Uber IPO couldn’t raise the expected amount – Just being a brand is not the enough – Things you should keep in mind to start your own taxi booking business
Uber commenced below its IPO price on Friday but they ended up at a lower price which was more than 7% less. The valuation was even below $80 billion. Uber had said in December that they were expecting more than $120 billion.
Even though the founders and early investors have earned well, those who are late and some of the retail investors may not be earning much of profits. The company needs to solve the difficulty of serving a two-sided market profitably. Uber’s unexpected loss is not only disappointing for the investors but it can also prove to be a turning point in the history of Silicon Valley. The Uber IPO has capped an era distinguished by big investments in small ideas. They have had a lesson that a stubborn unwillingness to grapple with larger challenges facing society and the world is not going to work anymore.
Uber started as a business idea in the year 2010 in the wake of the great recession. Since then, there has been no looking back as it has been fueled by a decade of low interest rates. The investors have always searched for ways to stay ahead of inflation. They have even put in money in the high-risk model which was promising enough to provide high-reward venture capital sector. Whenever the industry seemed like it was about to slow down the late investors gave it the motion. The recent investment was by Masayoshi Son who invested $100 billion Softbank vision fund.
But these highly funded startups solved the problems only for wealthy young people in major cities. The startup ideas were related to taxi booking apps, food delivery apps, dating apps, hotel booking apps, etc. Some ideas were much worse than others. But there were some ideas that were truly innovative. These ideas actually fulfilled the customers demand by solving some crucial problems for the customers. A lot of companies took increasing mobile technology as a staircase to climb for success. But they were not easily accepted easily in Silicon Valley.
Some of the reasons for the failure of the giant Uber and other big companies are as follows:
The startup companies with great ideas created a real business and had real and growing revenues. These revenues were not earned by the dot com companies from the era of 1990. The consumer startups too were not generating any consistent profits. The venture capital was plentiful in the past years and the companies could stay private for a longer period of time. Uber also remained as a private company and did not go for IPO instantly.
Lack of diversity:
Most of the highly-funded startups in the era when Uber was formed were founded and led by the people of a certain background who looked for similar traits while hiring employees also. This way of hiring led to a lack of diversity and closed opportunities for deserving workers from other backgrounds. Uber also faced many complaints regarding the same fact. The number of complaints was so many that they had to hire an independent investigator.
Asking for forgiveness instead of permission:
Starting with Uber, most of the companies have followed a trend of not waiting for government approval. The companies like Airbnb and scooter startups Bird and Lime believed that waiting for the government approval to operate might have stunted their growth. However, in their rush, they ignored regulators and did not even consider the idea that they might cause border problems. Uber and Lyft, in their competition, have forgotten that they have made the traffic worse in San Francisco. Not only the taxi booking companies but also the e-scooter sharing companies have their scooters littered on the streets in San Francisco and Santa Monica before the cities banned them.
Visible depiction of income inequality:
Income inequality has been always an issue of concern. Silicon Valley is also not left untouched by the income inequality scenario. The rich are getting no doubt richer but the ride-sharing drivers are not getting enough wages. The benefits are minimal for the drivers whereas the tech workers enjoy all the employee benefits.
What lies in the future?
Well, the last few years have shown hope. The tech industry is going through a phase of serious introspection. Most giant companies have been questioned for their business models. People are talking about machine learning and artificial intelligence and its effects on society as it is still in its early stage.
Being a brand is not enough. You need a business model that can provide equal opportunities to the employees, adhere to the rules and regulations of the government and also have some fresh ideas to provide the solutions for the problems currently faced by humans.
If you are looking to enter the on-demand economy as a startup, make sure you go through these points and keep a track of how your business model is going. Building something useful for society in the need of time. Be it on-demand taxi booking app, e-scooter sharing app, food delivery app, grocery shopping app or any other on-demand apps, you need to make sure that the apps are designed for the benefit of users instead of just earning profits. The ‘I can conquer all’ mindset will not let you run in the long race.
Coruscate Solutions can help you with the taxi booking mobile app development solutions for your on-demand business. We have an excellent team of developers who can design and develop an amazing app with a smooth user interface. Our dedicated team of developers is working every day to learn about more and more features to be added in the apps. They also dive deep to find out the scope of each app which can prove helpful to you. If you have an idea for an on-demand business, feel free to contact us through the contact us form for a free consultation. We can help you to validate your ideas and suggest you the most reliable and robust solution for your business.