Why Uber is the Kanye West of Silicon Valley

Ride-sharing mobile app Uber has been absolutely bombarded by media outlets this week.

The press has been a double-edged sword for the five-year-old startup, but the underlying message is clear: Critics can hate on Uber all they want, but its disruption of public and private transport simply cannot be stopped.

Here’s a quick recap of the recent surge in coverage:

1. Uber is evil, and executive Emil Michael is an “asshole.”
2. Uber is raking in a ton of money.
3. Uber has developed a key partnership with Spotify.
4. Uber loves Obamacare.

Emil Michael is an “Asshole”

This first topic has been by far the loudest story surrounding Uber this week. It’s also the least meaningful in terms of actual business… but hey, it’s good drama nonetheless.

Basically, Senior Vice President of Business Emil Michael was caught with his foot in his mouth after making some comments over dinner that he believed were off the record.

The Uber exec was reported to have said that in order to shut down any bad press against Uber, the company could blow “a million dollars” hiring a team of private investigators to expose the personal lives of media critics.

Specifically, Michael targeted avid critic Sarah Lacy, claiming he already had specific information on her personal life she wouldn’t want made public.

Needless to say, the Senior VP quickly learned what a terrible idea it can be to mess with the press. Brutal and hostile headlines immediately began flying from every direction, including gems such as:

• “Uber has an asshole problem”
• “Hey, Emil Michael, COME AT US, bro”
• “Sorry, Travis, but I’m boycotting Uber”
• “Why I Deleted my Uber App”
• “If you Care About Women, Delete Your Uber Account”
• “Thiel: Uber ‘most ethically challenged company in Silicon Valley'”

As you might expect, Michael was forced to retract his comments and quickly issued the following statement:

“The remarks attributed to me at a private dinner — borne out of frustration during an informal debate over what I feel is sensationalistic media coverage of the company I am proud to work for — do not reflect my actual views and have no relation to the company’s views or approach. They were wrong no matter the circumstance and I regret them.”

CEO Travis Kalanick also apologized for Michael’s comments across 14 separate tweets, making sure to clarify that:

Kalanick went on to speak about the importance of learning from your mistakes, earning the trust of the community, and showing positive principles. Basic damage control 101.

Despite the strong media backlash, though, Kalanick showed no indication of formally reprimanding Michael for his comments. Uber may be willing to pander to the press to some extent, but it’s clearly not willing to change the way it runs its business.

Attacks on Uber’s business practices are nothing new, of course, and throughout it all, Kalanick and company have basically held the following stance:

An actual photo of super-bro CEO Travis Kalanick

Over the last year, the company has come under heavy fire for its unfair treatment of drivers, surge pricing during emergencies, sexist comments, and sketchy sabotaging of competitors, just to name a few criticisms.

Yet in the wake of that negative press, Uber is growing its business faster than virtually any company in history.

Uber is Raking in an Obscene Amount of Money

At the same time Uber started coming under fire for its “attack on journalists,” Business Insider’s Henry Blodget revealed that Uber’s projected revenue for 2015 is now at a striking $10 billion.

For perspective, Facebook (NASDAQ: FB) took 10 years to hit that figure, while Uber has only been around since 2009.

Consider also that Twitter’s (NASDAQ: TWTR) annual revenue is just $1.17 billion (about one-tenth that of Uber’s) and Tesla’s (NASDAQ: TSLA) annual revenue is only $2.37 billion.

All said and done, Uber’s revenue figures represent 300% annual growth on the top line in 2014. If the company hits the expected $10 billion mark by 2015, that would be another 300%.

In other words, the company is looking at 900% growth in just two years.

From an ethical standpoint, critics can hate on Uber all they want, but it doesn’t change the fact that these figures are absolutely mind-boggling. There is simply no level of media backlash that could stop the company at this point (it’s been a good effort, though).

Analysts are expecting Uber to go public within the next few years at a staggering valuation of $50 to $100 billion. That’s up to five times the size of its latest valuation at $18 billion.

Uber & Spotify Team Up

For those unfamiliar with Spotify, it’s essentially like Pandora radio but better. The service allows users to access a massive database of songs, create playlists of their favorite music, and listen to personalized radio stations based on what they like.

Most importantly, these playlists and stations exist on the cloud, so users can access their music virtually wherever they want, which is why Uber has officially teamed up with Spotify to allow its passengers to play their music directly from an Uber driver’s car.

And while this might not seem like all too big a deal at first glance, it’s certainly something that’s likely to attract more customers.

For one, there are few things more awkward than a silent cab ride or having to tell strangers their music isn’t to your taste. Allowing passengers to play their own music creates a comfortable, personalized experience and makes Uber more appealing than ever.

Further, the partnership gives Uber direct access to its target market: young and tech-savvy consumers. Spotify has access to over to 40 million listeners who fit at least one of these descriptions, which provides Uber a strong avenue for customer acquisition.

Uber Loves Obamacare

The fourth and final focus of media attention this week has been on a comment by Kalanick regarding the merits of Obamacare — the merits for Uber, that is.

Unlike traditional taxi companies, Uber does not actually act as an employer. Uber is simply a service connecting drivers to people who need a ride, so Uber drivers (a.k.a. partners) file as independent contractors.

This means Uber doesn’t have to offer its drivers health insurance, so the company benefits when individuals have access to affordable plans.

Whether or not the Affordable Care Act actually provides more affordable plans is still a topic of debate, but Kalanick’s position on the issue is clear: the legislation has been “huge” for Uber’s business.

The CEO is quoted saying:

“The democratization of those types of benefits allow people to have more flexible ways to make a living. They don’t have to be working for The Man.”

Of course, this is all just part of Uber’s standard rhetoric. Its partners may technically qualify as independent workers, but for all intents and purposes, they work for the company and are required to do what it says if they want to keep making a living.

Closing Remarks

Whether or not Uber is truly the evil, “asshole-cultured” corporation much of the media wants us to believe it is, I can’t say for sure. What I can say for certain, though, is that the company is far too disruptive for any of that to actually matter.

Kanye West is a jerk, but people still buy his albums. Chick-fil-A is run by bigots, but we still eat its chicken. And Comcast is the most hated company in America, but we still use it for our Internet.

Sometimes a product is so good, it doesn’t matter who’s selling it, and Uber is the new epitome of that kind of business.

Until next time,

Jason Stutman

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