Uber is an interesting case study in the future of work. Uber is a company that is now valued at more than $18 billion where they use technology to enable the crowdsourcing of paid car rides. As of September 16, 2014, the UBer service was available in 45 countries and more than 100 cities worldwide.
Uber aggressively expanding across the globe, moved in to an 88,000-square-foot space at 1455 Market St. four months ago. That space has room for 600 people, and the company has leased an additional 132,000 square feet in the same building, but has not yet moved in.
Uber has tens of thousands of drivers. Several times this year, drivers have organized and protested the company’s practices, in cities like New York, Santa Monica and San Francisco. Today (Oct 22) there is a multi-city protest, which will take place in front of Uber’s various offices from 3 p.m. to 6 p.m. EST, in cities across the country including Chicago, Seattle, San Francisco, Los Angeles, and even across the pond in London. Uber drivers have a handful of issues with the company, including Uber’s reduced fares, Uber’s tipping policy, the five-star rating system, and driver safety and with Uber setting policy with no driver input.
Uber says it is creating 20,000 new driver jobs every month and it calls its “driver partners” small business entrepreneurs who earn better wages than taxi drivers. The average annual salary for a cabdriver in the United States is $22,820, according to the U.S. Bureau of Labor Statistics.
Uber has said its UberX drivers can make $90,000 a year in New York. It says drivers can make up to $60,000 per year in Dallas.
The max that I’ve made on an hourly basis is about $45 to $55 an hour,” one Dallas-based UberX driver said. “The average on it is about $27/hour.”
At that rate, he would make about $56,000 per year on average, driving 40 hours a week. This particular driver, who has a background in finance, has calculated that he would only make $36,988 driving 40 hours per week net of things like gas and fees. Theoretically, this driver should be able to make more money, but the issue is that he doesn’t always have a passenger in the car with him while he’s on duty. This driver says his average utilization per hour is roughly 44 percent. So for every mile he drives per hour, only 44 percent those miles actually earn him money.
A Dallas Uber driver who works 90 hours a week says he makes around $78,000 per year.
Uber CEO Kalanick has said he looks forward to replacing drivers with self driving cars
Kalanick made a point of saying that he doesn’t envision self-driving cars getting on the road in a meaningful way anytime soon. But he made clear that when that day comes, the upside of Uber using them will be greater than the downside of having to let drivers go. What are the upsides? Less congestion, fewer accidents and a cheaper option than owning a car, Kalanick claims.
“It’s not technology for technology’s sake,” he said. “There’s real advancements for how cities work.”
He envisions a multi-decade transition.
Kalanick was visibly excited at the prospect of developing a fleet of driverless vehicles, which he said would make car ownership rare. “The reason Uber could be expensive is because you’re not just paying for the car — you’re paying for the other dude in the car,” Kalanick said. “When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away.”
Uber Rush in New York is doing retail delivery, and they are delivering food in LA, SF and New York. They deliver kittens in helicopters—whatever can be delivered on demand, they’ll do it.”
Uber’s biggest investor is Google. Google is in the lead developing self-driving cars.
Owners of Uber
In June, 2014, Uber raised $1.2 billion from BlackRock, Fidelity Investments and Wellington Management (Google Ventures, Kleiner Perkins Caufield and Byers, Menlo Ventures and Summit Partners). Uber had a $18.2 billion valuation.
Common shares (stock usually held by the founders and maybe some angel investors) accounted for about 38% of Uber’s total share count—109 million common shares out of a total of 289 million.
Forbes estimates that Uber CEO Kalanick owns at least 10% of Uber. That would put him close to the $2 billion mark–and earn him a spot on the Forbes 400 list of the richest Americans.
Uber Vs Lyft
SOURCES – Business Insider, Washington Post, Fast Company, SF Gate, The Verge, Ad Week, Recode.net, Bureau of Labor Statistics, Forbes