While Uber has changed how the world travels, the company continues to be plagued by scandals, and this could bring it to its knees. The ride-sharing company is consumed by mismanagement, pervasive harassment, and a lawsuit from leading tech giants for technology theft. Passengers are voicing their frustrations. Investors are questioning Uber’s potential, and most of them are abandoning the company. In fact, a recent report shows that about four mutual-fund companies have marked down their investment in the company by as much as 15%. Uber is slowly drowning, and its team needs to do something.
The company needs new strategies, and most importantly, it needs to restructure its business model. This does not mean that the ride-hailing company should do away with the business model that engineered its rise. No! There several strategies that can help save Uber. However, Uber’s self-driving car program might not save the company from drowning. Here is why.
The Issue of Funding
It’s true that Uber’s sales continue to grow, but it’s still losing billions of cash. In 2016, the company lost $2.8 billion, excluding its China subsidiary. Factoring in its China business, which it sold in July, the loss is likely greater than $3 billion. The $3 billion loss does not account for employee stock compensation, automobile purchases, certain real estate investments and other expenses. Following the release of this loss statement, investors are now questioning if Uber will ever make a profit and most of them have marked down their investments. This means that the company will not manage to stay funded for long and it might be forced to abandon its self-driving car program.
World Adoption of Driverless Cars
Is the world ready for self-driving cars? Yes, but we have a long way to go before driverless cars become a norm. Our driving infrastructures, safety regulations, and road laws were designed for humans at the wheel. This means that it will take us some time to fully integrate self-driving technologies at the street level. Will Uber survive until then? I don’t think so. Why? I imagine the company will burn through their funding and collapse by the time the world adopts driverless cars.
High Insurance Rates
If you buy a self-driving car today, it will cost you about 30% more to insure it. However, there a few insurance companies that offer cheap auto insurance quotes for autonomous vehicles. Uber and other players in the autonomous world should partner with these insurance companies to choke competition from conventional vehicles and also attract more buyers.
Uber is not alone in the making of next-generation autonomous vehicles companies such as Google, Tesla, and Ford. These companies have the advantage of operating in an autonomous industry. Google, for instance, has been in in the autonomous industry since 2009 and has a more experienced staff when compared to Uber. Lyft, another ride-hailing company, announced it would enter the autonomous industry by 2018. This means more competition for Uber. For Uber to survive, it has to change its business model and come up with a new product that will help the company demonstrate a clearer road to profitability. If Uber focuses too much on its self-driving car program, it will run out of business.
Due to the scandals and complaints from investors and passengers, Uber has been forced to shuffle its team many times. These reshuffles have negatively affected its self-driving program. There is also the lawsuit from Waymo that threatens Uber’s future. If Waymo wins, investors will stop funding Uber’s self-driving program and Uber will be kicked out of the autonomous world.
Uber is facing stiff competition than ever in the self-driving world. The team at Uber has to find new strategies to cope with competition. The company should improve their product to guarantee profitability. Self-driving cars will revolutionize the worlds, but Uber should concentrate more on maintaining its current client base.