might argue that this is all semantics, but 0:03:16.360 --> 0:03:18.639 it turns out the ends up being really important when 0:03:18.639 --> 0:03:22.800 you're looking at stuff like legislation. Anyway, in two thousand twelve, 0:03:23.160 --> 0:03:27.440 zim Ride launched Lift. Their model was a slightly peculiar 0:03:27.520 --> 0:03:31.480 one designed specifically to get around issues with regulation and licensing. 0:03:31.560 --> 0:03:35.960 So it's not that I feel super cuddly toward Lift, 0:03:36.040 --> 0:03:38.640 but I do acknowledge that they had a slightly different 0:03:38.680 --> 0:03:41.440 way of going about things. Rather than set a fee 0:03:41.480 --> 0:03:44.280 and return for a ride, drivers would get what Lift 0:03:44.360 --> 0:03:47.400 was calling a donation from the rider. Lift would give 0:03:47.440 --> 0:03:52.680 a uh suggested donation, and typically that was about thirty 0:03:52.680 --> 0:03:55.040 percent less than what it would cost you to take 0:03:55.080 --> 0:03:58.760 a cab to that same place. Lift also built in 0:03:58.840 --> 0:04:01.880 a tipping feature in its app, allowing writers to add 0:04:01.920 --> 0:04:04.480 a tip to their payments, something that Uber would not 0:04:04.640 --> 0:04:09.720 offer until John Zimmer, the chief operating officer for Left, 0:04:09.960 --> 0:04:13.680 told All Things d that quote. I'm sure people will 0:04:13.680 --> 0:04:16.960 get upset about more competition, but our understanding is that 0:04:17.000 --> 0:04:20.880 when it's ride sharing, you can use your personal insurance policy. 0:04:21.120 --> 0:04:23.919 As for regulation, a lot of state laws are supportive 0:04:23.960 --> 0:04:26.760 of car pooling and ride sharing and want to make 0:04:26.800 --> 0:04:30.960 that work. End quote. Now, again, that seems like people 0:04:30.960 --> 0:04:33.520 were playing a little fast and loose with definitions in 0:04:33.600 --> 0:04:36.800 order to turn them to their advantage. Of course, a 0:04:36.839 --> 0:04:40.280 lot of areas want to encourage car pooling in order 0:04:40.320 --> 0:04:44.520 to alleviate traffic congestion. But that suggests that you are 0:04:44.560 --> 0:04:46.440 having a group of people who are all going to 0:04:46.480 --> 0:04:51.160 the same place anyway, and you just consolidate them into 0:04:51.600 --> 0:04:54.520 a single vehicle, as opposed to each taking their own cars. 0:04:55.480 --> 0:04:57.360 I would argue that Uber and Lift don't do that 0:04:57.440 --> 0:05:00.240 because you have the drivers on the road already, But 0:05:00.440 --> 0:05:03.520 it can help alleviate traffic if otherwise the people who 0:05:03.520 --> 0:05:06.920 are taking Lift or Uber would be driving themselves. Still, 0:05:07.080 --> 0:05:11.000 that's neither here nor there. Lift and Uber would engage 0:05:11.040 --> 0:05:14.080 in a really bitter rivalry over the years. That's still 0:05:14.120 --> 0:05:17.160 going on today, obviously, and that rivalry has had a 0:05:17.160 --> 0:05:21.240 few scandals associated with it. In two thousand fourteen, news 0:05:21.240 --> 0:05:24.200 outlets began to cover the ways that the two companies 0:05:24.200 --> 0:05:28.480 were waging war against each other. Forbes reported that Uber 0:05:28.600 --> 0:05:32.360 was offering Lift drivers big bonuses to jump ship and 0:05:32.400 --> 0:05:35.839 work for Uber instead of Lift. Lift reportedly was following 0:05:35.880 --> 0:05:39.720 suit shortly thereafter, creating something of a bidding war for drivers, 0:05:40.080 --> 0:05:42.560 and both sides were accused of setting up rides with 0:05:42.600 --> 0:05:46.279 their rivals in order to try and recruit drivers, or worse, 0:05:46.480 --> 0:05:49.360 to arrange a ride and then cancel it after a 0:05:49.440 --> 0:05:53.520 driver had already accepted the assignment, which would end up 0:05:53.600 --> 0:05:57.560 jamming the system for both companies, with reportedly thousands of 0:05:57.600 --> 0:06:01.719 bogus car requests hitting Both drivers were in the middle 0:06:01.760 --> 0:06:05.839 of this, both as pawns and as victims. Uber and Lift, 0:06:05.880 --> 0:06:09.559 in an attempt to hurt the other competitor, would lower 0:06:09.640 --> 0:06:12.239 their fare prices on their services so they would attract 0:06:12.320 --> 0:06:15.560 more customers, saying, hey, our prices are lower than Ubers, 0:06:15.680 --> 0:06:18.200 or our prices are lower than Lifts, which was great 0:06:18.320 --> 0:06:21.359 if you're a customer, but terrible if you're a driver, 0:06:21.520 --> 0:06:23.679 because it meant that the drivers were taking home less 0:06:23.720 --> 0:06:27.520 money on every ride, and the drivers were worrying that 0:06:27.560 --> 0:06:31.039 customers would get used to those lower fares, meaning that 0:06:31.160 --> 0:06:33.800 if one company were to win out over the other one, 0:06:33.880 --> 0:06:36.080 there still would be an incentive to keep the fares 0:06:36.080 --> 0:06:40.000 really low, because otherwise you could upset your customers. And 0:06:40.080 --> 0:06:42.080 so they were worried that they were setting a precedent 0:06:42.640 --> 0:06:45.000 that was ultimately going to hurt drivers in the long 0:06:45.120 --> 0:06:49.040 run and make it less uh less, make less economic 0:06:49.120 --> 0:06:52.680 sense actually drive for the companies. Now back to Uber's 0:06:52.720 --> 0:06:56.720 timeline and back to two thousand twelve. Starting that summer, 0:06:57.160 --> 0:07:00.320 Uber began to stretch beyond partnering with driver was of 0:07:00.400 --> 0:07:04.839 town cars and limousines. The company introduced a news service 0:07:05.120 --> 0:07:09.400 called Uber X, and this service included the option to 0:07:09.400 --> 0:07:12.640 be picked up in a hybrid car like the Toyota Prius, 0:07:12.760 --> 0:07:16.320 or in an suv or a couple of other options. 0:07:16.360 --> 0:07:20.840 The fairs for those vehicles, on average were thirty lower 0:07:20.960 --> 0:07:22.960 than if you were to try and get a town 0:07:23.000 --> 0:07:25.960 car or a limo. So it was to kind of 0:07:26.000 --> 0:07:29.240 open up the platform to both more drivers and more 0:07:29.360 --> 0:07:32.400 riders to be more attractive for folks who you know, 0:07:32.720 --> 0:07:35.600 didn't necessarily need to roll up in a town car 0:07:35.720 --> 0:07:39.160 or a limo. Also, at that time, it was already 0:07:39.720 --> 0:07:41.880 pretty clear that they were going to have to make 0:07:41.920 --> 0:07:45.080 some adjustments because Lincoln was no longer making the town car, 0:07:45.280 --> 0:07:49.240 so they had to figure something out otherwise their fleet 0:07:49.280 --> 0:07:51.920 of vehicles would get progressively older and there will be 0:07:52.000 --> 0:07:56.520 no replacement for them now. Kala Nick was quick to 0:07:56.720 --> 0:08:00.520 dismiss claims that this turned Uber into a taxi service. 0:08:00.600 --> 0:08:04.320 He actually told tech Crunch, the difference is that you 0:08:04.360 --> 0:08:07.360 can also hail a taxi with an Uber you have 0:08:07.400 --> 0:08:11.120 a prearranged situation, you have the driver's name and phone number, 0:08:11.200 --> 0:08:14.880 end quote, and that distinction seems pretty flimsy to me. 0:08:14.960 --> 0:08:16.880 But I'm not an expert in this area by any 0:08:16.960 --> 0:08:19.880 stretch of the imagination. It is true that when you 0:08:19.920 --> 0:08:23.720 hail a taxi, you typically have no idea which driver 0:08:23.920 --> 0:08:27.040 is going to arrive, what is or her name is, 0:08:27.240 --> 0:08:30.040 or how to contact them directly, because you're generally working 0:08:30.080 --> 0:08:32.400 through the taxi company. If you haven't just hailed them 0:08:32.440 --> 0:08:35.240 on the street and you've called a taxi cab company, 0:08:35.240 --> 0:08:37.560 it's the dispatcher that's doing all of this for you, 0:08:38.160 --> 0:08:39.960 and the company ends up taking care of all that 0:08:40.040 --> 0:08:43.120 communication and you just stay out of the loop. But 0:08:43.160 --> 0:08:45.480 I'm not sure that that difference is significant enough to 0:08:45.480 --> 0:08:48.280 dismiss the argument that Uber was operating pretty much like 0:08:48.360 --> 0:08:53.800 a taxi service. Now, in September, California would become the 0:08:53.840 --> 0:08:58.080 first state to regulate services like Uber and Lift. According 0:08:58.120 --> 0:09:00.840 to those regulations, drivers would first have to obtain a 0:09:00.880 --> 0:09:04.760 permit from the cpu CE the California Public Utilities Commission 0:09:05.080 --> 0:09:08.520 before being allowed to work for a ride hailing company. 0:09:08.840 --> 0:09:12.599 The regulations also standardized criminal background checks and required the 0:09:12.640 --> 0:09:16.560 companies to offer insurance coverage for their drivers. The CPUC 0:09:16.679 --> 0:09:19.720 would also collect a third of a percent of total 0:09:19.760 --> 0:09:23.560 revenues in fees as a result of all this. Meanwhile, 0:09:24.040 --> 0:09:27.360 Uber was forming partnerships with several auto manufacturers to create 0:09:27.400 --> 0:09:31.400 a program that would reduce car ownership costs for Uber drivers, 0:09:31.800 --> 0:09:34.080 to try and create another incentive to work for Uber 0:09:34.120 --> 0:09:37.600 as opposed to lift or some other service. Now, two 0:09:37.640 --> 0:09:43.480 thousand fourteen began with a real horrible tragedy. And there 0:09:43.520 --> 0:09:45.960 are a couple of these in this story and uh 0:09:46.240 --> 0:09:48.320 or in this podcast, and it's gonna be tough for me, 0:09:48.360 --> 0:09:50.760 but I'll try and get through it. So an Uber 0:09:50.840 --> 0:09:55.679 driver hit a family that was crossing an intersection crosswalk, 0:09:55.760 --> 0:09:58.520 and in the process, a six year old girl died 0:09:58.920 --> 0:10:02.760 from her injuries. The family of that girl sued Uber 0:10:02.800 --> 0:10:06.320 for damages, but the company fought back and said that 0:10:06.400 --> 0:10:09.599 it wasn't their fault, their insurance shouldn't be held accountable, 0:10:09.600 --> 0:10:12.920 they shouldn't have to cover it because the driver was 0:10:13.000 --> 0:10:16.440 not actively in the process of completing a trip. And 0:10:17.000 --> 0:10:19.960 whilst true he had his app open, his Uber app 0:10:20.000 --> 0:10:22.439 open to look for the next fair, he had not 0:10:22.520 --> 0:10:25.920 yet accepted a new job request at the time of 0:10:25.960 --> 0:10:29.160 the accident, and so Uber was claiming that because this 0:10:29.240 --> 0:10:32.000 was in between picking up and dropping off someone else 0:10:32.320 --> 0:10:36.120 and taking the next job, they were not really responsible 0:10:36.200 --> 0:10:38.839 for this. And they shouldn't be held accountable, and the 0:10:38.920 --> 0:10:43.880 terrible experience led to more serious discussions about corporate liability 0:10:43.960 --> 0:10:47.079 in the wake of accidents. Uber would eventually change his 0:10:47.200 --> 0:10:50.040 policy to say it would cover accidents involving drivers who 0:10:50.080 --> 0:10:52.640 had the app open, even if they were not actively 0:10:52.679 --> 0:10:56.440 transporting someone or had not yet accepted a fair and 0:10:56.480 --> 0:10:59.719 as for that lawsuit, Uber would eventually settle with the 0:10:59.760 --> 0:11:02.720 girl his family out of court for an undisclosed amount. 0:11:03.800 --> 0:11:08.360 In April, Uber branched out from the ride hailing business 0:11:08.600 --> 0:11:13.439 and dipped its toes in bike messenger services, starting in Manhattan. 0:11:14.160 --> 0:11:17.480 This service is called Uber Rush, and the fees begin 0:11:17.559 --> 0:11:20.360 at three dollars as a flat fee, plus four dollars 0:11:20.360 --> 0:11:23.720 per mile traveled by the courier, so a minimum of 0:11:23.760 --> 0:11:27.320 seven dollars for one job. The service would eventually expand 0:11:27.400 --> 0:11:30.520 to Chicago and to San Francisco, and at one point 0:11:30.679 --> 0:11:33.560 it was a really popular option that restaurants were using 0:11:33.600 --> 0:11:37.920 in order to send deliveries to people, but in seventeen 0:11:38.040 --> 0:11:40.840 Uber said that restaurants would no longer be eligible to 0:11:40.960 --> 0:11:43.960 use Uber Rush, and instead they would need to switch 0:11:44.000 --> 0:11:46.840 over to a different program Uber was running. That Uber 0:11:46.880 --> 0:11:50.320 had launched in twenty fifteen called Uber Eats, which is 0:11:50.320 --> 0:11:54.120 an on demand food delivery service. Um It's in several 0:11:54.120 --> 0:11:56.520 cities now, not just the three, not just New York, 0:11:56.559 --> 0:11:59.240 San Francisco, and Chicago. In fact, Atlanta has it as well. 0:12:00.120 --> 0:12:03.600 Rush also still exists still in New York, San Francisco, 0:12:03.600 --> 0:12:05.680 and Chicago, but it's meant for other types of jobs, 0:12:05.800 --> 0:12:11.480 not food delivery. Also was the year that Uber really 0:12:11.520 --> 0:12:15.880 made its first serious steps into China, which ultimately would 0:12:15.880 --> 0:12:20.079 become a quagmire for the company. The temptation to get 0:12:20.120 --> 0:12:23.400 into China was huge because there was enormous potential to 0:12:23.440 --> 0:12:27.679 do incredible amounts of business there. In fact, early reports 0:12:27.679 --> 0:12:30.080 were suggesting that Uber's business in China was going to 0:12:30.120 --> 0:12:34.800 outpace all other markets in the company by a crazy amount. 0:12:34.840 --> 0:12:37.080 Like if you looked at the charts, you would see 0:12:37.080 --> 0:12:41.040 all the figures for China were rocketing skyward while everything 0:12:41.080 --> 0:12:43.720 else was kind of in a steady climb, which was, 0:12:43.840 --> 0:12:46.120 you know, the steady climb is good, but the the 0:12:46.240 --> 0:12:49.240 China numbers were out of this world. But while those 0:12:49.320 --> 0:12:55.120 numbers look great, other issues told a different story. So 0:12:55.200 --> 0:12:58.720 China already had a righte hailing service that was dominating 0:12:58.760 --> 0:13:03.280 the market called d D Shu Shing and like Lift, 0:13:03.520 --> 0:13:07.440 d D competed against Uber by offering bonuses to drivers 0:13:07.480 --> 0:13:11.000 to work on d D service rather than its competitor, 0:13:11.120 --> 0:13:13.360 and both de D and Uber were operating in a 0:13:13.400 --> 0:13:16.599 market that had not yet caught up to this business. 0:13:17.480 --> 0:13:21.760 This is what courts media called a legal gray zone, 0:13:22.400 --> 0:13:26.640 meaning that most cities in China weren't really equipped to 0:13:26.800 --> 0:13:30.400 handle this yet, and no one had quite figured out 0:13:30.559 --> 0:13:34.920 how to regulate or legalize the sort of service, and 0:13:34.960 --> 0:13:36.760 so there were a lot of questions about whether or 0:13:36.800 --> 0:13:39.640 not what d D and Uber were doing would actually 0:13:39.679 --> 0:13:44.840 be legal, and this would continue until when Chinese cities 0:13:44.880 --> 0:13:48.640 began to actually create legislation and regulations for the industry. 0:13:48.679 --> 0:13:52.880 Not long after that happened, d D, Shu Shing and 0:13:53.040 --> 0:13:56.960 Uber would merge in a thirty five billion dollar deal, 0:13:57.040 --> 0:14:00.160 so the new company was evaluated at a thirty five 0:14:00.160 --> 0:14:03.520 billion dollars. D D ended up making a billion dollar 0:14:03.559 --> 0:14:07.720 investment in Uber Global and Uber China's investors, the people 0:14:07.760 --> 0:14:10.240 who had backed Uber's move into China in the first place, 0:14:10.440 --> 0:14:14.600 would receive a ownership of the new company, which all 0:14:14.640 --> 0:14:18.280 sounds pretty great, but really it marked an exit strategy 0:14:18.400 --> 0:14:21.920 for Uber. The company had bet big on getting into 0:14:22.040 --> 0:14:25.760 China and had burned a huge amount of cash competing 0:14:25.760 --> 0:14:28.400 against d D without gaining enough of a foothold for 0:14:28.400 --> 0:14:30.960 the effort to really be profitable. D D had been 0:14:31.000 --> 0:14:34.400 dominating Uber with an eight percent hold on the market 0:14:34.440 --> 0:14:38.000 share for ride haling services in the country, so Uber 0:14:38.080 --> 0:14:42.760 was effectively defeated and dragging itself out of China. In fact, 0:14:42.760 --> 0:14:45.360 if you here, if you read up on the the 0:14:45.560 --> 0:14:49.560 stories of how much money Uber burned through over those years, 0:14:49.960 --> 0:14:52.600 it is an astronomical amount of money. Now, Uber is 0:14:52.640 --> 0:14:56.000 not a publicly traded company and as such it is 0:14:56.000 --> 0:15:00.520 not required to report its earnings to the public. It's 0:15:00.560 --> 0:15:03.040 not like a public filing where you can actually see 0:15:03.360 --> 0:15:07.240 how much a company claims it made versus the expenses. 0:15:07.680 --> 0:15:09.600 But there are a lot of phone calls that have 0:15:09.720 --> 0:15:11.840 to happen with investors, and most of the time that 0:15:11.880 --> 0:15:14.640 information ends up getting communicated to the outside world in 0:15:14.720 --> 0:15:17.760 some way. And because of that, we know that Uber 0:15:17.880 --> 0:15:20.120 was burning through billions of dollars per year. It was 0:15:20.200 --> 0:15:22.560 not making a profit. Some of the cities were said 0:15:22.600 --> 0:15:25.960 to be profitable, but overall, as a company, Uber was 0:15:26.000 --> 0:15:30.400 spending more than it was making. Now. In August, Uber 0:15:30.480 --> 0:15:33.640 announced Uberpool, and this is the service that lets you 0:15:33.720 --> 0:15:35.720 share a ride with someone else going in the same 0:15:35.760 --> 0:15:39.000 general location or direction of travel that you need to take. 0:15:39.520 --> 0:15:42.280 The two parties in the car will split the fair, 0:15:42.400 --> 0:15:44.680 so it ends up being cheaper. And if there aren't 0:15:44.720 --> 0:15:47.480 any other passengers who need to go where you're going 0:15:47.600 --> 0:15:49.560 or go in the same direction that you're going, you 0:15:49.600 --> 0:15:52.880 would still get an Uber ride at a reduced fair. Now, 0:15:52.920 --> 0:15:55.320 when it launched, Uber published a blog post that said, 0:15:55.400 --> 0:15:59.840 quote on average, uber x already costs less than a taxi. 0:16:00.240 --> 0:16:04.600 Imagine reducing that cost by up to another end quote. 0:16:04.800 --> 0:16:10.880 So again, Uber's really playing to the customer there. Now, 0:16:10.920 --> 0:16:15.400 for drivers, it's a different story because you know, you're 0:16:15.880 --> 0:16:19.600 you're talking about cutting into the potential take home pay 0:16:20.360 --> 0:16:24.000 as long as enough people are in the car where 0:16:24.080 --> 0:16:26.720 you know, even though they're each splitting the fair, if 0:16:26.760 --> 0:16:29.600 you add it up, it ends up amounting to a 0:16:29.680 --> 0:16:33.640 decent fee for the trip. It's not that big a deal, 0:16:33.720 --> 0:16:37.160 but it's one of those things that's a delicate balance. 0:16:37.200 --> 0:16:39.280 How do you balance out the needs of the people 0:16:39.400 --> 0:16:43.960 driving for you versus your customer base In two thousand fifteen, 0:16:44.360 --> 0:16:48.200 Uber unveiled Uber Cargo in Hong Kong. Now this was 0:16:48.320 --> 0:16:53.280 really Uber's foray into creating a logistics service. It just 0:16:53.360 --> 0:16:55.600 happened to be a logistics service in the form of 0:16:55.640 --> 0:16:59.440 a rent a van kind of business, but it really 0:16:59.480 --> 0:17:02.760 meant the at Uber was starting to see the potential 0:17:03.360 --> 0:17:07.960 of moving into logistics in general, and not just booking 0:17:08.480 --> 0:17:10.840 a trip from point A to point B. According to 0:17:10.880 --> 0:17:15.120 a blog post, Uber Cargo works like this. With Uber Cargo, 0:17:15.240 --> 0:17:18.000 a van arrives wherever you want it to be in minutes. 0:17:18.080 --> 0:17:19.840 You can load your items in the back of the 0:17:19.920 --> 0:17:22.640 van yourself, or request the driver's assistants if you need 0:17:22.680 --> 0:17:26.040 an extra hand. Deliveries can easily be tracked in real 0:17:26.080 --> 0:17:28.800 time through the app. The item's location can be shared 0:17:28.800 --> 0:17:31.280 with the recipient, and you can even ride along with 0:17:31.280 --> 0:17:33.480 your goods, so you'll have ease of mind that your 0:17:33.560 --> 0:17:37.240 items are safe. A couple of years later, Uber would 0:17:37.320 --> 0:17:40.879 extend that branch of its business and create Uber Freight, 0:17:41.040 --> 0:17:45.760 which connects truck drivers with people who need to uh 0:17:46.000 --> 0:17:50.040 ship stuff a good distance away, So that would be 0:17:50.080 --> 0:17:55.280 an extension of this logistics element of Uber's business. Also 0:17:55.320 --> 0:17:59.360 in Uber was moving to make its first acquisition kind 0:17:59.359 --> 0:18:02.600 of surprising that it took that long in some ways, 0:18:02.640 --> 0:18:05.200 just because a lot of companies that's kind of how 0:18:05.240 --> 0:18:08.359 they would grow early on, instead of just trying to 0:18:08.440 --> 0:18:13.199 increase business, which I say dismissively, but it is actually 0:18:13.200 --> 0:18:16.040 a really really hard thing to do. Some companies gobble 0:18:16.119 --> 0:18:18.280 up other smaller companies and they are able to grow 0:18:18.320 --> 0:18:21.159 that way. In this case, it was Uber's attempt to 0:18:21.440 --> 0:18:24.399 build out its own capabilities and reduce its reliance on 0:18:24.520 --> 0:18:28.560 third parties. The acquisition was Dakarta, which was a mapping 0:18:28.640 --> 0:18:31.280 tech and company. It was a startup company that was 0:18:31.320 --> 0:18:35.800 all about localized data, map applications, turned by turn directions, 0:18:35.840 --> 0:18:38.560 that kind of stuff, and Uber executive said this was 0:18:38.600 --> 0:18:41.320 to streamline operations behind the scenes, but a lot of 0:18:41.359 --> 0:18:44.359 analysts pointed out that it also probably had something to 0:18:44.400 --> 0:18:47.040 do with Uber wanting to decrease its reliance on Google 0:18:47.240 --> 0:18:50.760 and Google Maps. Now, two other big things happened in 0:18:51.880 --> 0:18:54.840 that I really really need to talk about. But first 0:18:55.600 --> 0:19:05.280 let's take a quick break to thank our sponsor. All Right, 0:19:05.400 --> 0:19:08.320 those two other things in that I mentioned before the break. 0:19:08.400 --> 0:19:12.119 The first was that Uber snipe about forty people away 0:19:12.160 --> 0:19:15.520 from Carnegie Mellon University in an effort to establish a 0:19:15.520 --> 0:19:19.560 new robotics research facility. This was when the world learned 0:19:19.560 --> 0:19:22.800 that the Calais vision of Uber's future was one in 0:19:22.800 --> 0:19:27.400 which all those pesky drivers weren't part of the problem anymore. Instead, 0:19:27.440 --> 0:19:30.040 a fleet of autonomous vehicles that would be owned and 0:19:30.119 --> 0:19:33.639 operated by Uber would whisk across cities to pick up 0:19:33.640 --> 0:19:36.600 and drop off people, and best of all, every single 0:19:36.760 --> 0:19:39.679 scent earned would go to the company. There be no 0:19:39.800 --> 0:19:42.480 need to pay a robot a wage, so you didn't 0:19:42.520 --> 0:19:45.480 have to, you know, share the fair with the robots. 0:19:46.320 --> 0:19:49.920 Tipping wouldn't be a consideration either. Now that could mean 0:19:49.920 --> 0:19:53.400 that Uber could slash fair prices too, which would pass 0:19:53.440 --> 0:19:56.240 savings on to the customers. But the focus was mostly 0:19:56.240 --> 0:19:58.560 on how a company that depended upon a population of 0:19:58.640 --> 0:20:02.920 contractors is now actively pursuing a strategy that could ultimately 0:20:02.960 --> 0:20:06.520 render that population moot. Uber had been one of the 0:20:06.560 --> 0:20:10.919 more aggressive companies pursuing an autonomous car future. Many in 0:20:10.960 --> 0:20:14.399 the field give conservative estimates as to win will have 0:20:14.480 --> 0:20:19.160 a truly autonomous vehicle fleet, something that is able to 0:20:19.320 --> 0:20:23.720 handle virtually any scenario that could happen on the roads. Meanwhile, 0:20:24.160 --> 0:20:27.880 Uber has launched pilot programs or maybe I should say 0:20:27.880 --> 0:20:32.240 pilotless programs in a few cities to provide driverless car 0:20:32.359 --> 0:20:35.400 service to test out the feasibility of the strategy. When 0:20:35.440 --> 0:20:37.840 we get to seventeen and a little bit later in 0:20:37.840 --> 0:20:40.800 this episode, i'll talk more about this program and some 0:20:40.840 --> 0:20:43.600 of the concerns people had about it. The other major 0:20:43.640 --> 0:20:47.080 news story happening to Uber in had to do with 0:20:47.119 --> 0:20:51.240 a driver named Barbara and Berwick. Now. Berwick had started 0:20:51.320 --> 0:20:55.399 driving for Uber in the summer, and that fall she 0:20:55.560 --> 0:20:59.680 filed a claim with the California Public Utilities Commission arguing 0:20:59.720 --> 0:21:03.879 that her status as contractor wasn't accurate and that she 0:21:04.000 --> 0:21:08.080 should instead be considered an Uber employee. Being an employee 0:21:08.119 --> 0:21:10.879 meant she would receive more benefits, such as reimbursements to 0:21:10.880 --> 0:21:13.960 the tune of about four thousand dollars of owed expenses. 0:21:14.440 --> 0:21:18.240 The CPUC eventually ruled in her favor, saying she was 0:21:18.400 --> 0:21:22.680 in fact an employee, since that set a precedent at 0:21:22.760 --> 0:21:27.320 Uber and completely would turn their business model topsy turvy. 0:21:27.640 --> 0:21:31.520 The company immediately filed an appeal. Now, Berwick's case did 0:21:31.520 --> 0:21:35.200 not mean that all other Uber drivers in California magically 0:21:35.280 --> 0:21:38.919 transformed into employees. They would have to take their cases 0:21:39.000 --> 0:21:42.520 individually to the cpu C to argue for that designation, 0:21:42.640 --> 0:21:45.560 but a group of them did get together to file 0:21:45.640 --> 0:21:48.959 a class action lawsuit against Uber to make it a 0:21:49.000 --> 0:21:52.399 more broad, sweeping change. And Uber has been fighting that 0:21:52.480 --> 0:21:56.720 court case and it kind of stagnated in the court system. 0:21:56.760 --> 0:22:01.200 The plaintiffs filed a new, updated lawsuit in summer of seventeen, 0:22:01.440 --> 0:22:04.440 and that has yet to be resolved. Alright, so we're 0:22:04.760 --> 0:22:08.280 up to seen and then after that we'll get to 0:22:08.480 --> 0:22:10.840 look at what I'd argue has been Uber's most important 0:22:10.920 --> 0:22:14.240 years so far. But big stuff also happened in sixteen. 0:22:14.600 --> 0:22:18.720 At the beginning of the year, Travis Kalanik addressed investors 0:22:18.840 --> 0:22:22.119 and talked about the expense Uber shouldered as part of 0:22:22.160 --> 0:22:25.680 the battle in China. Analysts estimated that Uber would lose 0:22:25.720 --> 0:22:29.000 about two point eight billion dollars over the course of 0:22:29.040 --> 0:22:34.200 ten even as its valuation would top sixty billion dollars. 0:22:34.200 --> 0:22:37.040 So here's a company that is considered to be worth 0:22:37.160 --> 0:22:41.080 more and more while it's still losing billions of dollars 0:22:41.080 --> 0:22:45.720 of cash, which I know I work for how stuff works. 0:22:46.119 --> 0:22:48.760 But y'all I don't know how that works, all right. 0:22:49.400 --> 0:22:53.560 Uber was battling one class action lawsuit with drivers in California, 0:22:53.600 --> 0:22:56.880 but it also saw a second class action lawsuit come 0:22:56.960 --> 0:22:59.600 to a close. Now, this time it was with passengers. 0:23:00.040 --> 0:23:03.880 This revolved around Uber using certain phrases in their advertising 0:23:03.960 --> 0:23:07.280 language that may have stretched the truth a bit. Phrases 0:23:07.359 --> 0:23:11.400 like referring to its background check process as quote industry 0:23:11.720 --> 0:23:17.360 leading end quote, for example, and passengers were saying there 0:23:17.359 --> 0:23:22.320 were numerous examples of the background checks failing to bring 0:23:22.359 --> 0:23:26.080 out the criminal past of various drivers, or Uber was 0:23:26.119 --> 0:23:28.960 ignoring it. In any case, Saying it was industry leading 0:23:29.040 --> 0:23:32.960 was misleading, and the cost of that mistake was twenty 0:23:33.000 --> 0:23:36.480 eight and a half million dollars. Now that amount was 0:23:36.560 --> 0:23:39.960 divided up among the twenty five million people represented in 0:23:40.000 --> 0:23:44.320