Uber cripples cab company
It has become a cliché in the technology world that everything moves faster now than it used to. The cost of starting a company is lower. The time it takes to get to market is shorter. The ability to disrupt even established and powerful players is greater.
Clichés must be challenged because they often mask a shallow understanding of the facts. In this case, however, the cliché is true.
Take, for instance, the blink of an eye it has taken to all but cripple the U.S. taxi industry. Lyft and UberX (Uber’s ride-hailing app for amateur drivers, versus its earlier service for licensed limousines) both started in 2012. On Friday, San Francisco’s Yellow Cab cooperative filed for bankruptcy protection, a development Fortune’s Kia Kokalitcheva previewed two weeks ago. At the time, it appeared Yellow Cab’s financial woes had more to do with a personal-injury damage award, than competition from cleverer upstarts. Yet according to court papers examined by the Wall Street Journal, the San Francisco taxi organization cites worsening business conditions as a reason for its Chapter 11 filing. (The co-op intends to continue operating as usual.)
It’s a safe bet that no healthy business would experience weak business in a market as overheated at San Francisco. The city at the heart of the global technology boom will prove a curious footnote in the demise of the global taxi industry. San Francisco’s taxi service was particularly bad. Hailing a cab on the street was more like a small-town experience, and calling for one was an erratic proposition at best. Adding insult to injury, Yellow Cab now offers a ride-hailing app of its own, pathetically named, and I am not making this up, YoTaxi.
What began in San Francisco has spread lightning quick around the world. Yet so many questions remain. Can Uber consistently make money? Is Uber the global winner, given the many competitors it faces, including a global anti-Uber alliance? Will regulators step in and alter the path of progress. (It wouldn’t be the first time.)
Are you in a business that could be disrupted by a fast-moving, (initially) lightly capitalized, risk-taking upstart? Without knowing what you do, the answer is far more certain than these others. The answer is yes.
BITS AND BYTES
Twitter’s leadership makeover continues. Late Sunday, CEO Jack Dorsey confirmed the departures of three senior vice presidents—Alex Roetter (engineering), Kevin Weil (product), and Katie Jacobs Stanton (media). Brian Schipper, vice president of human resources, is also leaving. Dorsey says the resignations are voluntary, but the company’s stock has lost more than 50% of its value in the past three months and he needs to restore confidence fast. According to several news reports, more personnel changes are in the works—expect two new directors for Twitter’s board and a chief marketing officer. (Wall Street Journal, New York Times, Re/code)
Apple watchers don’t expect any surprises. During its last quarterly financial briefing, Apple forecast revenue of $75.5 billion to $77.5 billion for its December quarter. Most analysts that watch the company closely expect it to deliver results at the middle of that range. Anything less would put even more pressure on its stock price, which has lost close to 30% of its value since last April. (Fortune)
Analysts: Alibaba’s growth is slowing. The Chinese e-commerce giant is expected to report its slowest quarter in more than three years when it discloses its latest financials later this week, with anticipated revenue growth of just 26.6%. That compares with the 47% to 51% projected by rival JD.com for the same three-month time frame that ended in December. (Reuters)
Toshiba shops part of its chip business. To address some of the losses caused by its $1.3 billion accounting scandal, the Japanese electronics conglomerate is soliciting bids for its large scale integration (LSI) technology and other microprocessors that are used in cars, home appliances and industrial equipment, reports Reuters. The units drove approximately $2.8 billion in revenue last year. Toshiba’s flash memory operation isn’t part of the discussion. (Reuters)
Chromebooks nibble at Windows portable market share. Lightweight notebook computers that use Google’s Chrome operating system represent only a tiny portion of annual personal computer sales. But they probably accounted for 3% of the 276 million PCs sold last year, according to estimates by research firm IDC. (Computerworld)
Did Google escape too lightly with its U.K. tax deal? If Google Inc. thought that its $185 million peace deal last week with the British government over back taxes was going to be the last word on the matter, it was gravely mistaken. Tax experts and politicians who have evaluated the arrangement over the weekend are not impressed. They still think that Google is getting away with paying a small fraction of the taxes due on profits it made in one of its biggest overseas markets. Here’s why. (Fortune)
IN CASE YOU MISSED IT
Why Chinese smartphone makers come to America by Scott Cendrowski
Buying Twitter: Some likely—and not so likely—candidates
by Mathew Ingram
SAP meets cloud sales expectations, and then some by Heather Clancy
Here’s what Apple will announce in March by Jason Cipriani
Why former Twitter exec April Underwood joined Slack by Heather Clancy
ONE MORE THING
Mark Zuckerberg visits the pediatrician. Social media swoons. How Facebook’s CEO is becoming the new “parent in chief.” (Fortune)