Topic: Ride sharing
Lyft’s Gross Bookings Growing at Higher Rate Than Uber’s (Jul 25, 2017)
Bloomberg has some inside data from Lyft that suggests its gross bookings grew by 25% year on year in the second quarter, which would be higher than the mid-teens growth Uber had told investors to expect in a preliminary call earlier this month. As with other recent signals that Lyft may be gaining on Uber, it’s tempting to read this as evidence that there’s some kind of backlash against Uber over its recent troubles, but I continue to see very little evidence of that. Rather, it’s likely that Lyft’s big push into new markets in the first half of this year has helped it grow bookings significantly during this period, while the Uber scandals have made a far more limited impact. And of course Uber’s results are on a much bigger base, meaning that its dollar growth is likely far larger than Lyft’s even if its percentage growth rate is lower. I’m happy to see Lyft gaining on Uber – it’s always struck me as a more ethical company with a leadership with more integrity than Uber’s, and I’ve been using Lyft pretty much exclusively when traveling recently. But I see very little evidence that Lyft is gaining on Uber broadly for this reason, and in using Lyft it’s often been clear just how big an edge Uber has – at airports, there are multiple times as many Ubers in the pick-up area as Lyfts, and at least half my drivers have been drivers for both services, often skewing heavily towards Uber in their actual share of driving (which often turns to a 100% share on specific days given the bonuses Uber offers for driving over a certain amount).
It’s been somewhat heartening lately to see Lyft partnering with a number of different players around autonomous driving technology, and even announcing its own “open platform” (mostly an API for integrating with its ride sharing data) for the space. At a time when Uber, Waymo, Tesla, and a raft of big legacy automakers are all competing around self-driving systems, it appeared Lyft was going to avoid diving into the fray and instead try to partner with the best in the industry. However, all that got rather turned on its head today when it announced that it will also be developing its own self-driving technology, with 10% of its engineers already devoted to this area and a big expansion and new offices planned for the team. On paper, that looks like something of a contradiction given the recent announcements about partnerships, or at the very least a serious hedge that will make at least some of those partners think twice. However, in reading both Lyft’s own blog post and several press articles about the news, I’m coming to the conclusion that there’s actually very little there, and in fact Lyft may be building something far more limited in scope than what most others mean when they talk about a self-driving system. All that’s really described in Lyft’s announcement is leveraging its existing ride sharing data and possibly adding sensors to some of its drivers cars to create 3D mapping. The former is already the centerpiece of its open platform, while the latter seems overly ambitious and probably also redundant given the much larger and more advanced high definition mapping efforts underway for the last several years. What I don’t see any references to are developing LIDAR or other hardware necessary for self-driving, or even software to steer self-driving cars – it’s almost as if Lyft expects its partners to fill those roles, though it still talks about Lyft’s own self-driving cars as distinct from those run by partners. I’m hoping we’ll get more clarity as this project moves forward, but suspect it’s less momentous and therefore also less contradictory than it might at first seen based on the headlines.
Uber Talking to SEC About Giving Drivers Equity (Jun 29, 2017)
According to Axios, Uber has been meeting with the Securities and Exchange Commission to discuss giving drivers equity in the company. As the piece notes, this was something recently-acquired ride sharing startup Juno promised to do, but which it found legally difficult given SEC regulations. Of course, if drivers were employees, there would be entirely standard ways to deal with stock-based compensation, but the combination of the fact that Uber is a private company and drivers are contractors rather than employees make this more complex. Given the historical meteoric rise of Uber’s valuation, I could certainly see the appeal for drivers of getting a stake in the company, though the attraction will have waned a little as there have been reports of shares selling at lower prices in the private markets over recent months. Longer term, there are still big questions about whether Uber’s valuation will continue to grow if it doesn’t have a clear path to profitability and doesn’t seem to be winning decisively against Lyft and other big competitors in its important markets. And its big investment in autonomous driving is another potential huge cash sink which isn’t guaranteed to pay off, especially given the distraction and uncertainty created by the Waymo lawsuit and the departure of Anthony Levandowski and Travis Kalanick in recent weeks. Still, Uber does seem to be genuinely interested in trying to find ways to improve its relationship with drivers recently, and this is another potential step in that direction.
Nissan-Renault Plans to Combine Electrification, Automation and Mobility Within 10 Years (Jun 23, 2017)
Uber’s CEO Travis Kalanick has finally bowed to pressure from investors in the company and resigned. It doesn’t look like Uber has issued an official statement at this point, but Recode claims to have confirmed the news following a letter from a number of big investors demanding his resignation. At various points since Uber started melting down in January, I’ve both said that Travis Kalanick was the source of the company’s cultural problems and therefore that it would be very hard for the company to truly change with him still in place, and also as recently as last week said that resignations of other top executives felt hollow when Kalanick had in many places been involved in or at least aware of their wrongful actions. For many years, Kalanick’s closest allies within the company were protected by him even when acting egregiously, and that circle had tightened to just Kalanick himself in recent weeks, but did still include him, making all the changes Uber was making ring rather hollow as he continued at the helm. I think his leave of absence was intended to achieve some of the same objectives as an outright resignation without forcing him out, which would have been tough to do, but it was already clear that he was remaining involved remotely in key decisions and thus that there was no real separation. What’s notable is that, despite all the outside pressure for Kalanick to go, and board members’ repeated defenses of him, it took investors acting as a group to finally force him out. This now leaves an enormous vacuum at the top of the company – a committee of no less than 14 people has been said to be running Uber during Kalanick’s absence – at a time when it has already been looking to fill the COO role and has left several other key executives in recent months. I would guess all that will now be reset, with several new executive search processes eventually running to fill the key roles. That, in turn, is going to make it very hard for the company to move forward aggressively with the changes it has committed to in the wake of the Holder Report recommendations. But this is all for the best long term, even if it’s messy in the short term. One big question that’s outstanding is whether the legal strategy in the Waymo-Uber court case changes at all as a result of Kalanick’s departure – we’ll see now to what extent the approach pursued so far was driven by him personally and to what extent the company will act consistently or differently now that he’s out.
Uber Adds Tipping and Makes Other Driver-Friendly Changes (Jun 20, 2017)
While ride sharing companies like Uber and Lyft continue to grab the majority of attention in the transportation tech space, with autonomous driving technology companies getting most of the rest, it’s worth remembering that there are various other transportation tech startups out there, not all of them doing all that well. It appears that Uber is in the process of trying to acquire assets and hire staff from valet parking service Luxe, which is one of those services that appears to have struggled to make its business model work. It had recently announced a pivot of sorts to a new model, but it now seems as though all that will remain is a shell once Uber has snapped up the parts it wants. That may or may not mean that Uber expands into the valet parking space – in fact, I’d say it’s at least as likely that Uber simply sees this as a way to get a number of competent staff with relevant skills quickly and easily while also acquiring some relevant technology.
Rather than treat each of yet another set of Uber news as a separate item, I’m bundling three together into a single grab-bag item here. The most notable (and damaging) is the revelation that one of Uber’s senior execs in Asia led an effort to obtain the medical records of an Uber passenger who was raped by her driver and shared the records with CEO Travis Kalanick and others. He wasn’t fired as part of the 20 terminations that resulted from the first investigation which concluded this week, but has apparently been subsequently, allegedly as a result of the digging by Recode reporters. That’s somewhat absurd given how far-reaching and aggressive the investigation was said to have been, but may reflect a slightly higher bar for executive behavior being set as a result of recent arrivals in the management ranks. Secondly, board member Arianna Huffington, who has been acting more as apologist than change agent in this whole saga, both defended Uber’s culture and said management changes were coming in an appearance on CNBC. The latter is new, though not entirely unexpected, while the former is more evidence of a somewhat mystifying attempt to downplay what are obviously damaging signs of a sick corporate culture at Uber. Lastly, Uber lost the latest round in its court case with Waymo, and will now have to turn over documents relating to Uber’s acquisition of Otto, which could provide some more evidence Waymo needs to make its overall case stick. Overall, plenty more evidence here of both the nasty culture and the difficulty of turning it around, and also that Waymo is going to get at least some of what it’s looking for out of the court case.
Uber Pool Burned Through Cash for Months in San Francisco (May 31, 2017)
One of the best recent examples of the fragmentation that still exists within Alphabet and even within Google specifically is the fact that Waze, the navigation app acquired by Google a couple of years ago, has been working on what’s effectively a ride sharing service, and that it’s been doing so entirely independently of any other part of Alphabet or Google that’s working on related services and technology. It grew entirely out of Waze engineers’ desire to do something interesting rather than out of any strategic imperative from Alphabet management, which means that Alphabet’s Waymo has launched a test of a self-driving ride sharing service while Waze is expanding its Carpool service and the two have nothing to do with each other. To focus on Waze for a minute, it had previously launched its Carpool service in the Bay Area, and now is expanding it to the rest of California. But it’s still more of a true ride sharing service than most of the other services that get painted with that label – this is intended purely as a way for people to literally share rides to places one of them is already driving to, and to help split the driver’s gas money. As such, it also hasn’t generated revenue for Waze, which has merely passed along the entire IRS mileage rate to the driver, so it needs to find some other way to make money, and it looks like that might at least in part be showing ads to users of its app. It’s ironic, then, that even though the interesting disruptive transportation technology has no connection to the rest of Google or Alphabet, but its business model might end up borrowing quite a bit from its parent.