ML-Implode News - Why Uber Is Doomed

"I thought I would try it out because I was desperate," said one driver who learned about the company after reading an online ad and declined to be named for fear of retribution in an interview with Jalopnik. "Back then, the pay was quite a bit more than it is now. There have been a number of fare cuts since then. So, at the beginning, it was kind of different because not only was the pay higher, [but] because the pay was higher, there was a different type of customer that was using the service."
He added, "And then contrast that with now with uberPOOL, a driver can be getting paid just 80 cents for a ride, and all the sudden you have these people who might've been taking the bus, and now all the sudden they're your boss for 80 cents and you better hop to and do what they say with a smile, or you're going to get a 1 star rating, if not [physically] assaulted in some cases."
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"Customers want to get from A to B quickly, pleasantly, and at a reasonable price," said Erik Gordon, a professor at the University of Michigan's Ross School of Business. "The Uber thing worked because it was cheaper and, initially, it was more pleasant than the typical taxi. So that's why it worked. But people don't have loyalty to Uber, not even the drivers. The drivers tend to drive for both" Uber and Lyft, its chief competitor and a company with a remarkably more cuddly public image, albeit one that is probably not deserved.

But it's the driver classification as contractors that's routinely staked out as potentially devastating for Uber. A $100 million settlement for a high-profile federal class-action suit over driver classification was denied last year, but the judge in the case believes Uber has enough wiggle room to readjust and still survive, despite the company's insistence that it would have to wholly restructure its operations. While that case remains pending, more suits over the driver classification have continued to emerge.
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This hinges on an autonomous driving fleet. Despite optimistic overtures from automakers and self-driving car start-ups, the likelihood of that coming to fruition, if ever, is decades away. Ford has an optimistic plan to roll out fully-autonomous cars by 2021, for example, but they would be limited to use in a geo-fenced area.

Kalanick himself has said the development of self-driving cars is "existential" to Uber. Labor drives up operating costs; removing 160,000 drivers from the equation makes it a lot easier to balance the books. Though Uber has a reported $11 billion war chest stowed away, by burning through billions at a rapid clip, the path and timeline to becoming a driverless car company -- however that would materialize -- is muddled.

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Why Uber Is Doomed