Is The Uber Ecosystem Sustainable?

Will Uber get an opportunity to grow up?  Armed with a $40B valuation, many investors think so. Whether you believe in the app-based taxi hailer or not,  Uber’s impact can be felt all around the world. There are millions of people using it every day, momentum that its lofty aspirations will prove true, and intense controversy everywhere it goes.   Is this the world changer that it purports to be, or just the latest multi-billion dollar company to go bust?

Strategically, Uber is in a strong position.  Its logistical system, army of drivers, and competitive intelligence gives it a first mover advantage in its ambition to become the Walmart (WMT) of personal services.  Cabs are just a platform for worldwide domination of local distribution.    But Uber is asset-light, and it's not  hard to see big players move into its space.  Amazon’s (AMZN) 2 hour delivery is gaining momentum.    Upstarts like Favor and Grubhub (GRUB) are cornering specific niches like food.   And how can you bet against Google (GOOGL)  or someone with significant physical infrastructure like Fed Ex (FDX)?  The barriers to entry are not clear particularly against well capitalized companies.

Speaking of capitalization, Uber’s dotcom-esque valuation has helped them act like a much bigger player than their revenue would suggest.  Even if Uber could continue to grow its value and raise gobs of money (hard to swallow by every conventional metric), some of its challenges cannot be resolved by throwing more money at it. Governments, lobbyists, and pretty much every existing transportation company have vowed to fight Uber.  Even tech savvy cities like Austin and Vancouver have banned the service.  Further, Uber faces a very micro problem;  it has to fight county by county, city by city, and country by country.  How long can it continue these individual battles?  And don’t forget about all the other legal battles such as data breaches and personal security cases from bad drivers. 

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Carol W 5 years ago Contributor's comment
That's bullcrap... taxi drivers are joining Uber like crazy... it's more porfitable for them... fewer fees and expenses and legalese. Check your data. They can't wait even here in as yet un Uber-ed Nashville. A dorky very untaxi city. Don't know who these lobbyists or transport companies are of which you speak. Washington DC loves Uber. They all use it.
Dick Kaplan 5 years ago Member's comment

Interesting if true. Where did you see data on this as fact? Thanks.

Carol W 5 years ago Contributor's comment
Listening to the CEO, he thrives on the battle, so yeah, I say bring it on. Uber will prevail.