I can remember when Napster was launched back in June of 1999 as a peer-to-peer sharing service specializing in the exchange of MP3 music files. It was an instant hit and totally disrupted the music industry. At its peak, Napster had more than 80 million users before it was shut down by a court order. Still, the ease of downloading individual songs lived on and the age of album music was finished. Today, we are once again seeing entire industries being disrupted at a frightening pace.
Uber was founded in 2009 and has turned the global taxi industry upside down in less than five years. It is now present in 53 countries and more then 200 cities worldwide and worth an estimated $40 billion. By creating an app-based transportation network, Uber has transformed anyone with free time and a decent car into a taxi driver. Customers just have to install the Uber app and use it to request a driver. The process is simple and Uber’s rates are quite competitive with those of local taxi companies. If Uber is creating jobs and saving people money, then what’s not to like?
While Uber’s growth has been extraordinary, it has also left a serious wake as taxi companies and governments around the world claim that it is an illegal taxicab operation that embraces unfair business practices and dodges important safety issues. Just last year there was a protest led by 5,000 taxi drivers last year literally shutdown central London. As of December 2014, Uber was banned in Spain and two cities in India, and continues to be involved in disputes with several governmental bodies, including those of the U.S. and Australia. Finally, there was an alleged rape of a woman in India by an Uber driver last December. All in all, Uber has made just as many enemies as friends using the strategy of act now and ask for permission later.
Will Uber be like Napster and burn bright for a few more years before being taken down? I don’t think so. While there are safety issues that need to be solved and governmental regulations that need to be addressed, Uber has unlocked a lot of value. According to Uber co-founder, Travis Kalanick, "There are about 1 billion cars in the world today and I think that about 96% of them are under-utilized. We use about 15% of our space in cities just to park our cars, and we have to deal with problems like drink-driving. There's also a massive carbon footprint that we all have to deal with.” If Uber can learn to be respectful and not see the world as something to be greedily conquered, then it will succeed in totally disrupting an industry that has not changed since the first documented coach service in London back in 1605.
For more information on Uber and its controversy, please refer to the following articles:
Uber founder aims to create 50,000 jobs in Europe, Jamie Dunkley, The Independent, January 19, 2015 (http://www.usatoday.com/story/tech/2015/01/19/uber-founder-new-jobs/21985951/)
Wikipedia: Uber (http://en.wikipedia.org/wiki/Uber_(company)
Wikipedia: Napster (http://en.wikipedia.org/wiki/Napster
Wikipedia: Taxicab (http://en.wikipedia.org/wiki/Taxicab)
For more information about the Corvinus Global Business blogger, go to https://www.linkedin.com/in/kevinmjackson1.