I got this book free via my Amazon prime kindle book subscription.. I'm glad that I didn't pay full price.
This history of Uber has lots of detail that is probably of little interest to those who are not "Silicon Valley" insiders. Although I founded a (failed) startup and worked in Silicon Valley for much of my career, I found myself skipping over much of the material.
The book provides a good portrait of Travis Kalanick, the CEO of Uber, and the early days of Uber. I did not know, for example, that Uber started out as an app to schedule "black car" (limousine) rides.
The author mentions in several places that Uber was burning through vast amounts of venture capital funding, in part driven by the ill-fated attempt to build an Uber ride-hailing company in China. Also discussed is how Uber stock went down when it was listed on the NASDAQ stock exchange. What is not discussed in the book is the fact that Uber has never had a sustainable business model or the kind of business that venture capital funds put money into in the past.
Venture capital funds are high risk high reward investments. In the primordial days of venture capital they invested in chip companys like National Semiconductor, Intel and Advanced Microdevices. Later they invested in software companies like Microsoft and Oracle. The hallmark of all of these investments was exponential growth in profits.
Once a semiconductor plant is built, the incremental cost of turning out each new chip is small. The incremental costs are even smaller for software. The incremental cost of a copy of Microsoft software or an Oracle database is basically zero. This gives these companies huge profit margins, even after factoring in capital and development costs. For venture firms that invested in these companies, there was also a huge appreciation that countered the investments that did not pay off.
In contrast to semiconductor and software companies, let's consider a taxi company. A taxi company has high captial costs in the taxi's. The business can only be expanded by buying additional taxis and drivers. There is also constant pressure on profit margines since the only barrier to entry to the taxi business is purchasing a car and the right to offer the taxi service which was a license often referred to as a medallion.
For the taxi customer there were lots of problems with taxis. It could be difficult to find a taxi when you wanted one and when you called a taxi service, they didn't always show up. The taxi's were often dirty and the drivers could be clueless about finding the destination. This was the business that Uber set out to "disrupt". As the book notes, they did this by completely ignoring existing metropolitan transportation regulations. Remarkably, the cities let them get away with this, drastically reducing the value to taxi medallions that taxi businesses has paid dearly for (in the case of cities like New York, hundreds of thousands of dollars).
By building the Uber app and leveraging the iPhone (and later the Android phones) with their support for GPS and graphics, Uber could create a much better taxi experience for it's users. What Uber could not change is the basic nature of the taxi business. Every taxi ride requires a car, a driver and insurance. The car is a capital expense. The incremental cost of adding new customers is high because of these costs.
Uber's business model moves these costs to the drivers, who are not Uber employees, while undercutting the cost of a taxi ride. There were two things that made this possible. Uber took avantage of their drivers and they lost billions of dollars, which was paid for by venture capital. Super Pumped does recount the rapid turnover among Uber drivers who discover that they are making less than minimum wage by driving for Uber.
Much of this detail seems to have escaped the author of Super Pumped. Or if he knows it, he may have felt that it would detract from the heroic startup story. The story might not be so dramatic if Uber was described as an aberration of modern venture capital and the ability to see to a greater fool.
The problems with Uber's business model persist to this day. Uber remains a taxi business. This is one reason that Uber stock fell on the market open when the company "went public". Uber continues to lose money and the best outlook for the company is a thin profit margin. All this turned out well for the venture capital funds because they were able to unload the stock in the public markets. But a greater fool investment strategy is not something that a venture fund would have followed before the "dot-com" boom.
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Customer reviews
The author does a good job in putting together all the main pieces in Uber's trajectory from local high-end chauffeur service to global transportation giant, but all the information here was already available on tech coverage websites for ages so there's nothing new at all. The book has its fair share of romanticization and hero/villain picking.Some things like spelling São Paulo incorrectly indicate that this is one of those books they write and edit in a hurry. Basically a long Medium article sent to the printer.
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Top reviews from other countries
Iain Webster
Well worth a read
Reviewed in the United Kingdom 🇬🇧 on October 5, 2020Luke software developer
Well written detailed factual account of a start up that went global. Strongly recommended
Reviewed in the United Kingdom 🇬🇧 on November 25, 2019P. Kapoor
Great drama - Very easy read
Reviewed in the United Kingdom 🇬🇧 on January 8, 2020AKF
Very vindictive of Travis and the leadership team
Reviewed in the United Kingdom 🇬🇧 on December 27, 2021Amazon Customer
Well written and exceptionally well researched
Reviewed in the United Kingdom 🇬🇧 on September 30, 2019
