|Founder(s)||Travis Kalanick, Garrett Camp|
|Headquarters||San Francisco, California, U.S.|
|Key people||Travis Kalanick (CEO)|
|Services||Vehicles for hire, ridesharing|
Uber is a venture-funded startup and transportation network company based in San Francisco, California, that makes mobile apps that connect passengers with drivers of vehicles for hire and ridesharing services. The company arranges pickups in dozens of cities around the world. Cars are reserved by sending a text message or by using a mobile app—the latter can also be used by customers to track their reserved car's location.
Initially, Uber drivers used cars such as Lincoln Town Cars, Cadillac Escalades, BMW 7 Series, and Mercedes-Benz S550 sedans. After 2012, Uber launched UberX, following the addition of a wider selection of cars to appeal to a broader cross-section of the market. In 2012, Uber announced a plan to expand its operations to include ridesharing in non-taxi vehicles.
In June 2014, Uber completed a round of funding valuing the company at US$18.2 billion. Although Uber has not released the names of its investors, Fidelity Investments has been widely reported to lead the investment. As of June 2014, the company continues to deal with accusations in several jurisdictions of illegal taxicab operation.
Uber was founded as UberCab by Garrett Camp and Travis Kalanick in 2009. Uber service was officially launched in San Francisco in June 2010, with Ryan Graves becoming CEO in August of that year. Ryan Graves later stepped down from his role, and Travis Kalanick was made the CEO. Ryan is currently the VP of Operations and a board member.
The company received venture funding in late 2010 from a group of super angel investors in Silicon Valley, California, including Chris Sacca. In early 2011, Uber raised more than $11.5M in Series A funding led by Benchmark Capital. In late 2011, Uber further raised $32 million in funding from several investors that include Goldman Sachs, Menlo Ventures, and Bezos Expeditions bringing their total funding amount to $49.5M.
In April 2012, Uber tested reservations for conventional taxis, at lower rates, in Chicago.
In July 2012, the company entered the London market with an initial staff of about 90 drivers of Mercedes, BMW, and Jaguar autos. On July 13 in honor of National Ice Cream Month, Uber launched 'Uber Ice Cream', which added the ability in seven cities to summon an ice cream truck for on-demand delivery, and bill the purchase to a user's account. Starting on July 3, 2013, Uber started offering experimental UberCHOPPER rides from New York City to The Hamptons for $3,000, via cab and helicopter.
On September 4, 2013, Uber announced its first sports deal. By partnering with the NFL Players Association to promote safe rides for NFL players, Uber plans to appeal to a more mainstream audience for the future.
On June 6, 2014, Uber announced $1.2 billion in funding in its latest round. The round values Uber at around $17 billion pre-money.
On April 30, 2014, Transport for New South Wales, the government authority regarding transportation in New South Wales, Australia, responded to the introduction of ride-sharing function of Uber and clarified that "if a NSW driver is taking paying members of the public as passengers, the driver and the vehicle must operate in accordance with the Passenger Transport Act" and "Under the act, such services must be provided in a licensed taxi or hire car, by an appropriately accredited driver, authorised by Roads and Maritime Services (RMS)."
On May 6, 2014, the Taxi Service Commission in Victoria, Australia, issued a number of infringement notices to Uber drivers with a fine of Au$1,723, after a public warning discouraging people to use ride-sharing applications like UberX. NSW Transport Minister Gladys Berejiklian said RMS is investigating Uber's case.
A September 2012 article in the Vancouver business press reported a dispute with local regulators. On November 22, 2012, Uber announced it was exiting the "Secret Uber" stage in Vancouver and raising its rates to $75 per hour to comply with provincial regulations. As of December, Uber had not applied for a license from the city.
On December 5, 2012, officials at the City of Toronto charged Uber with "25 municipal licencing offences, including operation of an unlicensed taxi brokerage and unlicensed limo service". City officials said they had advised the company to comply with local regulations. Rival taxi dispatch apps had obtained licenses.
On June 11, 2014, London black-cab drivers, members of the Licensed Taxi Drivers Association, disrupted traffic as a protest against Transport for London's refusal to stop Uber's calculation of fares based on distance and time taken, as they claimed it infringes upon their right to be the sole users of taxi meters in London. The following week, London mayor Boris Johnson stated it would be "difficult" for him to ban Uber "without the risk of a judicial review"; however, he expressed compassion for the view of the black-cab drivers. Johnson explained:
I think it's a very difficult [question] ... We've gone to the high court to get a ruling on this, and the issue is basically: is the driver's mobile in the cab equivalent to a taxi meter? I can see why m'learned friends might think that it is, because it's receiving data about, or it's calculating, the distance and time and the fare. And there are other lawyers who say that it isn't, and that was the advice of the counsel to TfL. And so we've got a legal problem.
In a blog post following the black-cab protest, driver Richard Cudlip conceded, "as a trade we failed to get our message across". Cudlip further explained his perception of the salient concerns: safety in minicabs, slow issuing (and reissuing) of black-cab licences, a failure to prevent minicabs from illegally touting for business, and a lack of space outside key London tourist destinations.
In May 2011, Uber received a cease-and-desist letter from the San Francisco Municipal Transportation Agency, claiming it was operating an unlicensed taxi service, and another legal demand from the California Public Utilities Commission that it was operating an unlicensed limousine dispatch. Both claimed criminal violations and demanded that the company cease operations. In response, the company, among other things, changed its name from UberCab to Uber. In the fall of 2012, the California Public Utilities Commission issued a cease-and-desist letter to Uber (along with rideshare companies Lyft and SideCar) and fined each $20,000. However, an interim agreement was reached in 2013 reversing those actions.
In September 2013, the CPUC unanimously voted to make the agreement permanent, creating a new category of service called transportation network companies to cover Lyft, UberX, SideCar, and Summon, thereby making California the first jurisdiction to recognize such services.
In January 2012, an Uber driver's cab was impounded as part of a sting by the Washington, D.C., taxicab commission. The commissioner said the company was operating an unlicensed taxicab service in the city. Following a social media campaign by Uber's users, the D.C. City Council voted in July to formally legalize this type of service, with no minimum fare.
On August 1, 2012, the Massachusetts Division of Standards issued a cease-and-desist letter to Uber, on the grounds that the GPS-based smartphone app was not a certified measurement device, but on August 15, the agency reversed its ruling after prodding by Governor Deval Patrick, saying that technique was satisfactory because it was under study by the National Institute of Standards and Technology.
On October 5, 2012, Uber was sued by the taxi and livery companies in Chicago. According to the release, Uber is accused of violating Chicago and Illinois laws designed to protect public safety, consumer protection, and fair practices.
The New York City Taxi and Limousine Commission has discouraged drivers from participating in Uber, resulting in suspension of Uber's New York taxi service in October 2012. Uber's premium sedan service was not affected. When Hurricane Sandy hit New York later that month, Uber drew criticism for doubling prices as part of its "surge pricing" system. (Uber ultimately waived its fees and passed on all of the fares to its drivers, and defended its pricing by noting that it tripled the number of vehicles available.)
As of August 2013, Uber was being sued by American drivers who claimed that the company was stealing their tip money.
On March 17, 2014, the Seattle City Council voted to limit the number of drivers that ride-sharing services like Uber, Lyft, SideCar, and others could operate to 150 per service. City Council Member Kshama Sawant argued in favor of the caps as a means to protect traditional taxi drivers. However, on April 17, 2014, the council's ordinance was suspended by a coalition that obtained 36,000 signatures to put the question to voters in a referendum. As a result, Mayor Ed Murray announced a 45-day negotiation process to find an alternative approach. As of July 14, 2014, Uber has donated over $500,000 to "Seattle Citizens to Repeal Ordinance 124441," a political group seeking to overturn the ordinance limiting the amount ride-share vehicles in Seattle.
Pricing and payments
Uber's pricing is similar to metered taxis, although all hiring and payment is handled exclusively through Uber and not with the driver personally. If the Uber car is travelling at a speed greater than 11 mph (18 km/h), the price is calculated on a distance basis. Otherwise, the price is calculated on a time basis. At the end of a ride, the complete fare (which does not include a tip - Uber's exact wording is "No Need to Tip" and no option to add a tip exists except to offer it by cash) is automatically billed to the customer's credit card. Uber has said its high prices are the premium that the customers pay for a cab service that is not only reliable, but also punctual and comfortable.
During high demand times such as Halloween, New Year's Eve, or severe inclement weather (such as heavy snowstorms), Uber increases its prices to "surge price" levels to reach an economic equilibrium by attracting more drivers. Uber has also used surge pricing during extremely inclement weather, such as a July 8, 2013, rainstorm that flooded many streets in the greater Toronto area, and during Hurricane Sandy. Customers receive notice when making a reservation that prices have increased. During New Year's Eve 2011, prices were as high as seven times normal rates, causing outrage in response. Uber co-founder Travis Kalanick responded: "...because this is so new, it's going to take some time for folks to accept it. There's 70 years of conditioning around the fixed price of taxis."
In 2013, USA Today named Uber its tech company of the year.
In 2011, Marc Andreessen said he would love to invest in Uber. He told CNET, "Uber is software eats taxis. [...] It's a killer experience. You watch the car on the map on your phone as it makes its way to you." Also in 2011, the New York Times called Uber "clever but costly", noting the cars are "particularly nice by livery standards" and pickup times were slow compared with traditional New York City taxis and black cars.
Uber faces competition from lower-cost real-time ridesharing startups such as Lyft and SideCar. To compete at lower price levels, Uber has introduced UberTaxi (partnerships with local taxi commissions) and UberX (nonluxury cars such as Toyota Prius hybrids). This move has led to dissatisfaction among existing Uber limo drivers who have seen their earnings decrease.
In December 2013, a person who worked as an Uber driver ran over and killed a six-year-old girl, severely injuring her mother and brother. The driver was not carrying a passenger, but the girl's family filed a wrongful death suit against Uber, claiming the driver was using Uber's mobile application at the time.
On January 13, 2014, cab drivers in Paris attacked an Uber driver's car near Charles de Gaulle Airport, protesting competition from the transportation startup.
On June 11 2014, in a concerted action, taxis blocked roads in major European cities in protest against what they perceive as a threat to their livelihoods by companies such as Uber. The cabbies contended that Uber and similar smartphone app-based services have an unfair advantage because they are not subject to the same kinds of fees and regulations placed on taxis.
On July 21, 2014, the Seoul city government said it would seek a ban on a car-hailing smartphone app from Uber Technologies Inc., joining a global battle by municipalities and traditional taxi services against the service.
Uber has had multiple limited-time offers, featuring specialty vehicles, to promote their services. One such offer was for hiring ice cream trucks to come to a specific place, including one of several ice cream packages, for a flat fee. Another had Back to the Future enthusiasts flocking to the San Francisco Bay area and offering rides in DeLorean DMC-12s to people through Uber's mobile application, as part of a joint promotion effort with General Electric.
Uber has also offered slightly more practical promotions from time to time. For example, they offered helicopter service from New York City to The Hamptons during the July 4 weekend, and also offered ferry service during the 2013 BART strike to help with the additional transit load.
On October 29, 2013, celebrated as National Cat Day in the United States, Uber offered a limited-time kitten delivery service. In addition to their car services, Uber allowed users to select a "Kitten!" delivery button. This service cost $20 and included 15 minutes of playtime with the kittens, plus cupcakes and t-shirts. The proceeds from this promotion were given to local animal shelters. The kitten promotion was only available in San Francisco, Seattle, and New York City.
For Christmas 2013, Uber also had a Christmas tree delivery service in Atlanta, Boston, Chicago, Dallas, Los Angeles, New York City, Philadelphia, San Diego, San Francisco, and Washington, D.C. in cooperation with Home Depot.
In Bangalore, Uber worked with Zoom, a car-sharing organization, and the Ashoka Foundation, on the RideSmartBLR campaign aimed at discouraging personal vehicles and encouraging car-sharing or taxis for environmental and safety reasons.
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