It might not be politically correct to say this in the innovation community, but I have two problems with Uber:

• it is no longer an innovative company, but it became an unethical corporation with deep pockets.
• its detractors do nothing to be constructive against Uber, just opposing the old, established world against the digital tide-wave.

Uber is no longer driving innovation — but chose to adopt predatory behavior.

Now let me get more precise: Uber is no longer innovative. I mean, really. Truth be told, it takes just around $2M of founding to start a Uber look-alike. Granted, Uber set the way, but most cities now have many Uber competitors beyond taxis. So no, it is not rocket-science anymore.

With that said, how can Uber be the most valued (i.e. expensive) unicorn ? It raised a total of $5.9 Billions, the last round reportedly valuing the company at over $40B. That’s a lot of money, for a company that seems to lose as much as it has revenues. Uber’s promise may be about self-driving cars and (probably) fully-robotized last-mile parcel logistics. But nothing to be happening for the next 10 years or so, given regulatory and social barriers to launch such services. Meanwhile, the company’s main asset is… its brand: therefore it does everything to install it, including by extensive use of unethical, and sometimes illegal, business techniques:

• In some countries, where UberPoP was declared illegal, it keeps the service running no matter what, even paying for the fines of drivers being caught (which is also illegal).
• In other countries, it traps the drivers of competing services to either recruit them at higher rates (remember Uber is non profitable already?), or just to generate a no-show.
• It goes as far as making battles personal, where mayors bar the service from their city.

Examples like this are plenty. There is even a wikipedia page about it. So let me repeat it: Uber is not about innovation anymore, but about predatory behavior to preempt markets at a loss. I would not want to be a shareholder, unless relying on the greater fool theory.

The debate is about a new way to organize labor.

Now let’s not be mistaken, even blinded by all the reproaches that Uber gets or deserves. For it has one great merit, which is to open a new, necessary debate about how the digital revolution changes our labor organization.

In most developed economies, the industrial revolution introduced a new relationship between the those running the business (“the employer“), and the person actually getting things done (“the employee“). This relationship is generally established with a work contract and, depending on the country, union agreements and/or labor law. It materializes with institutions running this system.

With Uber, as with many examples of the collaborative economy (e.g. AirBnB…), the market built towards filling a need is shifted out of social institutions’ control. There is a price effect to that phenomenon: social institutions have a cost and, by short-cutting those, these services acquire a price advantage which is not about creating value, but about refusing to pay for social institutions. Beyond Uber’s great UX, there is social arbitrage at play.

As a result, it is logical that Uber, arguably being the most aggressive new entrant, is becoming a part of the next US presidential campaign: can society accept a company which provides a great service, in the consumer’s interest, but shows no single sign of Social Responsibility? Indeed, how can companies pretend to do good, when they all optimize their tax scheme so that they don’t pay for schools or hospitals? Answering this question is far beyond the scope of this blog, but this leads to the second problem stated in this article: Uber’s detractors are no more constructive.

Uber and its detractors need to co-design the new world

Detractors of Uber are generally those directly threatened by its activities: taxi drivers (in many countries a rent situation), but also social institution financed by the existing work contract momentum — health insurances, retirement administrations, etc. All these have financial liabilities only viable if workers pay their taxes. Governments sometimes clearly sided with them.

Problem is, these detractors have sometimes fought against Uber to defend the existing momentum. This is doomed to failure, as institutions never win against mass adoption by the people. This is all the more surprising, that in the past institutions have evolved against new services:

• Copyright holders found a way to deal with Youtube, making the service fully legal (remember when this was not the case?) in most western countries.
• AirBnB agreed to pay the same taxes as hotels in France, and no one pretends that it should be illegal.
• BlablaCar, also in the transportation industry, made sure that its drivers could not turn a profit with the service.

Now, maybe Uber likes this situation, where paying fines is seen as a cost of doing business, and a convenient barrier-to-entry for its competitors. But it is time to sit at the negotiation table and find a sane and sustainable way to conduct business. Unless Uber can introduce driverless cars fast enough.