Uber (company)

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Uber, Inc.
Type Private
Industry Transport
Founded March 2009
Founder(s) Garrett Camp, Travis Kalanick
Headquarters San Francisco, California, U.S.
Area served Worldwide
Key people Travis Kalanick (CEO)
Services Vehicles for hire, Ridesharing
Website uber.com

Uber is a venture-funded startup and transportation network company based in San Francisco, California that makes mobile application software ("app") that connects passengers with drivers of vehicles for hire and ridesharing services.[1] The company arranges pickups in dozens of cities around the world.[2]

Initially, Uber drivers had cars such as Lincoln Town Cars, Cadillac Escalades, BMW 7 Series, and Mercedes-Benz S550 sedans.[3] After 2012, Uber added a wider selection of cars to market to a broader cross-section of the market, called UberX.[4] Cars are reserved by sending a text message or by using a mobile app. Using the apps, customers can track their reserved car's location.[3]

As of 2012, Uber had indicated it was planning to expand operations to include non-taxi ridesharing.[5][6]

History[edit]

Uber was founded as UberCab by Garrett Camp, and Travis Kalanick in 2009. The first prototype was developed by Garrett and Travis with help of Oscar Salazar & Conrad Whelan, both friends of Garrett from grad school. In early 2010 Travis then met Ryan Graves, who became Uber's first full-time employee to launch in San Francisco. 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.[7]

The domain name "uber.com" had been owned by a social networking and blogging company which had shut down its services in September 2008. In 2010, the domain name was transferred to the Uber cab service via a purchase from Universal Music Group.[8]

Uber's mobile app launched in 2010 in San Francisco, on iPhones and Android phones.[9]

The company has gradually expanded its service to cover more cities. Travis Kalanick said in December 2011 that in response to growing demand, Uber is also planning to target 25 more cities outside the United States in the coming months.[10]

The company received venture funding in late 2010 from a group of super angel investors in Silicon Valley, California, including Chris Sacca.[11] In early 2011, Uber raised more than $11.5M in Series A funding led by Benchmark Capital.[12] In late 2011, Uber further raised $32 million in funding from several investors that include Goldman Sachs, Menlo Ventures and Bezos Expeditions[13] bringing their total funding amount to $49.5M.

In April 2012, Uber tested reservations for conventional taxis, at lower rates, in Chicago.[14]

In July 2012, the company entered the London market with an initial staff of about 90 drivers of Mercedes, BMW and Jaguar.[15] On July 13 in honor of National Ice Cream Month, Uber launched Uber Ice Cream, which added the ability in 7 cities to summon an ice cream truck for on-demand delivery, and bill the purchase to a user's account.[16] Starting on July 3, 2013, Uber started offering experimental UberCHOPPER rides from New York City to The Hamptons for $3000, via cab and helicopter.[17]

In July 2013, Uber was reported to be seeking $150 million to $200 million through another round of funding at a valuation of $3.5 billion.[18]

On August 22, 2013 Uber has closed $361.2 million in its latest round. The round values Uber at around $3.4 billion pre-money and $3.76 billion post.[19]

On September 4, 2013 Uber announced its first sports deal. 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.[20]

Regulatory opposition and approval[edit]

Uber has been accused in several jurisdictions of illegal taxicab operation.

In May 2011, Uber received a cease-and-desist letter from the San Francisco Municipal Transportation Agency, claiming that 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.[21] 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, in 2013 an interim agreement was reached reversing those actions.[22] 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 InstantCab and making California the first state to recognize such services.[23]

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.[24] 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.[25]

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.[26]

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.[27]

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.[28] When Hurricane Sandy hit New York later that month, Uber drew criticism for doubling prices as part of its "surge pricing" system.[29] (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.)

A September 2012 article in the Vancouver business press reported a dispute with local regulators.[30] On November 22, 2012, Uber announced that it was exiting the "Secret Uber" stage in Vancouver and raising its rates to $75 per hour to comply with provincial regulations.[31] As of December, Uber had not applied for a license from the city.[32]

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".[33] City officials said they had advised the company to comply with local regulations. Rival taxi dispatch apps had obtained licenses.[34]

As of the summer of 2013, Uber is being sued by drivers who claim they did not get some of their tip money.[35]

Pricing and payments[edit]

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, the price is calculated on a distance basis. Otherwise, the price is calculated on a time basis.[36] 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 there is no option to add a tip except to offer it via cash) is automatically billed to the customer's credit card.[3] Uber has said that its high prices are the premium that the customers pay for a cab service that is not only reliable but also punctual and comfortable.[37][38][39]

During holiday 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.[40] Customers receive notice when making a reservation that prices have increased.[41] During New Year's Eve 2011, prices were as high as seven times normal rates, causing outrage in response.[42] Uber co-founder Travis Kalanick responded that "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."[42]

Additionally, Uber has been known to promote its services with promotional codes for first time users.[43]

Reception[edit]

In 2011, Marc Andreessen said that 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."[44] Also in 2011, the New York Times called Uber "clever but costly," noting that the cars are "particularly nice by livery standards" and that pickup times were slow compared with traditional New York City taxis and black cars.[37]

Several drivers have credited Uber for increasing their potential earnings by 30%. The drivers and riders rate each other after each trip, improving the experience for both the driver and the rider.[45]

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 (non-luxury cars such as Toyota Prius Hybrids).[46] This move has led to dissatisfaction among existing Uber limo drivers who have seen their earnings decrease.[47]

In December 2013, an Uber driver ran over and killed a 7-year old girl, severely injuring her mother and brother. Uber denied any liabilities with the event. [48] On January 13, 2014, taxi cab drivers in Paris, France attacked an Uber driver's car near Charles-de-Gaulle Airport, protesting competition from the transportation startup.[49]

Promotions[edit]

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.[50] 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.[51]

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 4th weekend,[52] and also offered ferry service during the 2013 BART strike to help with the additional transit load.[53]

On October 29, 2013, widely considered to be National Cat Day, 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.[54]

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 DC in cooperation with The Home Depot.[55]

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.[56]

References[edit]

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  2. ^ Uber - Learn More
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External links[edit]