You may not have heard of Uber, a ride-sharing service that uses technology to turn private cars into an army of taxis.
Google (GOOG) has heard of it. The Internet giant led a funding round of $258 million in August, valuing San Francisco-based Uber at $3.5 billion.
Compared with Uber, Zipcar -- bought by Avis Budget Group (CAR) for $491 million last year at this time -- is so very 2012.Uber makes an app that identifies cars for hire that are available near you and helps arrange a pick-up at a price determined by Uber's algorithms. Unlike with Zipcar, where you rent a car for a short period of time, with Uber, you don't do the driving and the ride resembles a taxi ride, going from one specification destination to another. On a calm day, this can be a bargain. On New Year's Eve, as Uber itself warned users, the price goes up. Way up. CEO Travis Kalanick suggested in a blog post that riders fight his "congestion pricing" by doubling-up between midnight and 3 a.m., and noted that estimated costs would appear on the app before cars showed up. What Kalanick calls "congestion pricing," critics call "price gouging." Uber says it raises prices at peak times to get more cars on the road and meet demand. Taxis don't do this. Instead, you will find that at peak demand times in Manhattan, taxis simply don't show up. If you have ever tried to get to LaGuardia Airport from TheStreet's Wall Street offices at around 5 p.m. on a weekday, you may have experienced this firsthand. You may also be learning this on a day when there's a foot of snow on the ground, like today. Uber, which started in March 2009 after co-founders Kalanick and and Garrett Camp met in Paris at a conference called LeWeb, has used Google's money to expand into 60 cities during 2013 with plans to take over the world. The world is fighting back. Many cities, including Portland, Oregon, have been using local laws to keep Uber out. In others, such as Seattle, Uber and competitors such as Sidecar and Lyft are fighting proposals that require high upfront costs and limit the number of cars they can offer. In New York, Uber and its competitors had to win a court decision in June to operate in competition with taxis and livery drivers. Now that it's won the right to operate, Uber is back in court defending itself against liability claims when drivers operating in its name get into accidents. As in the social boom a few years ago, success in one area leads quickly to efforts in others. Airbnb, a home-sharing service, was founded five months before Uber and now claims more than 500,000 listings. RelayRides, founded in 2010, rents cars that are sitting in garages and airports, without drivers. The Altimeter Group, a market-research outfit, put out a report in June noting that over $2 billion in funding had already gone to more than 200 start-ups sharing everything from cars and homes to bicycles and handbags. The bad news is that, as with social media, the sharing economy is going to be late to the Wall Street party. The only sharing company to go public so far, Zipcar, was quickly bought out by Avis Budget, and the rest remain the property of venture capitalists or founders. Venture funds have even gone after the companies that are just buying sharing outfits, such as Avis Budget helping them consolidate the sector. By the time small investors get a chance to buy into sharing, the big profits may all be gone. But don't worry, because there's an even bigger market coming in venture funds that advertise to the public. That gives you a chance to use your mad money to put yourself into the venture-capital business. You can follow that trend and find your own way in at The Deal. Sites like ours were sharing knowledge long before sharing was cool. At the time of publication, the author owned shares of Google. Follow @DanaBlankenhorn This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.