Uber erupted onto the global stage in the early 2010s as the most aggressive of a new breed of digital disrupters, overturning traditional service models with an economic model underpinned by innovative technology. In Uber's case it was to transform the established taxi-hailing business with an easy-to-use app that seamlessly connected riders with drivers anywhere in the world. Founders Travis Kalanick and Garrett Camp first began testing the service in 2010 in San Francisco. After several refinements, and multiple injections of investment capital, Uber launched officially in that city and in New York the following year. A full global roll-out began in 2012, starting in Paris, and by mid-2018, Uber's taxi service was active in more than 700 cities worldwide. There are also a number of spin-off services including carpool shared rides, bicycle messengers and Uber Eats restaurant deliveries. The company surpassed 1 billion rides at the beginning of 2016, and then 2 billion rides only six months later. By late 2018, the cumulative total was over 10bn and rising at a rate of around 14m per day. The company has also invested heavily in partnerships with auto manufacturers to explore the introduction of self-driving cars. More seriously, though, there were a series of ever more bruising run-ins with regulators, rivals, and even the company's own investors, prompted in part by Uber's aggressive, male-dominated workplace culture which usually chose to ride roughshod over any perceived opposition. These problems reached crisis point during the second half of 2016 as a result of damaging allegations of sexual and verbal harassment, the abrupt resignation or dismissal of several senior managers, and Uber's forced withdrawal from several key markets as a result of competitive pressure or regulatory bans. Mid-2017, Uber's private equity backers demanded that co-founder and CEO Travis Kalanick step down from the company. His successor Dara Khosrowshahi spent much of his first six months fighting fires in multiple global markets, as he began to prepare the business for its IPO, which finally took place in 2019. Uber's revenues have continued to soar, though growth has slowed a little. Gross bookings have grown sixfold in four years, topping $65bn in 2019. Net revenues rose 26% to $14.1bn, but losses spiralled to $8.5bn as a result of a huge payout in stock-based compensation.
Capsule checked 18th February 2019
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Who are the competitors of Uber? Uber's main rival in North America is Lyft; international rivals include Yandex in Russia, Didi in China, Grab in other Asian markets, MyTaxi in Europe, Gett and Addison Lee in the UK and Ola in India. See Services Sector index for other companies
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Adbrands Daily Update 6th Jul 2020: Having lost GrubHub to a higher offer from JustEat Takeaway.com, Uber switched its attention last week to Postmates, currently the smallest of the major US food delivery firms. A deal was finally agreed at $2.65bn in shares. Postmates is strongest in Los Angeles and the US South West. The brand will continue to operate separately from Uber Eats, but under the overall control of the latter's CEO Pierre-Dimitri Gore-Coty. The combined business would have around 37% national share by spend, according to market watcher Edison Trends. DoorDash remains local leader at 45% while Grubhub has 17%.
Adbrands Daily Update 12th May 2020: Uber has seen revenues from its core business collapse under the global Coronavirus lockdown, even as business has soared for food delivery arm Uber Eats. To counter than imbalance, Uber has offered to acquire smaller deliveries rival GrubHub. News of the approach caused publicly quoted GrubHub's stock to soar by more than a third. Deal price is expected to value GrubHub in the region of $6bn. Uber has more than enough muscle to fund an all-stock merger of the two businesses: its own valuation has also risen to around $55bn. The combination - if its goes through - would unseat current local leader DoorDash, which had around 42% of national meal delivery sales in March 2020, according to researcher Second Measure. GrubHub was next with 28% while Uber Eats had 20%. However, there is a wide regional variation. GrubHub dominates the New York metropolitan market with 62% share, while DoorDash has a similar near-monopoly of San Francisco at 65%, and Uber Eats is strongest in Miami where it has 56% share. [Updated: Those talks ended without agreement and instead GrubHub accepted an offer to be acquired by JustEat Takeaway.com for over $7bn.]
Adbrands Daily Update 25th Nov 2019: Uber's license to operate in London has been revoked following a long-running dispute with local authority Transport for London. The company will be allowed to continue service during an appeal, but TfL's decision puts considerable further pressure on Uber to resolve multiple outstanding issues of passenger safety and security. TfL originally declined to renew Uber's license in Sept 2017, but agreed to a probationary continuation pending changes in Uber's systems."Uber has made a number of positive changes and improvements to its culture, leadership and systems" since then, said the regulator. "However, TfL has identified a pattern of failures by the company including several breaches that placed passengers and their safety at risk.... TfL does not have confidence that similar issues will not reoccur in the future which has led it to conclude that the company is not fit and proper at this time." As some issues of safety were resolved by Uber, other loopholes have appeared, not least one which allowed unlicensed drivers to upload their photos to approved drivers' accounts. As a result, TfL has discovered that in recent months more than 14,000 passenger journeys were taken by uninsured drivers. "Safety is our absolute top priority," said TfL. "While we recognise Uber has made improvements, it is unacceptable that Uber has allowed passengers to get into minicabs with drivers who are potentially unlicensed and uninsured."
Adbrands Daily Update 9th May 2019: Uber's disappointing IPO - its shares are still trading below the issue price of $45 - has prompted a further overhaul of the senior management team. COO Barney Harford and CMO Rebecca Messina are both leaving the company. Harford was recruited by Dara Khosrowshahi in 2017 from Expedia, but the CEO will now take over hands-on control of daily operations. Messina joined the company less than a year ago from Beam Suntory. Marketing responsibility will transfer to the company's communications and policies team under Jill Hazelbaker.
Adbrands Daily Update 13th May 2019: Uber got off to a disappointing start as a quoted company. After repeatedly lowering the expected price of its offering, Uber stock finally came to market last Thursday at a price of $45 per share. However, on the first day of trading the price immediately fell below that level, ending the day at $41.57. That represented one of the ten worst-ever first day performances for any sizeable IPO. The stock later fell below $40 before recovering. "One day isn't going to measure our success or failure," said CEO Dara Khosrowshahi. "You can't control the week in which you went public. We had a situation with the president and China that created a lot of volatility and uncertainty. What's important is that we got our deal done. We raised over $8bn in primary capital, which is going to be an important engine to grow." Rival Lyft, which floated in March, also fell back after an initial surge and is currently trading 30% below offer price. For the record, Facebook too got off to a bad start after its 2012 IPO, falling below offer price on the second day and remaining there for more than a year. It currently trades at five times its offer price.
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