Two years ago, smartphone car-hailing startup Uber ran into the kind of bruising regulatory battle in Boston that it seems to start just about everywhere. Faced with a statewide shutdown for using an unapproved taxi meter, the company rallied fans and media boosters to its cause and won a swift reprieve from Gov. Deval Patrick.
This week, Uber CEO Travis Kalanick returned to Boston for a bit of a victory lap.
In the short time since that initial regulatory dustup in Boston, Uber has grown to become the poster child for innovative business models in the mobile computing era. The company now operates in 200 cities around the globe, and has raised buckets of cash from investors, including a $1.2 billion financing round this summer.
On Wednesday night, Kalanick was at the MassChallenge awards, a packed annual gathering of entrepreneurs, investors, and policy-makers to celebrate the state’s biggest startup incubation program.
He helped introduce Patrick, who was there to collect an award named after himself, and thanked the outgoing governor for “his leadership, his vision around innovation and technology, and creating that innovative spirit here in the state of Massachusetts.”
And in a separate speech to the crowd, Kalanick showed the kind of sky’s-the-limit ambition that has made his company the favorite of hit-hungry venture investors.
In Kalanick’s view, Uber is not just a convenient, super-slick turn on the old concept of a taxi or town car service. Instead, Uber is seen as a way to replace personal car ownership for city-dwellers, a kind of private transportation utility that could maybe, one day, be so ubiquitous that carpool Uber drivers are on perpetual trips, constantly dropping off one commuter and picking up the next.
That kind of service, Kalanick said, can make cities better by moving people around more efficiently and providing jobs for the drivers—he said there are already the equivalent of about 4,000 full-time drivers on the system today, and more than 500,000 active users in the Boston area.
“Different than sort of your traditional tech company, Uber is local,” he said. “It’s about the local economy and how that local economy grows very directly from what Uber does.”
If it keeps growing, even at a somewhat slower pace than before, Kalanick predicted that Uber could have something like 20,000 full-time drivers in the city in two more years. If its dreams are realized, Uber could take half a million underused personal cars off the road by offering a better transportation alternative, he said.
“We feel like we’re a big part of the city, and it’s important to our culture. We like to say we celebrate cities,” Kalanick said.
That’s the kind of huge vision you’d expect from someone in Kalanick’s position, of course. But pulling off that kind of transformation won’t be without more headaches.
Massachusetts is ground zero for another legal headache bedeviling Uber—the question of whether its all-important drivers should be considered employees, or independent contractors using a lead-generation system, as Uber regards them.
Lawsuits seeking to win employee classification for Uber drivers are winding their way through the state and federal courts. Boston-based employment lawyer Shannon Liss-Riordan is behind those cases, and she has a long track record of winning court battles for workers who have been shortchanged by their bosses.
Cab companies also sued Uber, upset that its take-no-prisoners entry into the market bypassed an old, tightly controlled system that limits both rider fares and the number of cabs allowed to operate in cities.
But even if it doesn’t reach the gargantuan heights that Kalanick projects in his slideshow, Uber definitely seems like it’s not going anywhere—especially with that much money in its bank account.
Hailo, a London-based taxi app that sought to rival Uber, recently left the North American market, citing an unwinnable price war with Uber and its chief competitor, the also well-financed Lyft.
Google Chairman Eric Schmidt, whose company has invested hundreds of millions of dollars in Uber and sent its top lawyer to sit on Uber’s board of directors, also used his MassChallenge speech to marvel at the company’s rise.
“Travis is probably one of the greatest entrepreneurs of this century,” Schmidt said. “What we’re doing at Uber [is] literally changing the world, changing our lives. One of the greatest business ideas of all time.”
