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Uber’s Aggression: Battering both competitors and customers into submission, with questionable business practices

Uber has had an astonishing journey. Even for the technology industry where businesses regularly explode into life, Uber’s success story stands almost unparalleled in speed and scope. Estimates of its value vary but some think $70bn could be a plausible valuation for the company, which would make it bigger than some of the very largest automotive manufacturers in the world. However Uber has become a master of some of the dark arts of business, using courts to get its way, avoiding regulation, removing competitors and encouraging a dog eat dog business environment. Some suspect that Uber will go public in 2017, and these practices may expose the company to a public backlash.

Part of the secret of Uber’s success is not just its innovative package of technologies, but the aggressive way it defends and promotes them. The company has swept aside companies that had previously been extremely entrenched and established in a global market that is largely saturated. The way it has done this is to bullishly ignore local regulations as it enters a market and massively discount rides to snatch a market share before the local authorities can decide what to do and in order to fund these enterprises the company burns through cash, which it will not be able to do if public.

The whole setup of the business gives it plausible deniability when accused of playing the system, arguing that it is only a “market place” for the self-employed drivers it represents and not liable for any problems that occur. This is then backed up with a legal team ready to fight any court rulings that deem its practices unlawful. However now that the company is established, authorities are beginning to get a grasp on these tactics, from its tax handling techniques to its unfairness to drivers and customers, the glossy sheen on the company is beginning to wear thin.

Uber, despite being a fairly unique and innovative company, is in equal parts a very aggressive expansionary company, which is fairly normal amongst high flying startups . However the company is also employing some tactics which may be questionable if it ever chooses to become a public brand. The company wants to prevent customers and drivers from exercising grievances and from governments taking its revenues as tax. Uber is a good example of how the new breed of billion dollar companies are looking to avoid the responsibilities that huge corporations usually face.

 

For further reading please visit our store to read our analyst insight on Uber:

http://advantage.marketline.com/Browse?q=Uber&f_informationType=Analyst+Insights

 

 

Posted in Technology, Transport.

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