Uber's not going to exist in a few years as it's becoming clear that Uber is in very deep trouble after more than 3 000 layoffs the closure of dozens of their officers and the company's stock value Falling by two-thirds and only a year it's becoming very clear that Uber is on its final legs but how did such a promising company sink so low why is this stock continuing to fall even after the company has finally managed to become profitable what made the Uber Empire crash down into the ground well the first reason lies in Uber's
business model you see from the start the company's General way of doing business is by acting as a middleman between drivers and passengers as we all know a user simply enters their location and destination and then a nearby driver can accept the trip once the Trip's over the payment is done through the app and no money changes hands at any point after the trip both the drivers and passengers give each other ratings and at first this business model seems great it's completely revolutionized the taxi industry Uber is a much more convenient way of getting a
taxi compared to all the other options with just the Press of a few buttons you don't have to go through the house of Corning up a taxi company however while this looks great on the outside this business model is much more Sinister than the first seams for starters Uber prefers for their drivers to be viewed as independent contractors rather than at your employees meaning that technically Uber doesn't have to pay any of their drivers a minimum wage nor do they have to pay sick pay or any other kind of benefits whatsoever Uber also doesn't own
any of the vehicles and won't cover maintenance fuel or anything else all of these buttons rest on the shoulders of their drivers and from a purely economical standpoint this business model is revolutionary it's great for Uber because they don't have to pay their workers nearly as much as the traditional taxi services however Uber's problem was that lots of this was actually illegal in fact from the get-go Uber's practices were illegal in San Francisco where they originated from something that would quickly come back to buy Uber however back when Uber was founded Regulators hadn't caught on
to their tactics yet and so Uber had a very small period to monopolize the taxi industry and become too big to stop and so in order to take over the taxi industry the company would make many sacrifices by taking on heavy Financial losses early on all in the name of continued in their expansion the only thing keeping Uber afloat was the large Investments they were receiving as Silicon Valley was betting that Uber was going to monopolize the modern transportation service industry and if Uber was able to secure a monopoly they would eventually become extremely profitable
if they were the only option on the market Uber could then jack up the prices without worrying about being undercut by the competition in fact a monopoly was necessary for Uber due to the extremely thin profit margins that the business model gave them however the company's lack of profitability didn't phase Uber or their investors they were putting all their chips on the rapid growth and for a while this paid off in just a few short years Uber Services had been rolled out across the world this was a genius strategy in a lot of ways and
this was all coming from one man known as Travis kalinik one of the key Founders who created Uber and it was also because of Clinic that Uber became such a controversial company but back in the early years of uber and the negative press towards the company wasn't anywhere near what it is today in fact at the time Clinic was a business Prodigy under his leadership Uber successfully expanded from a small San Francisco startup to Global sensation and the strategy behind this was fairly simple as we've discussed Uber's business model was genius genius in the sense
that they didn't have to pay their workers properly and at the same time Uber would offer insanely cheap deals to entice people to use their services it wasn't uncommon for your first Uber trip to be free or for the company to give you referral bonuses if you manage to get your friends to try out the app these marketing methods exploded Uber's user base with all of this only being possible due to the giant influx of Angel Investors flowing into the company without the investors Uber would be nothing and azuba started catching on the app would
only become more and more popular becoming a central part of millions of lives allowing Uber to have substantial bargaining power later down the line it seemed like everything was perfect for Uber they had established themselves so tightly in modern society that it became so much harder for a city to ban or regular tuba this aggressive and borderline illegal strategy led to unprecedented growth but it wouldn't take long for the consequences to catch up with Uber because Uber's aggressive expansion had given Uber a lot of enemies the first of these was San Francisco's Local Government after
the government started noticing how Uber was cutting regulations they sent the company a cease and desist letter with substantial penalties if they did not comply the notice threatened five thousand dollar fines for every trip and a possible three-month shell sentence for every day the company continued operating now for most people this would have completely destroyed the company but not Uber instead of abiding by the government's demands Uber just continued operating as Uber had already entrenched themselves so deeply into San Francisco they were now coming to control the entire Transportation Market knowing how much power they
now had Uber released a press statement that snubbed the order stating Uber is a first to Market cutting-edge transportation technology and it must be recognized that the regulations from both city and state regulatory bodies have not been written with these Innovations in mind as such we are happy to help educate the regulatory bodies on this new generation of Technology this early statement from Uber was symbolic it summarized their entire business model Uber completely rejected the law and had an almost pompous attitude and saying that we are happy to quote educate the San Francisco government however
this incident would only be the first of Uber's many brushes with the law and this was all trickling down from kalanick's leadership before he founded Uber Cabernet previously started a company called scour but he had to shut it down after he was fined billions for copyright infringement kalanick never paid the full amount of course but this showed that he wasn't afraid of Breaking the Rules and Breaking the Rules was exactly what Uber was doing after establishing themselves in 2011 across the U.S the taxi industries were certainly not happy with this how could they compete with
Silicon Valley funded below minimum wage drivers who were completely out competing the taxi industry the entire U.S taxi industry realized that if they couldn't put a stop to Uber all of them would be out of business because of the pressure from these taxi organizations and other industry leaders new legal measures were enacted across 15 major U.S cities which included rules that seemed to be targeted directly towards Uber for example the government made it illegal to use a GPS as a meter for calculating drivers fares additionally cab drivers using their phone while driving was now forbidden
even if they were only using it for the Uber app however this isn't phase Uber they'd already bypassed the San Francisco government the Uber leadership realized they had so much power over the transportation industry that nothing could hold them back not even the government but one thing the company couldn't ignore was a class-action lawsuit from over 350 000 former and current Uber drivers the 2013 lawsuit suggested that Uber owed the drivers a minimum wage as well as sick pay while working for the company this case would then drag out for years Uber would use the
best laws possible and eventually settled out of Courts with only a small portion of the claimants for around 20 million dollars these issues slowly became incredibly common for Uber and the company was now starting to Hemorrhage a lot of money however for now this didn't matter all that mattered was that Uber would expand across the world and monopolize the taxi industry if they could do this they would be a billion dollar company of course by this point Uber was nowhere near being a profitable company but this isn't exactly unusual for Tech startups the general model
for these businesses is to operate on a loss for multiple years in exchange for user growth as once you've built the client base the business can eventually be made extremely profitable this is the same with WhatsApp Discord or like how Amazon was running on a loss for years before it came to dominate the economy and it seemed like uber was following this trajectory what was so it seemed because there were a few key reasons why this dream would never come to fresh and furuba which leads us on to the second reason for why Uber is
collapsing and that point being that they actually failed to ever gain a monopoly if you've been following my videos I'm sure you know how suspicious I am of mainstream media because oftentimes mainstream media can be the biggest impediment to understanding the truth and keeping you stuck in ideological bubbles grounding shows you how breaking news is being covered across the political spectrum they do this by gathering views from 50 000 sources around the world and puts all related articles in one place so that you can easily compare coverage by doing this ground news allows you to
see the story behind the story using data-driven analytics that looks at things such as political bias reliability and ownership of news outlets I mean check out this story about Putin announcing partial military mobilization putting the country's people and economy on a wartime footing not only can I see that there are 416 sources reporting on this but I can also quickly identify which sources have a political bias according to ratings from Independent News monitoring organizations and what's interesting about this particular story is that 43 of news outlets reporting on this are center with varying degrees of
factuality ground use also highlights the ownership data of these companies from governments to media conglomerates and independent Outlets this data is invaluable in providing you the Street behind each new story so go to ground.news 4 slash moon to try groundnuts for free or subscribe to get unlimited access and support a small team of media Outsiders working to make the news more transparent now back to the video at first Uber really did make up the entire Market of this public transportation method which is why Uber was Finding so much success during the initial phase of its
operations Uber system was the first of its kind it was revolutionary until the competitor was launched Uber essentially had a monopoly on this type of business model shutting down any kind of competition was key to ensuring longevity for the company and if Uber played their cards rights it was possible for them to keep their Monopoly on this kind of public transportation this could be done through methods like making deals with taxi companies or by offering better wages and service prices than any of their competition could afford however this wasn't the case Uber's leadership was infatuated
with the idea of disrupting the taxi industry rather than securing their foothold in the market and it was because of this ill-advised mindset that competitors soon began popping up and Uber would start to lose their footing as the Undisputed king of public transportation apps the main competition came in the form of lift the second ride-sharing app and Uber's long-standing rival Uber was coke and Lyft was Pepsi lift was marketing themselves as the underdog and a friendlier alternative of compared to Uber Lyft would focus on reducing the anonymity between drivers and passengers while also making user
trip statistics as detailed as possible Lyft was also prioritizing the implementation of extra safety features for their drivers such as the yeti background checks and the mandatory anti-sexual assault training program but Lyft wasn't the only one soon there would be a bunch of apps all competing for Uber's market share such as Bolt who focused on the European Latin American and near East markets you see in recent years both has expanded their operations to 45 countries and over 100 million customers while these similar companies are all facing problems with legal regulations their approach to expansion was
much less aggressive than Ubers along with this new competition Uber was also having issues making their entry into other countries the legality in some countries made it either difficult or completely impossible for Uber to operate in some areas because Uber is a direct comparative to taxis the app is banned in many locations Germany Portugal and Italy have all partially banned Uber while places like Denmark and Hungary have completely outlawed Uber mainly due to the up stripping money that could be instead going towards taxi organizations as well as the government and where Uber has been banned
other companies have now stepped in to fill the gap for example in Budapest voters thrived where Uber has been outlawed even in Denmark where riding hailing services are University banned bolt has a fleet of e-bikes For Hire not to mention both food which has taken over the European markets by storm a consequence of all this competition is that it has severely disrupted what was supposed to be ubazenge this solid competition has killed any dream that Uber once had of a full Monopoly on the ride hailing industry this was essential for Uber's business strategy to work
without a monopoly their plan is missing a crucial aspect but it wasn't just the competition that stood between Uber and a monopoly as everywhere Uber expanded they would cause unrest protests and violence which would soon become the third reason for Uber's downfall their public perception you see their Reckless expansion was leaving a wake of Destruction Uber's continuing war with the taxi industry was playing a massive part in this on January 26 in 2016 over 2 000 French taxi drivers protested Uber's presence in Paris they did this by blocking the roads which quickly brought the city
center to a standstill and what began as a relatively peaceful protest quickly turned violent over 20 taxi drivers were arrested for crimes like assaults and arson all targeted at Uber drivers but it was only until recently that the full details were uncovered when how far Uber had gone to instigate the growing tensions and violence coming from Taxi organizations Mark McGann a whistleblower and former Uber lobbyist gave a clear window into kalanix and the company's tactics by leaking a set of documents that was coined the Uber files thousands of these documents were leaked to the guardian
and later published in Spring of 2022 the Uber files detailed a plethora of Reckless and negligent decisions coming from the company's upper management and the name that came up the most in these League papers CEO Travis kalinick who was quoted as saying this about the violent protests in France quotes I think it's worth it violence guarantees success and these guys must be resisted now agreed that right place in time must be thought out Uber's Mission has always been to disrupt the taxi industry how however the Uber files make it clear that kalanick and other Executives
of the company put the mission of agitation above the safety of their drivers not to mention the public Uber's questionable reasoning behind sparking violence in the streets was that it would put pressure on Regulators to inhibit taxi companies protests would lead to anti-taxi publicity which would then cause Regulators to sway towards Uber's side however this is a key reason that Uber is currently in deep trouble the singular Focus that kalanic brought with him was excellent for the company's expansion yet he was more of a wartime leader rather than a peacetime one and so once the
time came for Uber to consolidate their hold on the transportation industry they had already built up too much bad blood with the wrong people the taxi companies they fought for years weren't very interested in making compromises once they knew they could survive Uber's Innovations all around the world violence was erupting between taxi drivers and Uber drivers in places like Cancun and Mexico Uber drivers would actually be hunted down and even murdered by the Mexican taxi Mafia however the epifiers made clear that Uber has no problem with this they would take advantage of these seemingly isolated
incidents all to be on top for example in early 2015 an Uber driver was assaulted by some masked man armed with knuckle dusters and a hammer who were believed to be taxi drivers Uber's Regional Executives discovered the incident and exchanged emails about how best to use the scenario to their benefits the victims in these cases were encouraged to file a police report by Uber with the aim of getting it shared with the press one part of an Uber executive's email discussed in this incident had this to say we keep the violence narrative going for a
few days before we offer the solution you see all the violence all the tension was just optics for Uber they would incite violence and then do their best to spin the blowback to their own Advantage but if Uber was willing to incite violence to sway Regulators what else were they willing to do well like all major corporations Uber had an army of lobbyists that were eagerly waiting to put large sums of money into the right politicians pockets and as usual this was extremely effective there had been many instances of countries or cities moving to banuba
then pulling out at the last minute but even when this method of financial incentivization worked out it was still a mass of expense for Uber and whenever these attempts did fail it ended up becoming more money that Uber sent down the drain Uber lift and doordash combined have spent over 200 million dollars attempting to force through a law that would strengthen all their grips on the gig economy known as proposition 22 this would give additional benefits to these independent contractors but the bill would ensure the workers are not labeled as employees Uber even directly campaigned
for this bill by advertising for it in their app despite substantial efforts from worker advocacy groups to prevent this this proposition passed in November 2020 and for a moment it seemed like Uber's multi-million dollar legal gamble had paid off but only six months later after this verdict the entire ruling was deemed unconstitutional and was subsequently nullified this meant that Uber had wasted tens or potentially hundreds of millions of dollars all for nothing and to make matters even worse for Uber this failed lobbying fell through during the height of the pandemic when Uber's cash flow was
already tanking due to the low demand for transportation but one of the worst scandals for Uber were the allegations that would surface against a number of the company's topics Executives in 2017 when a major sexual assault allegation went public it would go into further tarnish Uber's reputation even more you see earlier in the year a blog post was written by former Uber engineer Susan Fowler who alleged the culture of toxicity harassment and discrimination at the company Uber responded to the outrage by ordering and inquiry into this session and evidence was found that many of the
company's Executives were indeed complicit but what many didn't suspect was that this Behavior went straight to the top kalanick along with 20 other top-level employees were implicated and forced to sell all their Uber shares and immediately stepped down now for a company that spoke so highly of modernization it was a massive blow to their Public Image especially due to many of the Public's fears of sexual assault with Uber drivers kalanick was already on thin ice for his aggressive company growth policy and this incident was just the final nail in the coffin for his career at
Uber but since its departure things really haven't gotten any better just last year in 2021 London moved towards bringing much tighter regulations against Hooper the new legislation States the the Uber must pay a minimum wage to the over 70 000 drivers in the UK while also being required to provide holiday pay this government order is incredibly expensive relative to Uber's standard payment model and will further eat into any of the profits the company was hoping to make which brings us on to the fourth and final reason why Uber's in deep trouble they just aren't profitable
enough anymore you see all the legal files that they have to put out internationally continues to hold back their profit margins and these margins were either thin or non-existent to begin with the pandemic also hit Uber especially hard as demand for ride-hailing services was falling sharply although the company has somewhat recovered in recent months it certainly can't be called Smooth Sailing surprisingly Uber managed to make a profit of roughly 50 million in the last quarter of 2021 but they still have lost billions from their stakes in other companies and this newfound profitability is mostly result
of the price hikes that Uber has been implementing into their app in response to the growing issue of driver shortages Uber has pledged to raise their fares by 5 in London alone and if other locations follow the UK's lead enforcing Uber to treat drivers like employees this will only mean more money lost for Uber all of these problems just won't go away for Uber and this is killing their worth as a company Uber stock is currently setting around 30 a share but just a couple of years ago in early 2021 this was 60 and although
Uber's recent profits could be seen as a good sign it's still a long road to secure sustainable profits for the company and that's why investors are pulling out of uber they've seen that Uber has failed to reach the Monopoly it was destined for and because of this they're looking for Alternatives although despite everything there could possibly be a light at the end of the tunnel for Uber most of the company's problems are coming from their drivers while the self-driving cars coming around the corner and these problems might just be temporary a fleet of autonomous vehicles
would add some much needed stability to Uber's business model but even this possibility might have its drawbacks right now Uber doesn't have to pay any kind of Maintenance or even fuel costs for the cars in their payroll since that's all paid by the drivers instead Uber would have to take on all these costs themselves if they switch to autonomous vehicles additionally self-driving cars are a technology that still needs years of work before being truly safe so even though this looks like a quick it fix it won't be materializing for Uber anytime soon and this is
the fact that Uber certainly knows all too well in fact in 2020 they poured nearly all of their Capital out of self-driving car research Even after spending billions on it the program was already in Jeopardy after a lack of results when one of Uber's prototype cars struck and killed a pedestrian in 2018 it was only a matter of time but the incident still caused them to pull out of their ongoing research and unfortunately through but they don't have the money to burn and research anymore which is why the future is looking incredibly doubtful for Uber
after over a decade of seemingly non-stop controversy violence and Chaos the company's teaching on the brink of collapse and only time will tell whether they can Outlast the storm but without a monopoly self-driving cars or mass deregulation the company's survival seems more and more unlikely with every passing day
