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Case Studies

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Digital Ecosystems

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Financial Services

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Smart Cities and Transportation

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In Defense of Uber: An Objective Opinion

Mark Suster Monday, 24 November 2014.

The story on Uber has been written about ad nauseam, which is why I've been reluctant to weigh in. But enough people have asked my perspective so I decided to weigh in with my non-conformist view. I love Uber and I don't believe there has yet been a real scandal. Grievances – yes. But scandal? I'm not so sure.

shutterstock 201284519For starters – I'm not an investor in Uber. I wish I were. I had a chance to be in the seed round and unfortunately didn't do so. I didn't invest in any of their fine competitors either like Lyft, Sidecar, Hailo, etc. I have no overt biases (we all have subconscious ones). I'm not friends with Emil Michael – I've never met him.

This post is nothing than a bystanders attempt to put this situation in perspective.

1. Is Uber evil?
No. That's silly. It's a fantastic startup that has had a amazing impact on society. It's not just about people like me who can (and do) turn up in nearly any city in the US and immediately book a ride. On that front it has revolutionized my life. No more 45-minute queues at airports, no more stuck in the rain with no ride. I attend meetings and when they are 15 minutes or so from being done I subtly pull out my phone and get Uber ready to whisk me off to my next meeting. As a consumer I LOVE Uber. It is perhaps the best new product of the past 5 years in terms of improving my professional life.
But this is a high-class problem they solve for me. I know that. I was at an alumni dinner at UCSD (I am on the alumni board) and a group of people were talking about how their kids use UberX to get rides home from parties at night. This story has been repeated by many parents I know and by many 20-somethings in LA. Between the ages of 16-36 I have seen countless people drink and drive. It's mindless. If Uber (and it's competitors) can make a dent in this – hallelujah.
Hardly "evil."

2. Is Uber too aggressive at business practices?
Yeah. Probably. But let's also put this into perspective. They were a little too fierce in their competitive practices against Lyft to sign up drivers. At least that's where my internal compass lands. They seemed a little excessive in trying to make it hard for their competitors to raise capital.

But let's put this into perspective. As somebody who has to rub shoulders with big tech companies often I can tell you that there is much blood spilled in the competitive trenches of Apple, Twitter, Facebook, Google and so on. Changes to algorithms. Clamping down on app ecosystems. Changing how third-parties monetize. Kicking ecosystem partners in the nuts.

Be real.

It's a brutally competitive world out there because there are extreme amounts of money at stake. I've been on the sharp end of it and it doesn't feel nice. And I pick myself back up, dust off and think to myself that I need to think through the realpolitik of power and money and competition and no matter how unpleasant it is – it's a Hobbesian world out there. It ain't pretty – but it's all around us.

Powerful countries & companies act powerful because they can. And others have to fit in around them no matter how much we don't like that.

Uber is no more aggressive than our industry's finest. I'd say less so in my experience. So the only thing that can be driving this all is that Uber has become un-liked for a period of time amongst the press. Facebook was there once. So was Microsoft. If Uber continues to grow and innovate this will be a storm in a teacup. They clearly need to soften their image but trust me: Larry Ellison, Marc Benioff, Tom Siebel ... none wallflowers or avec soft elbows.

3. What about opposition research on journalists? Isn't that terrible?
Yes. It's pretty bad. But Emil Michael saying flippantly at a dinner that he wants to do oppo on negative journalists and Sarah Lacy in particular is not the same as actually doing it. It was a stupid thing to say – especially in front of journalists. But if Emil's friend who was at the dinner is to be believed – it didn't sound so much like an impassioned plea as a throwaway comment in frustration. Impolitic? Sure. Scandal – me thinks not.

Clearly the press don't want to have rich, powerful companies researching their private lives. Hard to blame them. Which is why such a shit storm has emerged. But it's hard to say that some of the coverage of Uber hasn't been vitriolic and long on emotion over substance. It has bordered on obsessive from one journal more than others and it's somewhat hard to attack a company for smear tactics with, well, smear tactics.

It's no wonder this post "Here Ego Again" is making the rounds as a counter criticism. This article had much resonance with me.

4. Aren't they screwing over drivers?
It's easy to see why companies like Uber can get mad at the part of the press that can be lazy. Case in point, "Why Your Uber Driver Hates Uber" is a blog post dressed up as journalism. The author followed an Uber driver around and used it as evidence of why Uber drivers hate the service. The author follows around a single driver for a day to show evidence that Uber drivers en masse hate the service.

"There is no training. They basically hire people from the gutter. They don't care. They just need bodies. They need somebody who can get their own cars, fit the best possible GPS, and start driving."

Ironic that an article purporting to uncover a company with no training would publish pseudo journalism about the Uber experience. If you want to pretend to cover Uber drivers at least do a survey that covers enough drivers to know what a representative group of them think. Journalist, train thyself.

I've been using Uber longer than most. I was at the first pitch meeting they ever did to raise capital. I must have been one of the earliest Uber users when the service was still called UberCab. I have been so interested in the experience that I have randomly asked probably 50 drivers over the past few years what they think.

A non scientific (and not trying to pretend to be) survey for me:

- Overwhelmingly drivers have had a good experience
- Some have existing black car services and use it to fill in extra hours. Some have switched over permanently and are    making most of their earnings on Uber
- Many complained that the margins are too high for Uber. But when pressed they equally complain about their existing  service also
- Yes, I've taken many UberX's also. I get a mixed bag of feedback on Uber but generally it has been pretty positive
- My sample is over years. I have Ubered in SF, LA, NY, Philly, St. Louis and Chicago. I have Ubered in Boston. I've had  good experiences and bad experiences. But compared to taxis? JFC. Uber is a walk in the fricking park. A joy. A pleasure

5. Isn't Uber just mean? I mean people love Airbnb – so what is wrong with Uber?
I read this morning that Airbnb is the company that embodies love and fulfillment because apparently their hosts LOVE Airbnb while Uber drivers apparently hate the company.

This may be true. But if you're an Airbnb host you're making money by renting out your apartment which doesn't involve you spending hours on actual work. Driving an Uber is no different that being a hair stylist, waiter or prep cook. If you surveyed those employees how many would love their employer – huh? Of course Airbnb hosts love the company. It's found money.


And there's always a but.

If you interview the neighbors of Airbnb you'd get a very different article. Why don't you ask how much they love their apartment buildings that are zoned for residential purposes turned into quasi hotels? I stayed at a friend's house near Washington DC and their posh neighborhood has an Airbnb house that had become a party pad. It had been rented many times to people who threw large parties. They were super frustrated.

I don't hate Airbnb. I actually quite like it. But I'm just saying if journalists are going to follow around an Uber driver as proof that Uber is rotten at the core and others are going to use an Airbnb gathering to say one company has a better moral compass than the other I sort of feel we ought to have an apples-to-apples comparison.

Both companies are hugely innovative. Both have brought new wages to the masses. Both push against regulatory boundaries. Both casue externality problems that we as a society have got to address. One of these companies has a press problem. I doubt they have a customer problem.

6. Was there any scandal at all?
In my opinion there is one big potential scandal and people are chasing the wrong story.

For me the real story is the privacy concern caused by this G-d view. Uber employees have allegedly tracked people's journeys and apparently it hasn't been that hard to do.

I will tell you that if I were Uber this is the one thing I would plug up immediately and enforcing swift punishment for violations. If the public doesn't trust you with basic confidentiality as a service you're toast.

This is covered in this poignant article outlining that too many startup companies snoop on users. Imagine if Google employees could track what you search. And even in incognito mode! Remember when Quora started publishing which articles you were reading to others? Or when Facebook Beacon was publishing what you had purchased to others?

This is a real startup problem. Increasingly startups want access to our emails. They want us to store our documents. They want to track where we eat, sleep and take taxis. They want our customer records. They want our anonymous dirt. Will users continue to trust 3rd-party services if employees can violate privacy data?

In this world there should be zero tolerance for companies that allow any employee visibility into individuals actions. Imagine if knew your prospect list of what you wrote about your prospective clients? What if Twitter employees could read your DMs? What if anonymous apps let their employees know who published which posts? Or Google employees have access to your email?

Has Uber been a bit aggressive in business practices? Probably a bit. Are we in an industry where our most beloved tech providers play hardball, too? Absofuckinglutely. We just turn a blind eye because we love them.

Was it dumb and insensitive to say Uber might target journalists for opposition research? Of course. Bone head. Do I really believe they were going to spend $1 million / year on it? Not really. Do I believe it was a huge scandal? Not unless I see more evidence than I've seen today.

What would cause me to delete Uber – a brand and product I love – from my iPhone? If I thought Uber employees could track where I travel, when I travel and if I felt any employee was going to use this information in some way – I would shout from mountain tops.

Until then. I'll be Ubering.

Originally published here:

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Mark Suster

Mark Suster

Mark is an American entrepreneur,angel investor and investment partner at GRP Partners after having worked with GRP for nearly 8 years as a two-time entrepreneur. Most recently Mark was Vice President, Product Management at (NASDAQ: CRM) following its acquisition of Koral,where Mark was Founder and CEO. Prior to Koral, Mark was Founder and CEO of BuildOnline, the largest independent global content collaboration company focused on the engineering and construction sectors, which was acquired by SWORD Group (PARIS: SWP). Earlier in his career, Mark spent nearly ten years working for Accenture in Europe, Japan and the U.S.

Mark received a BA in Economics from the University of California, San Diego, and an MBA from the University of Chicago. He is a dual citizen of the US and the UK.

Mark founded Launchpad LA, a program designed to help mentor LA's most promising first-time startup CEO's. He runs the Southern California Venture Capital Alliance (VCA) and is on the board of advisors for the venture capital fund of the UCSD Rady School of Business.

Mark sits on the Boards of RingRevenue, GumGum and He was formerly on the boards of EMN8, Qualys, Koral and BuildOnline.

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