Uber’s India Growing Pains

Driver and rider matching service Uber has brought us good news and bad news, and not for the first time, for those at the lower end of the sharing economy food chain, the good news does not apply. That is because the only good news is the revision in Uber’s value – now estimated at more than $40 billion. That is excellent news for those who have invested in the venture.

However, and here we encounter a significantly sized however, their number does not include the drivers, those who have invested their own money in cars, only to find their rewards arbitrarily curtailed as Uber has imposed price cuts – and therefore wage cuts – in the USA and UK. And it does not include the customers, whose experience of the service has not always been good.

Indeed, while CEO Travis Kalanick told of “significant growing pains”, and that “The events of the recent weeks have shown us that we also need to invest in internal growth and change. Acknowledging mistakes and learning from them are the first steps”, he may not have foreseen the recent event in New Delhi that has trashed Uber’s reputation across the Indian sub-continent.

As NDTV noted, “With one of its drivers arrested on rape charges and its executives to be questioned today, Uber sent a text message today to other drivers, urging them to ‘stay united’”. The message concluded “Uber is not going anywhere”. Not going anywhere in another sense, too: “this afternoon, it was banned from offering any services in and around Delhi by the capital's transport department”.

It gets worse: “the police says that the company did not conduct a basic police record check for the driver, Shiv Kumar Yadav, who was arrested last night in Uttar Pradesh ... A young woman executive says he raped her on Friday night in an isolated part of Delhi before abandoning her on the road near her home in North Delhi”. Would Kalanick like to venture a comment here?

“We will work with the government to establish clear background checks currently absent in their commercial transportation licensing programs” pontificated the modern-day Cornelius Vanderbilt, which, in not so many words, means that it was someone else’s fault. Like insurance is someone else’s problem. Like regulations are someone else’s problem. Except Trav and his gang cannot deflect this one.

Of course, Kalanick and his fellow investors could just work within the rules that Uber’s competitors play by, but that is not the Uber way. Rules are for Taxis, and Taxis are, in Trav’s own words “assholes”. When you start from the premise that rules are for assholes, it is never going to end well. Robert Reich asked yesterday “is Uber a $40 billion success story or a dangerous scam”?

He might wish to ask that. I couldn’t possibly comment.