The auto industry was pretty lively in 2017. Some might say too lively. Every week seemed to bring a new out-there concept car designed to tackle a future or electric mobility or vehicles that can drive themselves. But the biggest car story of the year was probably from Uber, for all the wrong reasons.
World of Tomorrow stuff, but even though Tesla was officially served notice in 2017 that it won’t have the electric-car realm all to itself for much longer, there was another major transportation story that loomed over everything else.
It was Uber – but it wasn’t Uber in a good way.
Uber is the biggest challenge to the traditional auto industry. Not because of the company, valued at over $60 billion (that’s more than General Motors’ market capitalization), is fulfilling its obvious objective of undermining the taxi business in big cities. Rather, because Uber has the reasons and potential to upend the century-old model of car ownership.
Much rests on that model: trillions in auto sales, a massive global workforce, vast assets in the form of factories, an enormous network of marketers and dealerships, billions in yearly advertising, a legacy automotive media, and above all, the financing that makes buying and leasing individual cars and trucks possible.
It’s now plausible in places where car ownership was once a given that Uber – and Lyft and other ride-hailing services – will offer an alternative. If fully self-driving cars arrive in the next decade or two, the transition will accelerate. Auto industry veteran and former GM executive Bob Lutz recently argued that the die is already cast. The podmobiles are coming. Say goodbye to your Corvette.
Uber entered an epic crisis in 2017
For all of Uber’s disruptive potential, however, the company entered an epic crisis in 2017. This occurred hot on the heels of its stunning autonomous technology roll-out in Pittsburgh, so it was all the more glaring.
Uber’s business practices have always been extremely aggressive and not always lawful. To achieve its tremendous market share, dominating ride-hailing with seeming monopoly power, Uber has flouted laws, tangled with governments, and invited the ire of the weakened taxi industry.
This rough-and-tumble culture was exposed for what it was in 2017 – a challenging place to work, especially for women – and the problems went right to the top. CEO Travis Kalanick stepped down, in the most visible corporate deposing since Steve Jobs was forced out at Apple several decades ago (under very different circumstances, obviously).
Uber has to survive this Silicon Valley economic cycle, just as Facebook had to survive the financial crisis. Too many people have invested too much money in Uber.
Uber’s in a precarious position
But 2017 revealed what a precarious position the company is in. For a monopoly, it is burning through an astounding amount of cash. Its main competitor, Lyft, was able to set itself apart culturally (if not in terms of total value) in 2017 and peel off the users when the latter company started to serially botch its response to workplace harassment and the Trump administration’s immigration policies.
Uber could change everything about how we get around, but it’s currently dealing with the dangerous period between its founding and its Facebook-like arrival in the public markets.
The year that’s now closing out proved just how dangerous the situation is for them. That’s why it was the biggest car story of 2017, for all the wrong reasons.