Is Uber valuable?
An article this week asked the question. It’s a company valued at $91b that still loses money.
It should be cheap to run because it’s essentially a platform brokering deals between buyers and sellers which doesn’t employ its drivers.
Commentators are divided over its future success. Many believe it will struggle to ever become a stable growth business generating attractive fee cash flows. Most raise its ‘tarnished’ reputation and toxic relations with multiple stakeholders. The future is uncertain, but four things are clear:
It has quickly established its brand name as one of the most recognisable on the planet
People seem to love the service it delivers. There are 100m users every month
It has shaken up a previously moribund sector and provided real customer value – otherwise 100m people wouldn’t be using it every month
It has provided flexible work to people all over the world. Many looking to establish themselves in a new town with very limited work options to consider or transitioning from another kind of work in a shaken-up economy
Uber is a little like WeWork, which did much the same in the workplace world and which will leave a positive lasting legacy, I believe. So a mixed report card so far for both firms, and of course their trailblazing founders left when the heat came on.
Uber and WeWork may or may not succeed in the long-term on the terms by which they are most often evaluated in the financial press and have their moral critics but they have made a difference to the lives of millions of people. They’ve also showed how a brand can be built fast from nothing, shaken up a waning sector and injected energy into our everyday lives with imagination and daring.
So the answer to the question is…
It depends on how you define value.