Harry here. As drivers, it’s easy to focus on the present state of Uber, but when you sit back and think about what the company has done in the past few years, it’s impressive. I’m a little biased since I have a brief cameo in this book (p. 166!), but it is a fascinating tale of what it took to get Uber to this point and just how many things had to go right. Today, senior RSG contributor John Ince gives us his thoughts on Adam Lashinsky’s latest novel, Wild Ride: Inside Uber’s Quest for World Domination.
Wild Ride could easily be mistaken for a page turning novel. It’s also an informative, relevant and timely book that deserves more attention than it’s been getting – hence this review. I wish the book was getting more attention, because the Uber story is extremely complex and most of the recent articles about Uber have been shoehorned into the same increasingly familiar narratives: Uber is the bad boy of tech. Travis Kalanick has to grow up. The story is more complex than that, and Lashinsky captures these complexities to expose a deeper side of the story.
An Improbable Story
Throughout the book, Lashinsky shows us Uber’s accomplishments are real and significant – even amazing. In doing so, he also lends detail to the more complex story behind Uber’s amazing ascent.
Reading Lashinsky’s account of Uber’s improbable early years, we start to appreciate the magnitude of Uber’s rise, now with over 2 million drivers on its platform, operations in over 700 cities and rapidly increasing revenues (and losses) – all in just 7 years time.
The Uber story transcends the world of technology, and it’s even bigger than the world of business. It touches on ethics, economics and ethos – and Lashinsky somehow captures the full scope of the drama without weighing down the narrative with psycho-babble about TK’s character flaws and the toxic corporate culture. Indeed somehow he and his editors managed to get news into the book that broke only a few weeks ago. Susan Fowler’s letter – it’s in there. The Greyballing fiasco – it’s in there. Unfortunately, the resignation of Uber’s now disgraced CEO, Travis Kalanick is not in the book, but we do get hints that it might be in the making.
Learn more about the behind the scenes making of Wild Ride: Inside Uber’s Quest for World Domination here on our podcast, where Harry interviews Adam Lashinsky on the book and his interactions with Travis.
Skirting the Dangers of Open Access
That Adam Lashinsky is one of tech’s most respected voices helped him in his efforts. As the Executive Editor of my former employer (Fortune Magazine), he gained access to Kalanick and his many bros.
I was concerned at the beginning, because one of the traps many journalists fall into when doing corporate biographies is that they become captive to their sources. I was pleasantly surprised to see Lashinsky didn’t fall into the trap. He used his time with Kalanick to get the straight story and didn’t start to gush over his subject.
That Travis Kalanick made himself available to Lashinsky is a clear sign that Kalanick viewed Lashinsky as someone who could help him out. Lashinsky’s long sections about Travis Kalanick are at times fascinating and well written, but with TK’s fall from grace, you get the feeling that Lashinsky ever so slightly missed the mark, perhaps by giving Kalanick’s account of events too much credence. But just as soon as you start to feel that, you stumble on a passage like this that hits the nail on the head, “By the beginning of 2015 Uber confronted more than a perception problem. Despite its size, it was still more of a scrappy startup than a sophisticated operation. Yet, as its charm was wearing thin, its pugnacious and seat of the pants ways bordered on reckless and irresponsible.”
An Inner Glimpse
One of the most fascinating parts of the book is the inner glimpse it gives into the pitch Uber used to reel in investors. Lashinsky discusses Uber’s concept know as cohort analysis – an approach to comparing operations and growth trajectories in multiple cities, during corresponding stages of their growth. He writes, “Uber also showed potential investors graphs of “churn” referring to the rate at which customers abandon a service. By demonstrating that usage picked up velocity around the world, whether its London, Sydney, LA, New York, Delhi, Beijing, said Uber’s Gupta, we see that everywhere.”
One wonders if any of the investors ever inquired about driver churn. If they did, they would have learned that drivers were abandoning the service faster than customers were embracing it, forcing Uber to drain its coffers by offering huge driver sign-on bonuses that have contributed so mightily to Uber’s astounding losses. Never mind that “cohort and churn analyses” could and did yield a flawed analysis.
What was revealing was the manner in which Uber spun its story out, managing to raise $17 billion from private markets, enabling the company to defer financial rigor for years without having to face the music from public investors in an IPO. The whole thing came from the flawed thinking that has only recently caught up with Kalanick and his team.
We learn that Kalanick leaned heavily on the now disgraced (and fired) Emil Michael to do the bulk of the deception and dealmaking. Michael, according to Lashinsky, also negotiated the China exit – a deal that one day may prove to be one of Uber’s most cunning moves because they got a $1 billion cash infusion as well as a sizable chunk of Didi’s equity. Michael credits Kalanick with a “profound” insight in fundraising, “focus[ing] on process rather than outcome.”
Of course, the real magic behind the method here was in the buzz Kalanick and Michael created in the press and with Silicon Valley elites about the service. The buzz was so dramatic for about a year, that Kalanick easily “created a perception of scarcity” of the equity so that investors were desperate to get in. One wonders if they’re now equally desperate to get out.
Yes, what Kalanick and crew accomplished in 8 short years is nothing short of amazing – creating the world’s biggest startup with a market cap approaching $70 billion, disrupting existing urban transit in cities all around the globe. Although Lashinsky gives some hint of trouble ahead in the final chapters, he’s clearly failed to capture the full importance of the PR implosion. Uber’s toxic culture is referenced, but not given the attention it deserves.
We should give editor and author credit for capturing Uber’s overarching ambition in the title: Wild Ride: Uber’s Quest for World Domination, but the book leaves it at that. There is little discussion of how a company that’s attempting to introduce flying cars, food delivery, motorcycles, water transit, etc. is ever going to make money on any of these wild ideas. These are major omissions but are understandable. After all, Lashinshy is a reporter – and a good one – but he’s not a seer. Still the signs were all there that Uber was being mismanaged.
What I found most lacking from the book, and this reflects my training in finance, and my experiences as a driver, are two things:
1. Lashinsky essentially gives Kalanick and team a pass on financials. Lashinsky seems remarkably unconcerned by the fact that Uber has been losing money at a clip of almost $3 billion a year – making it the least profitable startup in history.
This is a major oversight because Uber’s financial are really, really horrendous. I know, I know, Amazon’s financial were horrendous too, but there’s a big difference between the two companies and how they’re spending their investors capital. Amazon was building an infrastructure and a well-respected brand. Bezos was building state of the art shipping centers and cloud computing centers and manufacturing operations, in addition to building market share.
Uber, on the other hand, is seeing their money slip away on driver signup bonuses and passenger subsidies. Lashinsky just glosses over all this, maybe because Silicon Valley tends to do the same – valuing market share and growth over profitability in the early years of a startup’s growth.
2. The second major oversight of the book is there was only a passing mention of the big deception: calling drivers “partners” and classifying them as independent contractors. If Uber can be losing this kind of money, while getting away with this charade, imagine how much they’ll be losing if they have to start paying the piper. Yes, Uber has succeeded in delaying or diminishing the effects of those lawsuits. But that’s a shortsighted strategy, because as soon as they settle one case, another pops us.
Uber’s legal problems are especially evident overseas in Europe, South America, India and China before they pulled out. Uber now has over 200 lawyers working in house full time fighting legal battles on over 100 fronts.
In sum, Adam Lashinsky has written a riveting account of what is perhaps the biggest tech story out there today. The story has all the elements of a thriller: a protagonist CEO who defied all the naysayers and willed this modern day behemoth into existence. Lashinsky captures the drama and the improbability of it all.
As Lashinsky was putting the finishing touches on the manuscript, it was beginning to hit the fan for Uber. I wonder if Lashinsky had it to do over again, he would have delayed the publication date a bit, to get the full grip of the story. Then again, he’s an author, not a seer.
Readers, have you read Wild Ride yet and, if so, what did you think of it? Do you think you’ll read this book, and what questions would you have for Travis if you interviewed him?
-John @ RSG