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Uber the ultimate start-up

Sarah Putt, Contributor. 30 April 2019, 9:51 pm

Uber apparently has over 65% of the ride-hailing market in New Zealand. Which surprises me, because I would have expected it to have more. But in this stat New Zealand is lumped in with the US, Canada, Europe, Australia, and Latin America. It's quite something to be singled out at all.

Of course, Uber is about to IPO, and every stat in every country will be thrown into the mix to bolster the share price. According to the Financial Times, the Uber IPO will be up there with the listings of the Silicon Valley greats - Amazon, Google and Facebook.

The company is valued at $91.5 billion. It hasn't made a profit, but it has made an entirely new category - the ride hailing/ride sharing app that completely blew the regulated taxi industry out of the water, in just about every city it entered.

Lots of competitors have grown out up to fight Uber for market share - on its home turf in the US and overseas, even in NZ with Zoomy which offers its service in Auckland, Wellington and Christchurch. On Zoomy's website home page it reads: "kia ora, welcome to zoomy, we believe in giving drivers a fair wage, without passing the buck". That's nice, a humble message in lower caps, polite even. I don't think Uber has ever been described as polite. Its DNA is disruption. So much so that it had to sack its founder CEO and appoint a sober leader after a horror year in 2017 when its macho-esque culture was taken apart.

So, what has Uber done exactly? It has hyped the idea of driverless cars while at the same time being at the vanguard of the gig economy. It has disrupted the taxi industry and provided consumers with an easier way to get around town. It has created one - if not the - most seamless payments experience ever. Is it not a pleasure just to hop out of an Uber at the end of the ride and not have to spend precious minutes mucking around with a payment terminal on dial-up speeds?

Now Uber is going to have to open up its books a little and show investors what's behind that $91.5 billion number. Some people might say a business that doesn't show a profit isn't really a business but that is a very analogue view. Uber is a digital business, yet commentator Ben Thompson's list of unanswered questions on his site Stratechery do make you wonder a little. Unanswered questions like - how much does it cost Uber to acquire drivers and riders, and how much it costs Uber Eats to acquire restaurants and customers. Thompson is a bit grumpy about the lack of detail in the IPO docs: "This is at best disappointing, and at worst feels like a cruel trick on retail investors."

And yet, if you had a few bucks and a US broker, wouldn't you be a little tempted to get a small slice of Uber, the ultimate start-up.


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