With annual revenues of over $11 billion, a market capitalization rate of $74 billion, and over 19,000 employees, and multiple corporate controversies, San Francisco-based Uber (UBER) has had a wild ride since its inception in 2009.
The ride-sharing service, launched after the company's two co-founders couldn't get a taxi in Paris during a snowstorm, has come a long way since its rollout a decade ago.
Ten years after, with 75 million global customers and three million dedicated drivers in 83 countries, Uber has been a legitimate game-changer in the ride-sharing services market, as getting a ride around town will never be the same again.
What's the story behind Uber, and how has it grown from an idea in a Paris snowstorm to claiming 5 billion rides, according to company figures? Here's a look under the hood at Uber's back story - along with an engine check down the road to see where the ride-sharing giant is heading next.
The History of Uber
According to the Uber archives, the company's founding all came from a "simple idea" - what if you could request a ride right from your mobile phone?
The infamous snowstorm incident took place in Paris, in December, 2009. Experiencing the common urban woe of not getting a cab in a storm, Travis Kalanick and Garrett Camp soon brainstormed an idea for a new company called UberCab.
The name Uber is derived from the German word meaning "above all the rest," a bedrock principle Kalanick and Camp wanted for their fledgling company.
With UberCab, the origin of the connectivity portion of the company-client dynamic was introduced - all a rider had to do was open their mobile phone, tap a button, and find an affordable ride in minutes.
Within months, Uber dropped the "Cab" portion of its company name, opting to stick with Uber and Uber alone - the company's founders reasoned that Uber really wasn't a taxicab company in the traditional sense, so there was no reason to attach the term "cab" to its name.
The company began hiring right away, with one noteworthy story about how Uber found its eventual chief executive officer. One year after its rollout, Kalanick sent a note out on Twitter (TWTR - Get Report) looking for skilled management help. Ryan Graves was one of the first responders and became Uber's first employee.
Here is how the interaction took place on Twitter, which not only shows the power of social media to connect business partners, it also shows the reliance millennial business owners and prospective employees had in using mobile technologies to break the ice and get down to business.
Kalanick - "Looking 4 entrepreneurial product mgr/biz-dev killer 4 a location based service.. pre-launch, BIG equity, big peeps involved-ANY TIPS??"
Graves (in response at 5:17 PM on Jan. 5, 2019) "Here's a tip. email me :)"
Graves signed on as a company general manager and was reportedly awarded between 5% and 10% of the company. In short order, Graves was tapped as the company CEO - and is now a billionaire, although he's no longer running the company.
Shortly after Graves was named as CEO, Uber introduced UberX - a ride-sharing service in its purest form, as the company now sought drivers to use their own vehicles to pick people up and drive them around - all under the Uber banner, and operating under Uber's rules of the road.
Uber has taken an interesting path in its 10 years in business. Here's a brief timeline underscoring its biggest and most noteworthy moments.
March, 2009. Kalanick and Camp, along with college buddies Oscar Salazar and Conrad Whelan, create the "black car" ride service model that would ultimately become UberCab.
June, 2010. UberCab is launched in San Francisco, and the ride service immediately connects with the city's tech-heavy, and car-ownership averse, urban professionals.
October, 2010. UberCab is renamed Uber, and the company snares $1.25 million in capital funding to expand. Former Napster co-founder Shawn Fanning is an early investor. Two months later, CEO Graves steps down and is replaced by Kalanick.
May, 2011. Uber rolls out in New York City, and is met with heavy resistance from the city's massive taxicab industry. Six months later, Uber launches in Paris.
December, 2013. Uber drivers join up to file a lawsuit against Uber, looking to be designated as employees, and not contract workers. It's the first of multiple showdowns between drivers and Uber.
August, 2014. Uber introduces UberPool, a ride-sharing model that enables riders to "pool" their rides and split the fare between multiple parties.
April, 2015. UberEats is launched in Los Angeles, Chicago and New York, giving consumers the Uber experience with food delivery. The service immediately catches on with young millennials too busy on the job to cook dinners - giving Uber another profit line in the process.
February, 2017. Uber is hit with its first of several charges of sexual harassment in the workplace. A blog post from a former company engineer lights the fuse with charges of a sexist workplace culture at Uber. Management responds to the resulting outcry by hiring former U.S. Attorney General Eric Holder to investigate the matter, and to look into the company's workplace culture. Five months later, Kalanick resigns as CEO after strong pressure from the company's board of directors. He is replaced by Dara Khosrowshahi, the former CEO at Expedia (EXPE - Get Report) .
May, 2019. Uber goes public on the New York Stock Exchange, with an initial share price of $45, and a market capitalization of $75.5 billion.
Uber certainly has experienced its share of controversies, with long-time executives leaving the company as a direct result.
First up are the lengthy battles Uber has fought in big urban centers like New York and San Francisco, mainly lining up against big taxi interests who viewed Uber as a major threat.
In 2010, San Francisco's Metro Transit Authority delivered a "cease and desist" letter to Uber, charging them with running a taxi service company without proper licensing. The regulatory wrangling took three years to sort out, and a deal was reached to allow Uber to continue to operate on the streets of San Francisco in 2013.
Uber was also embroiled in a class-action lawsuit filed by 35,000 company drivers in 2013, who claimed their independent contractor status was unfair. The drivers sought full employment, and the better wages and benefits that go with being full-time employees.
The company and its drivers settled out of court, and today Uber drivers are still deemed contractors in most U.S. states, although the company has taken steps to boost pay and perks on the job.
In 2014, Uber ran into more trouble when then-CEO Kalanick drew scrutiny after calling his own company "Boober" in a GQ magazine interview, in discussing the ride-sharing company's popularity with female consumers. The issue grew prominent after former Uber staffer Susan Fowler's blog post on what she said was the company's toxic and sexist workplace culture.
The resulting report from Holder backed Fowler's view of the company, and led directly to the resignation of 20 company employees and new rules on staff behavior in the workplace going forward.
Uber's Stock Performance
After going public with its first initial public offering in 2019, at a stock price of $45, Uber stock is currently trading in the same price range three months later.
The company's market cap remains strong at $74 billion, and Wall Street analysts expect the Uber's share price to rise to $53 in a year, bolstered by continued demand for ride-sharing services and a general consensus that the company will emerge from its workplace behavior scandals relatively unscathed and put its other controversies in the rearview mirror.
The company should also benefit from the burgeoning strength of its UberEats food delivery service and is expected to become an industry leader in the use of driverless vehicles down the road.
There are some financial roadblocks for investors, however.
Uber stock does not pay a dividend, and thus is not a big attraction to income-minded investors.
Meanwhile, more aggressive investors seeking capital appreciation are no doubt disappointed in Uber's share price, which has remained largely mired in the mid-$40s since its IPO, and shows no significant sign of taking off in the coming months, even as the overall stock market continues its robust ascent.
Consequently, while there's much to like about Uber's growth prospects as a company, its meandering share price isn't generating much enthusiasm among investors - at least in the summer of 2019.
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