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Uber: The lone wolf of the city streets



BY TIM BRADSHAW, MAY 19 2014, 08:04

Travis Kalanick, CEO of Uber Technologies at  Fortune Brainstorm Tech in July. FLickr/Kevin Moloney/Fortune Brainstorm TECH/ Fortune Live Media/ 12-06-2013

Uber CEO Travis Kalanick.

AN UBER car usually arrives in five minutes but I’ve been waiting 10 for the company’s CE, Travis Kalanick. One of the joys of the driver-hailing app is watching the little car icon inch around its on-screen map towards your location, counting down the minutes. There are no reassurances of this kind about the whereabouts of my interviewee, however, apart from an apologetic note from his handlers.

Arriving on foot from his offices just a block away, he tells me he hasn’t driven his own car in a year and largely travels by Uber these days — paying his own way despite running the company. Kalanick wears the dressed-down, start-up uniform of zippered sweater, T-shirt, jeans and Nike trainers — minus the regulation hoodie. But, at 37, with neat stubble and salt-and-pepper hair, he is a little older than the archetypal app developer and Uber is hardly a start-up.

In 2009, when Kalanick and his friend, Garrett Camp, came up with the idea of "pushing a button to get a ride", it was, he says, a way for them to live like "ballers" — high-rolling sportsmen. Since then, Uber has rapidly evolved from a private, invitation-only limo service for a small group of friends into one of Silicon Valley’s hottest — and most controversial — companies. Last year, it was valued at more than $3bn, with a $258m investment from Google Ventures and private equity firm TPG.

That injection of cash has helped Uber to double its footprint to 100 cities in the past six months. "We’re in four cities in China, five or six cities in India," says Kalanick. "We’re in Bogotá and Cali in Colombia — everywhere."

So where next for Uber? Like any Silicon Valley entrepreneur worth their salt, Kalanick defers to data. People sign up for the service even before it’s available in their city, he says, often from a phone that shares their location via GPS, so Uber sees every time they look, in vain, for a car.

Amazon, once just an online bookstore, is often cited as a template for how Uber might develop. Jeff Bezos, Amazon’s founder and CE, is an Uber investor, though Kalanick rejects comparisons. "I think Uber is just very different, there’s no model to copy. It may be the reason why we’ve been a lightning rod in so many ways, because we don’t do anything conventional…. And then I think also, as an entrepreneur, I’m a bit of a lone wolf."

His philosophy is to trust Uber’s employees to be "lone wolves" too. When launching in new cities, local teams enjoy considerable freedom to promote the service and recruit drivers as they see fit.

To help his new recruits stay on the right side of the law, they attend a monthly session at what Kalanick calls "Uberversity", where he explains "what we’re about, how we fight the good fight". A lot of the questions he gets are about how to handle regulation, he says, something he calls "principled confrontation".

He explains: "If you’re operating from strong principles, you can compromise when the person on the other side is operating from principles you respect. When it’s about protecting an incumbent industry, when it’s about providing less choices for citizens to get around the city, then there’s less to talk about."

Kalanick details some of the barmier "protectionist schemes" to which Uber and its customers have been subjected, such as having to wait an hour after being called for a ride, sky-high minimum fares, and drivers being sent back to a nonexistent "garage" between jobs. In Paris, where drivers pay more than €200,000 to acquire one of the limited number of state taxi licences, disgruntled cabbies went one step further and slashed the tyres on Uber cars. But, Kalanick concludes, "ultimately, progress and innovation win".

Silicon Valley’s more wide-eyed start-up founders often pitch their ideas as "saving the world" — and genuinely believe that is what they’re doing, however mundane or minute the technical advances. Uber is more nakedly competitive and ambitious. "We feel we are very honest and authentic, to the point of being brutally honest," Kalanick says. "Not everyone likes that style, and I get that, but at least we’re trustworthy."

Nonetheless, many city halls still aren’t sure how to handle Uber, a "marketplace" that owns no cars and employs no drivers — especially when, in 2012, it began to allow anyone with a car and a good driving record to be a makeshift taxi driver. Local authorities challenging this ride-sharing model are often encouraged by actual taxi drivers and their unions, who argue that Uber lacks the proper insurance and has been insufficiently thorough in its background checks.

Uber insists its insurance is "best in class" and its driver checks "among the most stringent in the industry". But its record on safety and liability will soon be tested in court. The parents of a six-year-old girl killed in an incident involving an Uber driver on New Year’s Eve in San Francisco are suing the company. Uber has denied responsibility because the driver was not carrying a passenger at the time, which means its insurance was not applicable.

This is an extreme case, but Kalanick’s response to legal challenges has typically been hard-nosed. "I’m a natural born trust-buster," he says of his mission to smash taxi cartels.

That’s not what many would call Kalanick. He’s more often styled as an ultra-capitalist, not least because of "surge pricing", where Uber doubles or triples fares during busy periods such as rush hour or in bad weather. He says this is to encourage more drivers on the road when they are needed, not just to milk desperate passengers. But the free-market practice has attracted high-profile criticism. Salman Rushdie described surge pricing as a "cynical rip-off".

Kalanick didn’t help his case by choosing the cover of Ayn Rand’s The Fountainhead, a favourite of laissez-faire capitalists, as his Twitter profile picture. He thinks it’s an "awesome book" but takes issue with the way the press latched on to the association: "All of a sudden, I’m a raging objectivist, or whatever it is."

He has replaced Rand with Alexander Hamilton, one of the US’s founding fathers.

He admires the founding fathers, because "they have to hustle, just like an entrepreneur, because they’re creating a country. Whoa, how cool is that?"

Could he see himself in politics one day? "It’s definitely not for me," he says, adding that he is "not diplomatic enough". Yet, surprisingly, he likens Uber’s city managers to local mayors. "There’s an old-school ‘pillar of the community’ thing that happens when you roll out a transportation system for a city." It’s an odd choice of words, given that Uber’s legal arguments often rest on classifying itself as an asset-light software company, not as a transportation provider.

Uber’s rapid revenue growth is pegged in part to that of the smartphone market. But it also fits the wider trend of internet companies grappling with the physical. After Google’s experiments with self-driving cars, its investment in Uber last year triggered visions of robo-taxis. Kalanick says he has ridden in one of Google’s cars. "It’s a beautiful thing, oh my gosh." But the technology has "a way to go".

He reels off a series of manoeuvres that are simple to human drivers but would flummox a robo-car: entering a freeway, driving around a double-parked delivery truck, even dealing with rain. Does Uber want to solve all these problems itself or is he happy outsourcing it to Google? "Anything that’s important to the company, we won’t be outsourcing," he says.

So Uber has its own team working on robo-vehicles? "I didn’t say that; don’t mess with me. I didn’t say that."

He didn’t say he doesn’t, either, but he bounds on. "It will definitely happen in our lifetime. The question is when and ‘Can that happen faster?’"

©2014 The Financial Times Limited


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