The Exceptional Manager

This part of the Uber continuing case focuses on Chapter $1$ and provides an introduction to the challenges the organization is facing. This cumulative case$$s real$-$world application of management knowledge and skills is designed to help you develop your critical thinking ability and realize the practical power of sound managerial skills for solving problems in your job and career.

Read the cumulative case and respond to the questions that follow.

Getting Started

Legend has it that the idea for Uber arose when tech entrepreneur pals Garrett Camp and Travis Kalanick couldn$$t get a cab on a snowy Paris night in $2008.$A In reality, the two had been discussing the notion of smartphone$-$based technology to summon a town car $($luxury car or black car$)$ on demand with the touch of a button for some time. Both men were in their early $30$s but had plenty of experience with startups. Camp had recently sold the discovery and recommendation search engine he cofounded$$StumbleUpon$$for $$75$ million. Kalanick $($pronounced $$cal$-$a$-$nick$)$ had launched his first business, an SAT$-$prep tutoring service, when he was $18.$ His second venture, a file sharing and service business called Scour, had failed despite Kalanick$$s great effort and persistence, but in $2007$ he sold his streaming$-$video startup Red Swoosh for around $$19$ million. UberCab was born in March $2009$ when Camp$$along with former fellow graduate students from Calgary, Oscar Salazar and Conrad Whelan, with Kalanick serving as a $$mega adviser$$took the lead in experimenting with the new town car idea.B$,$C

The company first tested the mobile$-$app concept in New York, then officially launched in San Francisco in $2011$ as a service allowing users to push a button or send a text on their iPhone to request a black luxury car $($limo$),$ for only $1\mathrm{.}5$ times the price of a conventional taxi. UberCab was different from taxicab companies at the time because riders could request service via mobile app or website, track the location of the driver $($through GPS on their phone$),$ and know exactly when the car would arrive$$a concept that would come to be called a transportation network company. The startup was a big hit. In $2011$ UberCab changed its name to Uber, meaning $$super$($from the German word $$ber$,$ for $$above$)$ after city and state regulators insisted it didn$$t meet the licensing requirements of a town car or taxicab firm. It also underwent an identity change$$from a company offering luxury rides to a technology company that matched drivers and riders of all sorts.D

Ten years later Uber was still headquartered in San Francisco, had over $22,000$ nondriver employees and about $3\mathrm{.}9$ million active drivers globally, was operating in $63$ countries and over $700$ cities, and was reportedly worth about $$78$ billion$$an astonishing figure for a company that owns few visible assets.E It is miles ahead of second$-$place competitor Lyft$,$ valued at $$24$ billion and now in $644$ U$.$S$.$ cities.F Uber, called the most valuable tech company in the world by Business Insider magazine, has raised more capital and grown faster than any startup in history. But the company continues to lose prodigious sums of money and has suffered a damaged reputation after a slew of scandals and massive turnover in its executive ranks.G

Challenges for Uber

Uber has faced a steep learning curve during its breakneck rise. $$Challenges ranged from dealing with local city regulations and hiring reliable drivers,$$ says journalist Samantha Kelly, $$to developing a loyal rider base and scaling $[$increasing the work activity$]$ at an astronomical rate.$$H Uber$$s managers have had to meet$$and are still having to meet$$a great many other challenges.

In Chapter $1$ you learned of Seven Challenges to Being an Exceptional Manager. Many of Uber$$s difficulties that we will discuss throughout this case can be traced to these challenges. Here$$s a list of the seven challenges, along with a preview of the issues we will discuss in the coming chapters:

Challenge $1$: Managing for competitive advantage. Uber has historically had little trouble outperforming its competitors, but since $2017$ the company has lost substantial market share to Lyft$,$ its primary competitor. In fact, Uber$$s U$.$S$.$ market share has dropped from $74\%$ in September $2017$ to $67\%$ in March $2021.$I We will explore what Uber is doing to remain competitive, including how it is working to attract and retain top talent, innovate new technologies, and repair its reputation.